PROPARCO in the Mekong region

PROPARCO in the Mekong region Investing in a sustainable future

Š Christian Berger

CAMBODIA LAOS VIETNAM

SUPPORTING A DYNAMIC PRIVATE SECTOR IN THE MEKONG REGION PROPARCO covers the Mekong region from its regional office based in Bangkok, Thailand. This office also covers China, Indonesia, Mongolia, the Philippines and Thailand.

Since active in the area, PROPARCO has committed a total of US$ 550m.

Hanoi

The Mekong region has experienced rapid economic development and sustained growth over the past two decades. This evolution means extraordinary opportunities for the countries in the region, but also unprecedented economic, social and environmental challenges. Whether improving access to basic goods and services, distributing the dividends of growth or protecting the environment and mitigating climate change, the countries of the Mekong basin must incorporate local and global issues into their growth strategies.

Our approach PROPARCO is a development finance institution and acts as a catalyst for private investment. Its activities in the Mekong region are built on three main pillars : › Encouraging strong growth for sustainable jobs, › Promoting innovative and responsible business models, › Supporting the development and sophistication of financial markets.

Vientiane

Bangkok Phnom Penh

Key figures for the Mekong region

US$ 350 m

US$ 280 m

committed since 2002

in portfolio on 30/06/11

18 projects in portfolio on 30/06/11

Portfolio per sector in the Mekong region (as a % of total portfolio) on 30/06/11

5% 11%

36%

Corporate Investment funds

48% Financial sector Infrastructure

PROMOTING SUSTAINABLE GROWTH …

In the Mekong basin, PROPARCO focuses its efforts on the main drivers of sustainable and shared growth.

SUSTAINABLE INFRASTRUCTURES Laos Developing hydroelectric power PROPARCO co-financed the capacity increase of the Theun Hinboun hydroelectric power plant through a US$ 40 m loan.

This financing helped boost regional energy supply against a backdrop of rising demand.

CambodIA Reinforcing airport infrastructures PROPARCO helped finance the upgrading of three international airports at Phnom Penh, Siem Reap and Sihanoukville, amounting to a total of US$ 17 m.

This project opens up new prospects for tourism and regional integration.

financing the infrastructures essential for growth

helping businesses development

PROPARCO participates in the financing of major industrial and infrastructure projects in order to meet challenges posed by economic growth. Its investments in the transport, energy production and telecommunication sectors are opening up new growth prospects for the local economic fabric. PROPARCO works with local or international private groups through a variety of legal frameworks and financial structuring.

PROPARCO supports the growth of local, regional and international companies whose impact on development is significant and sustainable. It is involved in a broad range of industries, from agriculture to manufacturing and services.

This long-term support contributes to strengthening the local economic fabric and helps create jobs while improving the competitiveness of companies.

… AND DEVELOPMENT

Promoting access to the banking and financial sectors

supporting investment funds

To help them meet the long-term financing needs of companies and small and medium enterprises, PROPARCO is supporting major banks and their subsidiaries as well as microfinance institutions. It offers a wide range of financial tools and supports the dissemination of best international standards with respect to environmental, social and governance issues.

PROPARCO invests in generalist or industry specific investment funds.

Companies can thus access capital vital for their growth and support in terms of defining strategy, improving governance and accessing international professional networks. This type of intervention enables PROPARCO to leverage the impact of its investments.

BANKS AND FINANCIAL MARKETS CAMBODIA Developing microfinance PROPARCO financed three key microfinance players in Cambodia : AMRET with a € 1.6 m equity investment and a US$ 4 m loan, ACLEDA with a US$ 10 m loan and Hattha Kaksekar Limited (HKL) with a US$ 5 m loan. This support for the microfinance sector helps strengthen the local economic fabric.

Vietnam

© Christian Berger

Financing the growth of the banking sector PROPARCO senior and subordinated loans to private banks such as Sacombank (US$ 50 m) help strengthen the Vietnamese banking system.

OFFERING LONG-TERM FINANCING SOLUTIONS Complementary to the bank commercial offer, PROPARCO proposes a range of long-term financial instruments in accordance with the principle of subsidiarity. It offers its clients long-term support tailored to their specific needs.

Medium and long-term loans

Equity investments

Guarantees

PROPARCO offers a diversified range of loans : senior, junior, mezzanine and subordinated. These loans, in foreign or local currency, range from € 5m to 100m with maturities of 5 to 20 years.

PROPARCO proposes direct loans in local currency to reduce the foreign exchange risk exposure of its clients.

PROPARCO can invest in funds or directly enter the capital of companies. It is systematically a minority shareholder and tends to exit such investments within 5 to 8 years, once the companies have gained access to the financial markets.

PROPARCO’s signature provides its clients with a guarantee of solvency that can take several forms: › guarantees for bond issues, › guarantees for inter-bank loans, › guarantees for local currency loans.

“ Since our creation, we have been driven by the conviction that it is possible to reconcile economic growth, environmental balance and social progress.

This is why we strive to promote the principles of responsible financing in all of our actions.”

Étienne Viard, © Haikeu

CEO of PROPARCO

Key figures As at 31/12/2010

11 regional

300

70

¤ 950 m

¤ 2.1 bn

offices

clients

projects

committed in 2010

in portfolio

PROPARCO is a development finance institution whose role is to promote private investment in emerging and developing countries.

PROPARCO, development finance institution, was incorporated in 1977 with the idea of leveraging private sector role in development. The mission of PROPARCO, subsidiary of the Agence Française de Développement (AFD) dedicated to the private sector, is to encourage investment in the emerging or developing countries in favor of growth, sustainable development and the achievement of the Millennium Development Goals. Through the principle of subsidiarity, it invests in regions, sectors or entrepreneurial projects that are felt to be too risky by the commercial banks.

PROPARCO is present on four continents, from major emerging countries to leastdeveloped countries. It provides sustained support for its clients, proposing a full range of long-term financial instruments tailored to the specific needs of the private sector in these regions. It applies high level requirements in terms of environmental and social responsibility, and encourages the development of sustainable businesses, banks and infrastructures as well as mitigation of global warming.

Bangkok Office Exchange Tower 35th floor, Unit 3501-02 388 Sukhumvit Road, Klongtoey Bangkok 10 110, Thailand Tel. : + 66 (0)2 663 60 90 Fax : + 66 (0)2 663 60 77

http://asia.proparco.fr

Head office 151 rue Saint-Honoré 75001 Paris France Tel. : + 33 (0)1 53 44 31 08 Fax : + 33 (0)1 53 44 38 38

© Vyacheslav Argenberg

http://www.proparco.fr

Printed on recycled paper.