BNP Paribas - GCC Countries - How Local & Foreign Companies Could Benefit from the New Kuwait Development Plan 2010-2014?

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BNP Paribas - GCC Countries

                         How Local & Foreign Companies Could Benefit from
                              the New Kuwait Development Plan 2010-2014?

•“The new financing approaches with the privatizations”, presentation by
  Christophe Mariot, Regional Head for Structured Finance - GCC Countries

•“Financing needs of contracting companies”, presentation by
  George Ghantous, DGM & Head of Corporate BNP Paribas - Kuwait

                                                                            June 8, 2011
Contents

1.   BNP Paribas Group

2.   Project Finance

3.   Financing needs of contracting companies

4.   Overview of the financing market

5.   PPP scheme

6.   Upcoming opportunities in the GCC

7.   Selected BNP Paribas references

                                                June 8, 2011   2
1. BNP Paribas Group

                       June 8, 2011   3
BNP Paribas Group - A Leading International Bank

BNP Paribas Group at a glance                                                   Global awards underlining our strong fundamentals
■ Offices in 84 countries and more than 200,000 employees                       ■ BNPP has received various awards in 2009 and 2010 evidencing:
■ Combined forces through the merger with BNPP Fortis                               ƒ A robust business model,
    ƒ Joined forces for stronger position: increasing                               ƒ Strong and diversified earnings streams from all its business
      attractiveness and growing market share across                                  lines,
      businesses                                                                    ƒ Client franchises,
    ƒ Strong financial results: 2010 Group revenues of EUR                          ƒ Stringent risk policy culture and good cost control.
      44 bn                                                                     ■ Most Impressive Arranger of EMEA Loans, Euroweek, 2011
    ƒ Enhanced earning generation capacity: EUR 7.8 bn net
                                                                                ■ Ranked 5th most valuable investment banking brand, Brand
      income 2010
                                                                                  Finance, 2011
    ƒ Sound balance sheet and comfortable solvency: top-tier
      balance sheet on a global basis                                           ■ Ranked 8th among the world safest banks, Global Finance,
                                                                                  2009 and 2008
■ BNP Paribas Group’s leadership in financing the real
  economy, in particular in sectors such as energy,                             ■ “Global Bank of the Year 2008“, “Best Bank in Western
  commodities, infrastructure and asset financing                                 Europe” and “Best Bank in France”, Banker magazine

                                                                                One of the world’s strongest credit ratings
One of the world’s strongest credit ratings (S&P Feb.2011)                      5-year senior CDS Spread (in bps as at 02.22.2011)
                                                                                        256
     AAA       Rabobank (negative)                                                              244

                                                                                                            215
                                                                                                                   199
               HSBC Bank Plc (Stable)         BNP Paribas (negative)
      AA       Banco Santander (negative)     Wells Fargo N.A. (negative)                                                       176
                                                                                                                                         164
               BBVA (negative)
                                                                                                                                                    140
                                                                                                                                                                      136    132       132
                                                                                                                                                                                                         126        124
               Barclays Bank Plc (negative)   JPMorgan Chase Bank (negative)
      AA-      Crédit Agricole (negative)
                                                                                                                                                                                                                               107              102             99            92              91
                                                                                                                                                                                                                                                                                                    86
                                                                                                                                                                                                                                                                                                                  78
                                                                                                                                                                                                                                                                                                                         72     67
               Crédit Suisse (stable)         Société Générale (stable)
               Deutsche Bank (stable)         UBS (stable)
      A+       Intesa Sanpaolo (stable)       Bank of America N.A. (negative)
               RBS Plc (stable)               Citibank N.A. (negative)                                             UNICREDITO

                                                                                                                                                                                                                                                                                                    WELLS FARGO

                                                                                                                                                                                                                                                                                                                         RABO
                                                                                                            RBoS

                                                                                                                                          NATIXIS

                                                                                                                                                     MORGAN STANLEY

                                                                                                                                                                                       CREDIT AGRICOLE

                                                                                                                                                                                                                    BARCLAYS

                                                                                                                                                                                                                                GOLDMAN SACHS

                                                                                                                                                                                                                                                                BNP PARIBAS

                                                                                                                                                                                                                                                                              CREDIT SUISSE

                                                                                                                                                                                                                                                                                              UBS

                                                                                                                                                                                                                                                                                                                                JPM
                                                                                         BBVA

                                                                                                SANTANDER

                                                                                                                                INTESA

                                                                                                                                                                      BOFA

                                                                                                                                                                              SOCGEN

                                                                                                                                                                                                         CITIBANK

                                                                                                                                                                                                                                                DEUTSCHE BANK

                                                                                                                                                                                                                                                                                                                  HSBC
Source: Bloomberg                                                               Source: Bloomberg

