IFC & Agribusiness. Creating Opportunity Where It s Needed Most

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1 IFC & Agribusiness Creating Opportunity Where It s Needed Most April,2011

2 Who We Are, What We Do IFC, a member of the World Bank Group, is the only global multilateral institution focused exclusively on the private sector the global leader in private sector development finance IFC s Purpose is to create opportunity for people to escape poverty and improve their lives We are well positioned to help clients manage economic crisis and downturn 2

3 IFC over $100 billion Invested in Emerging Markets since 1956 Largest multilateral source of loan/equity financing for the emerging markets private sector Founded in 1956 with 182 member countries AAA rated by S&P and Moody s Equity, quasi-equity, loans, risk management and local currency products Takes market risk with no sovereign guarantees Promoter of environmental, social, and corporate governance standards IFC FY10 Highlights Portfolio* $48.8 billion Committed * $18.0 billion Mobilized $ 5.3 billion # of companies 1776 # of countries (portfolio) 129 # of countries (committed) 104 * Includes for IFC s own account and mobilization Composition of FY10 Transaction Volume Resources and know-how of a global development bank + flexibility of a merchant bank Holds equity in over 800 companies worldwide 3

4 IFC Investment in the Agribusiness Value Chain Exceeded US$2.0 Billion in FY 2010 IFC s Goal: Deliver development impact along the global agri-supply chain, through investments and advisory services with the private sector, to create opportunities and improve peoples lives Fertilizers and other Chemicals Land Project/Corporate Finance CIT Access to Markets Farm Inputs Collection Processing Marketing Distribution Production Retail Infrastructure/Logistics Financial Institutions Pre-Harvest Finance Market Infrastructure Trade Finance Risk Sharing Facilities 4

5 IFC Agribusiness Portfolio Overview Agri-related Investments (including Syndications) The active portfolio of agri-related IFC has significantly increased its agri-financing in recent years investments was $3.9 billion at FYE09 (excludes Trade Finance) 5

6 Project Examples in the Agribusiness Value Chain Direct Finance Inputs Farm Production Sourcing Processing Marketing Distribution Retail Infrastructure/ Logistics Indirect Finance Pre Harvest Finance CJSC Rise (Ukraine) Salala Rubber (Liberia) Conaprole (Uruguay) Wadi (Egypt) Wings Noodles (Indonesia) Snowman (India) ADA-Ticaret (Azerbaijan) Jain Irrigation (India) Ecom (SE Asia, Africa, Central America) US$10 million loan to support a leader in farmer services and inputs (fertilizer, seeds, equipment, etc) in Ukraine. $10 million loan to rehabilitate plantation dilapidated during the civil war. In addition to productivity gains by new plantings and renovation of processing plant, rehabilitate social infrastructure (housing, schools, clinics). US$108 million and US$62.5 million expansions of dairy product facilities to efficiently utilize global competitive advantages of Uruguay s largest dairy cooperative, and one of its largest employers. US$65 million in loans to support a poultry producer to expand its feed milling and pelleting capacity, diversify through olive and grape farms, and expand its glass, containers and packaging operations. Over US$70 million in loans to support growth in the production, manufacturing, and distribution of instant noodles, which support an informal kiosk sector and provide low-cost foods to the public. $5 million in equity (option for up to $20 million) to support Snowman to more than triple its storage and refrigerated truck capacity over 3 years. US$18 million investment in state-of-the-art grocery retail chain enabling direct purchases from suppliers and wholesalers, efficient handling, storage and distribution. US$75 million loan & equity package to provider of micro irrigation systems to increase efficient water delivery and reach over 2,000 farmers. Corporate loan facility to a leading supply chain manager of coffee, to be on lent by local subsidiaries to farmers for capital expenditures and crop financing 6

7 Agribusiness an IFC Strategic Priority World Bank Group Goal: US$ 6 billion in Agri-sector commitments. $2.7 Billion Committed Portfolio As Of June 30, 2010 (includes Syndications) By Sector By Region 7

8 Long-term Competitive Financing IFC Value Add in Agribusiness Regional Knowledge Global Sector Expertise Country Risk Mitigation Environmental & Social Risk Management Sustainability Toolkit Equity Fixed/Floating Rates, Local Currencies Up to 15 year Loan Maturity Flexible Amortization Profile Catalyst for other Investors and Lenders Equity Participation Capital Mobilization Extensive Local Office Network Local Transaction Experience Strong bank partnerships through client networks and B loan participants World Bank Synergies Joint Venture partnership management 40+ Years of Sector Expertise Industry Specialist Advice and Benchmarks Greenfield Expansion/ Modernization Corporate Strategy Access to International Investors Government Relations Neutral broker Role Reduced Risk of Expropriation, Breach of Contract, Convertibility World Bank Synergies Withholding Tax Benefit Advice on Environmental and Social Best Practices Energy and Water Use Management / Cleaner Technologies Equator Principles Modeled after IFC Standards Local Consultation and Disclosure Local Supplier Development Environmental/ Social Advice Corporate Governance Local Economic Development HIV/AIDS Prevention Community Development Funding 8

9 Examples of IFC Agribusiness investments in SEE Frikom, Serbia (2009/2011) EUR 40 million (our of which EUR15 million parallel loan) expansion of production capacity in frozen fruits & vegetables, ice-cream and mineral water, investments in storage and retail space, the establishment of fresh fruit and vegetable purchasing, and efficiency improvements. Soc Gen, Serbia (2010) EUR 40 million credit line for on-lending to agribusiness in Serbia. Advance TerraFund, Bulgaria (2008) EUR15mn. Equity to support the expansion of ATERA, a company investing in agricultural land in Bulgaria, promoting land consolidation. PIK Vrbovec & Belje, Croatia (2006/2007) a total of EUR80mn. for postprivatization restructuring of primary agri production and meat processing. 9

10 Thank you! Magdalena Soljakova Investment Officer 10