Martin Brunkhorst_Director of the European Investment Bank (EIB)

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Transcript Martin Brunkhorst_Director of the European Investment Bank (EIB)

EUROPEAN INVESTMENT BANK
Financing Broadband Infrastructure
IRE-Fachkonferenz
27.05.2014
European Investment Bank Group
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The European Investment Bank (EIB) at glance
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Created by the Treaty of Rome in 1958
Long-term lending bank owned by the 28 EU-Member States
Further EU policy objectives while operating on « not-for-profit » basis
AAA-Rating, voluntary application of Basel Regulation
Anti-cyclical loan allocation in crisis times
2013 Key figures:
 signatures:
Eur 71.7 bn
 Of which Partner Countries
 Ressources:
 Subscribed Capital
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Eur 7.7 bn
Eur 72 bn
Eur 242.4 bn
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Signatures, Disbursement & Capital
Signatures & Disbursements
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Capital
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2007-2013 EIB ICT lending by project type
EIB Loan approvals in ICT sector
(2007-2013)
 Between 2007 and 2013 EIB has approved a
total of 94 projects amounting to EUR 20 bn
 In respect to project types, EUR 12.7 bn to
broadband infrastructure projects,
EUR 6 bn to ICT RDI and the remainder to
satellites and ICT manufacturing
2007-2013 EIB ICT lending by sub-sector
 In respect to subsectors, EUR 14 bn to
telecommunications operators, EUR 2 bn
to equipment manufacturers, EUR 2 bn to
semiconductor companies, and the
remainder to software and satellite
companies.
 In 2013 EIB approved a total of 17 projects
in the ICT sector with lending volume of
EUR 2.8 bn
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Investment needs / Financing demand
Estimated total investments EUR 220-280 bn until 2020*
on c. 50% of the total market cap for the sector!
White & Certain Grey Areas
“New risk-sharing instruments” or modified
existing ones may be needed
Grey + White
EUR130-200bn
Certain Grey Areas
Black areas
EUR 80-90bn**
Black Areas
* Band based on various studies and assumptions
** Black areas estimates based on industry forecasts
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Range of options for infrastructure and service competition
Passive
Incumbent
Telecom
operators
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Vertical
Infrastructure
Provider
Public Private
owned/operated
Subsidies
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Retail
Service
Provider
Full
Separation
Retail
Service
Provider
Retail
Service
Provider
Active
Sharing
Retail
Service
Provider
Vertical Service
Provider
Passive
Sharing
Vertical Service
Provider
Active
Vertically Integrated Operator
Service
Vertically Integrated Operator
Vertically
Integrated
Network
Operator
Infrastructure
Owner
Models applied in some of
existing or ongoing FTTH
rollouts.
Also acceptable under state aid
considerations.
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Lessons learned from Public-Private-Cooperations
 Select suitable and flexible public / private - operating / business
model
 Make sure financing matches the life time of the assets
 Allow for healthy competition in the procurement phase
 The setting of wholesale/rental rates and profitability benchmarks is
crucial for a healthy private business without long-term public
budgetary burden
 The rates need to be set to competitive retail service pricing and no long term
budgetary burden for the public during the operational phase
Wholesale
rates
 Benchmarks for profitability need to be better tailored to compare likes with likes
 Robust and future proven network design to meet technology
neutrality and broadband policy targets
Rental rates
 Do not forget to leave out the options that new copper enhancement
technologies can offer
 The white spot coverage should use a combination of fixed and mobile / 4G
technologies
 Reuse of existing infrastructure by third parties is difficult from commercial but
also technical point of view
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Determinants of bankability
 Macroeconomic, legal and regulatory context
 Promoter’s budget and affordability, sector
regulation, service contract structure
 Technical and environmental viability
 Sector standards and EU requirements, study
of alternatives, unit costs, environmental
procedures, procurement
 Economical and financial viability
 Market demand, competitivness, cost of
investment and operating expenses, return
on investment
 Project implementation and management
capacity
 Capacity to plan, procure, operate
(promoter and borrower)
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Bank risks
 Procurement and completion risk
 Demand and market risk
 Environmental risk
 Credit risk
 Contract fulfilment risk (service
provider and/or user)
 Change of service providers risk
 Reputational risk
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Further Information
European Investment Bank
www.eib.org
Martin Brunkhorst
Head of Vienna Office
Tel: +43 1 505 36 76 11
[email protected]
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