InterAmerican Development Bank Private Sector Department Water and Sanitation February 2003

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Inter-American Development BankPrivate
Sector Department Water and Sanitation
February 2003
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Private Sector Department (PRI)

• Primary role is to finance private investments in
  infrastructure and capital market development in
  the region
• Eligible infrastructure sectors
• water / sanitation
• transportation (roads, railroads, pipelines,
  ports, airports)
• energy (power generation, transmission,
  distribution)
• telecommunications

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Financial Instruments Loans

• A-Loans (IDBs account)
• up to US75 million or 25 of total project costs
  
• up to 20 years (typically in 10-15 year range)
• market based pricing
• B-Loans (market participation)
• maximize leverage of A-Loan to meet total debt
  financing requirements through cofinancing with
  banks and institutional investors

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Financial Instruments Guarantees

• Financial Guarantees
• all-risk guarantees
• limited to 25 of total project cost or US75
  million
• Political Risk Guarantees
• convertibility transfer as stand-alone product
• streamlined approval process
• selected non-commercial risks
• breach of contract
• limited to 50 of project cost or US150 million

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Financial Instruments Private Placement

• B Loan targeted at US insurance companies
• IDB B loans of US433 million placed by 2001
• 15 top tier US insurance and finance companies
  participated by 2001
• IDB placed approximately 50 of total emerging
  markets private placements in 1999
• Rating agency will rate the operation to obtain
  investment grade
• increases the marketability of the placement
• increases the depth of the market and improves
  both the terms and the pricing

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PRI Water and Sanitation Experience

• Total IDB loan Project cost
• Aguas Provinciales de Santa Fe, Argentina US85
  million US219 million
• (A/B syndicated bank loan)
• Río Bogotá, Colombia US31.3 million US138
  million
• (private placement with IDB political risk
  guarantee)
• Tibitoc Water Treatment System, Colombia US18
  million US64 million
• (A/B syndicated bank loan)
• Aguas del Illimani, Bolivia (A loan) US15
  million US68 million
• Aguas Argentinas, Arg. (A/B private placement)
  US300 million US864 million
• San Pedro Sula, Honduras US13.7 million US43
  million

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Project Analysis
International Financing
Legal Regulatory Framework
PROJECT COMPANY
Supply
Demand
Insurance
Operations
Constructions