SMBC in Infrastructure Finance

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SMBC in Infrastructure Finance

Overview of PT Indonesia Infrastructure Finance

Investment

Banking

22

nd

_{May 2014}

Rajeev Kannan

General Manager, Project & Export Finance Department

Sumitomo Mitsui Banking Corporation

Member of Board of Commissioners of

PT Indonesia Infrastructure Finance

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Awards : Global Bank of the Year 2012

SMBC is awarded as

“Global Bank of the Year 2012”

by PFI Magazine for 2012.

This is the 2nd time that SMBC won this award following “Global Bank of the Year 2008”.

Global Bank of the Year

Sumitomo Mitsui Banking Corporation

“Sumitomo Mitsui Banking Corporation (SMBC) has

picked up this

year’s Project Finance International

Global Bank of the Year award for its wide range of

lead-arranging and advisory mandates across all

jurisdictions and asset classes. The bank booked a

healthy spread of assets and took part in a range of

innovative new deals, and advised on a decent range,

too.”

(Source: PFI Yearbook 2013 Global Awards)

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Awards : Deal of the Year 2013

SMBC plays key roles on “Deal of the Year” projects awarded by the Infrastructure Journal.

Minera Antucoya

Alder Hey Children’s

Health Park

Deal of the Year - Mining

Deal of the Year – Overall &

Social Infrastructure

Winner

London Array Offshore

Wind Farm OFTO

Deal of the Year -Renewable

Winner

Chaglla Hydroelectric

Power Project

Deal of the Year - Power

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SMBC Project Finance Credentials – League Table 2013

Mandated Arrangers US$ (m) %

1 State Bank of India 10,090.1 15.9

2 Korea Development Bank 5,355.7 8.4

3 Mitsubishi UFJ Financial Group 3,196.5 5.0

4 Mizuho Financial 2,815.5 4.4

5 Westpac 2,787.9 4.4

6 NAB 2,739.4 4.3

7 CBA 2,696.1 4.2

8 Axis Bank 2,426.5 3.8

9 Sumitomo Mitsui Finl Grp Inc 2,222.3 3.5

10 ANZ 2,221.1 3.5

2 State Bank of India 10,090.1 5.0

3 China Development Bank 8,312.0 4.1

5 Mizuho Financial Group 7,443.8 3.7

6 Korea Development Bank 5,659.1 2.8

7 Credit Agricole 5,105.6 2.5

8 Barclays 4,211.0 2.1

9 HSBC 4,192.2 2.1

10 ING 3,997.4 2.0

Global Mandated Lead Arranger

2 Barclays 2,924.5 5.7

3 Deutsche Bank 2,061.2 4.0

4 Goldman Sachs & Co 2,003.8 3.9

6 Mizuho Financial 1,966.3 3.8

7 Credit Suisse 1,936.4 3.8

8 Bank of America Merrill Lynch 1,832.6 3.6

9 Credit Agricole 1,765.5 3.4

10 RBC Capital Markets 1,747.0 3.4

Americas Mandated Lead Arranger

EMEA Mandated Lead Arranger

Asia Pacific Mandated Lead Arranger

(Source): Thomson Reuters

1 China Development Bank 7,700.0 8.7

4 Mizuho Financial 2,662.0 3.0 5 UniCredit 2,415.5 2.7 6 Credit Agricole 2,308.7 2.6 7 BNP Paribas 2,284.6 2.6 8 HSBC 2,246.4 2.5 9 Standard Chartered 2,095.6 2.4 10 Societe Generale 1,992.4 2.2

SMBC was ranked 4th as Global, 5th as Americas, 2nd as EMEA and 9th as Asia Pacific Mandated Arranger.

