Transcript The Investment Fund for Central and Eastern Europe

Danish International Investment Funds
The Investment Fund for Central and Eastern Europe
Piotr Lemieszek and Zbigniew Gluchowski
Warsaw Advisory Office
Bremerholm 4
1069 Copenhagen K
Phone: +45 33 63 75 00
Fax:
+45 33 32 25 24
E-mail: [email protected]
Website: www.ioe.dk
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
The Investment Fund for Central and Eastern Europe – IØ
Basic Facts
•
•
•
•
•
•
•
•
Created by Act of Danish Parliament in 1989
National tie
Various sectors
Equity: EUR 230 million
400 projects in 18 countries
151 active projects
EUR 640 million invested since 1990
Countries of operation:
•
•
•
IØ: Russia, Ukraine and Belarus
IFU: other CIS
Phasing out 2009-2012
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
Principles of investment
•
•
•
•
A Danish company shall participate with a larger exposure than IØ’s
Investments: up to EUR 7 million in one project
IØ’s investment cannot exceed 30% (50%) of the total investment
Share capital and/or loan
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
Equity Investments
•
•
Share capital
IØ’s exit
- sale to partner (willing buyer – willing seller or put-call options)
- public listing / stock exchange
- sale to third parties (seldom!)
•
•
Subordinated loans
Equity loans
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
Loans and Guarantees
•
Project loans
- hard currency: DKK, EUR
- commercial terms: 6-months floating rate (CIBOR, LIBOR)
+ a risk premium (2% - 6% for Ukraine)
- up to 5 years
- non-recourse, local collateral
•
Guarantees
- commercial terms
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
400 Projects Distributed by Host Countries 1990-2005
160
148
Accession Countries: 325 projects
Non-accession Countries: 75 projects
140
120
100
80
60
32
40
20
4
3
3
8
31
15
1
4
15
2
1
40
30
22
21
17
1
2
0
.
us vina aria ope atia ep nia gia ary tan tvia nia and nia tion gro kia nia ine
r
r
la go
lg Eur ro h R sto eo ung khs La hua Pol ma era ene lova love kra
e
u
u
r
t
o
B rz
C ec
E
t
U
G
H
B al
S
S
za
Li
R
ed on
Co
z
a
r
e
F
t
C
K
ilt c
H
M
n
en
&
&
ia
C
s
Ba
a
a
i
us rbi
sn
R
o
Se
B
rie
nt
s
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
IØ’s presence in Ukraine
•
•
Preparations to establish Kyiv Adviser Office in the 2nd half of 2006
Advisers:
•
•
•
•
Kyiv
Lviv
Portfolio of 21 projects (18 active), mostly in Western Ukraine
Total investments contracted EUR 15 million
Growing pipeline of projects
Network of Danish companies in Ukraine
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
21 projects in Ukraine
•
•
•
Rapid growth of portfolio in the last two years
9 new projects in 2005
Total investments contracted in 2005 – EUR 4.6m
25
20
Total accumulated number of projects
15
10
5
0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
21 Projects Distributed by Sector
Wood
processing/furniture
3
3
Agriculture
1
Metal processing
6
5
3
Approx. 20 agri-projects in CEE/CIS incl. 13 in pig
production, incl. 3 existing in Ukraine plus approx. 4 in
the pipeline
Textile
Real estate
Distribution
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
IØ’s typical agricultural project – key figures
Pig production
3,000 sows
72,000 slaughter pigs p.a. = 5,800 tons of pork p.a.
(250-300 such farms would provide the total demand of Ukraine for pork)
Turnover: EUR 12 million p.a.
56,000 cubic meters of slurry p.a.
2,400 ha necessary to comply with EU environmental regulations
farm buildings ca. 60,000 m2
Investment budget ca.
EUR 10 million
Financing:
Equity: EUR 4 million
Loans: EUR 6 million
Danish partner:
IØ:
Danish partner/banks/IFI :
IØ:
EUR 3 million
EUR 1 million
EUR 4 million
EUR 2 million
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
IØ’s typical agricultural project – other issues
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Danish project owner and management
local staff, skills and training
local co-investors, landowners
lease or ownership of land, alternatively slurry contracts
• duration vs. maturity of financing
• structure of ownership, registered titles, concentration
lease or ownership of buildings, collateral
local climate conditions and soil characteristics
CSR, environmental and animal welfare requirements
permits, bureaucracy, inspections
regulatory framework: import tariffs and quotas
VAT on capital investments
import of live animals and inputs
value chain and vertical integration
availability of local bank financing
potential for rape seed and bio-fuels production
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
Thank you for your attention
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
Legal Mandate
The objective of Denmark's support to Danish investments in Central and Eastern
European countries is to assist the reformist forces in these countries in achieving
increased economic growth and development of trade and industry as well as to
foster closer economic co-operation between Denmark and Central and Eastern
Europe for the benefit of the East-West relationship in general as well as Danish
business and employment.
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
Purpose of Operation:
Mission, Vision and Strategy
•
•
•
MISSION: To enhance global economic growth, development and more
equitable income distribution through increased global flow of socially and
environmentally responsible, productive investments making optimal use of
comparative advantages
VISION: To contribute through information and advice in connection with coinvestments to enhance Danish enterprises’ active participation in the global
flow of productive investments towards developing and reform countries.
STRATEGY: To become known, recognised and used by all relevant Danish
enterprises as a competent provider of know-how, experience and external
financing as well as their most preferred investment partner in developing and
reform countries.
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ
Danish International Investment Funds
A group of international investment funds in Denmark
(of which MIØ)
FUND
Established
Geographical Areas
Number of joint ventures
established at 31 Dec. 2005
Number of countries hosting
joint ventures
Number of joint ventures
in portfolio at 31 Dec. 2005
Number of new joint venture s
per year
Financial instruments
Minimum investment
Maximum investment
1967
Developing Countries
GNP < USD 2,604 p.a.
1989
(1995)
Russia, Ukraine
and Belarus
1996
Emerging Markets
(Asia, Middle East, Latin
America)
547
400
(47)
7
72
18
(9)
5
200
151
(20)
7
25-30
15-20
-
-
Share Capital / Loans /
Guarantees
± USD 8.0 million
Share Capital / Loans /
Guarantees
± USD 8.0 million
Funds equity at 31 Dec. 2005 Approx. USD 250 million Approx. USD 230 million
The Industrialisation Fund for Developing Countries
-
The Investment Fund for Central and Eastern Europe
The Investment Fund for Emerging Markets (IFV has stopped making investments in 2004
DANISH INTERNATIONAL INVESTMENT FUNDS IFU AND IØ