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Global Coverage

(Project Finance)

Marketing ： 46 officers Credit ： 24 officers

(ECA & Advisory)

Marketing ： 12 officers London Marketing ： 7 officers Paris Marketing ： 3 officers Amsterdam Marketing ： 1 officer Dusseldorf Marketing ： 3 officers Milan

Total

316 officers

(as of April 2014)

(Project Finance) Marketing ： 16 officers Credit ： 15 officers (ECA) Marketing ： 11 officers Tokyo Marketing ： 9 officers Seoul Marketing ： 3 officers Credit ： 3 officers Hong Kong Marketing ： 32 officers Credit (ind. Agency)： 15 officers

Singapore

Marketing ： 2 officers

Jakarta Marketing ： 12 officers

Credit ： 7 officers Sydney Marketing ： 1 officer Hanoi Marketing ： 1 officer Bangkok SMBC Capital India Marketing ：1 officers New Delhi Staff ： 2 officers Doha (Project Finance)

Marketing / Credit ： 54 officers

(ECA) ：Marketing: 9 officers

New York Marketing ： 5 officers Mexico City Marketing ： 5 officers Bogotá Marketing ： 7 officers São Paulo Lima Marketing ： 2 officer Santiago Marketing ： 3 officers Marketing ： 5 officers Toronto

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SMBC’s Strategic Initiatives in Asia

• Significant funding needs for infrastructure

• SMBC investment in IIF as private sector investor • In partnership with MoF

subsidiary and multilaterals. • SMBC commitment is US$

30 million for 14.9% equity interest

Indonesia

• Significant funding needs for overseas infrastructure

investments by Singapore based corporates

• Temasek has set up a project finance company with SMBC, DBS and SCB

• Long-term guarantee from the Singapore Government

• SMBC investment in Clifford Capital as the only bank selected where Temasek is not a

shareholder

Singapore

• ~US$1.4 trillion required for infrastructure by Year 2017 • SMBC has set up an

infrastructure fund together with partners, Kotak Bank and Brookfield AM

• US$250 million fund size • SMBC commitment is US$ 30

million and has GP economics

• Targets power and infrastructure projects

India

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Confidential

Increased Government focus on the infrastructure sector

Government increases infrastructure spending allocation.. …in order to maximize economic growth

Source: Ministry of Finance, RAPBN Source: Central Bureau of Statistics & RAPBN, Bank Indonesia

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IIF Profile

PT Indonesia Infrastructure Finance (IIF) is a private non-bank financial institution under the Ministry of Finance of the

Republic of Indonesia, Regulation (PMK) No. 100/2009, professionally managed, with a focus on investing in

commercially feasible infrastructure projects.

Target Sectors Transportation infrastructure Waste / waste-water infrastructure Road infrastructure Telecommunication and information infrastructure Irrigation infrastructure Electricity infrastructure Drinking water infrastructure

Oil and gas

infrastructure

IIF’s Vision & Mission

To provide capital for infrastructure in Indonesia

and to work closely with Infrastructure sponsors,

the financial sector, and the Government of

Indonesia to accelerate the construction of

well-conceived, commercially viable infrastructure

projects.

 To ensure

investors’ needs are reflected in

contractual structures and concessions

 To lead in offering a mix of long term

financing

instruments

appropriate

for

infrastructure.

 To work with Indonesia’s financial institutions

and other institutional investors to channel

the

nation’s saving into the long term

development of Indonesia’s Infrastructure

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Confidential

Strong, established sponsors / shareholders

 IIF is owned by SMI (100% ROI owned), IFC, ADB, DEG and SMBC.

 ADB, IFC and DEG are all global multilateral institutions dedicated to promote development in developing countries and have debt rated Aaa/AAA/AAA by Moody’s/S&P/Fitch. ADB and IFC in particular are backed by multiple sovereign states.

 SMBC is a strong Japanese bank and is rated Aa3/A+/A- by Moody’s/S&P/Fitch.

 Finally, through SMI, IIF is backed by the Government of the Republic of Indonesia, which has shown a commitment to promoting infrastructure development in the country

33.88%

19.99%

11.24%

14.90%

100.0%

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 Social & Environmental (S&E) Principles  International Performance Standards

To act as a catalyst in financing public and private

initiatives for commercially viable infrastructure projects

 Long term financing  Project finance capability  Leading expertise in infrastructure financing  Leading expertise in PPP transaction and project financing  Financial advisory capability Advisory Business Investment Business

Expected Result

Business Model

An increase in the infrastructure investment and development

 Increase the private sector’s participation in equity and debt investment in infrastructure  Create a domino effect:

o Improve long-term debt market driven by the increasing infrastructure investment o Grow the financial institutions and

financial markets  Facilitate PPP’s growth

 Raise the awareness and the capacity of companies to implement S&E Principles

IIF is expected to spearhead and to become a leader in the development of infrastructure financing.

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