                                                                                                                                                                                                                                                                                              June 8, 2011                            4
BNP Paribas Group presence in the GCC

A leading lender in the GCC                                         BNP’s network in the Gulf

       ■    In the GCC, BNP Paribas has accompanied the
            economic growth of expanding economies for
                                                                                                       Abu Dhabi (UAE)
            more than 3 decades:
                                                                                                                              Representative office
              ƒ   In Bahrain, where our local full commercial
                                                                         Kuwait                           Dubai (UAE)
                  Branch has been catering to the needs of
                  major corporates for more than 30 years                Bahrain                                             Offshore Business Unit

              ƒ   In the UAE, where main branches actively
                                                                         Kingdom of                             Qatar
                  developed in Dubai, in its Free Trade Zone             Saudi Arabia                                         Commercial Branch
                  as well as in Abu Dhabi for the last 30 years
              ƒ   In Qatar, operating from Doha, for the last 38
                  years
                                                                    A comprehensive structure within the GCC
              ƒ   In Saudi Arabia, one of the first foreign banks
                                                                     ■      BNP Paribas has brought to the Region, strong professional
                  operating from Riyadh
                                                                            experts, based in Bahrain, catering to the most complex,
              ƒ   In Kuwait, the first foreign bank licensed by             specialized and sophisticated needs of our clients in the Gulf:
                  the Central Bank of Kuwait

       ■    A comprehensive set up of 6 Full Commercial
            Branches in Bahrain, Abu Dhabi, Dubai, Qatar,                         ƒ   Corporate Finance              ƒ   Cash Management

            Kuwait and Saudi Arabia as well as an offshore
                                                                                  ƒ   Structured Finance             ƒ   Asset Management
                                                                                  ƒ   Fixed Income                   ƒ   Private Equity
            Investment Banking Unit in Bahrain
                                                                                  ƒ   Debt Capital Market            ƒ   Wealth Management
       ■    More than 700 employees over GCC Countries,                           ƒ   Global Trade Solutions         ƒ   Islamic Banking (BNP
            with the regional hub located in Bahrain                                                                     Paribas Najmah)

                                                                                                                                June 8, 2011          5
2.   Financing needs of contracting companies

                                                June 8, 2011   6
Full range of expertise addressing all your requirements…

…through a Single point of entry
Through a genuine relationship-centred approach, BNP Paribas brings to its corporate clients the professionalism and experience of
its relationship management teams supported by product specialists dedicated to bringing suitable and optimal solutions.

Managing your daily business requirements
„   Optimize, secure and finance your trade cycle
„   Bridge your short-term treasury gaps
„   Guarantee your contractual commitments vis-à-vis your partners
„   Process your local and international payments

Optimizing your treasury
„   Enhance cost and operational efficiencies through payments automation
„   Improve financial control processes through e-banking reporting
„   Increase visibility on your liquidity towards making the right investment choices

Expanding your business in Kuwait, the GCC or globally
„   Review your business plans and arrange optimal financing structures matching your cash-flow profile
„   Arrange transitions from single funding sources to multilateral facilities (syndications / club deals) or debt capital market solutions
„   Advise you on external growth strategies and opportunities

Managing your financial risks
„   Keep you informed about financial markets updates, trends and BNP Paribas’ renowned economic research and forecasts
„   Advise and offer optimal solutions to manage your exposure to foreign exchange, commodities and interest rate fluctuations

                We believe that our partnership’s success starts at understanding your business
                               environment, specificities, strategy and objectives

                                                                                                                                   June 8, 2011   7
Comprehensive solutions to the Contracting Industry

                                                                                                                OBJECTIVE

    Tender Phase            Contract Award         Contract execution          Post-performance                To outsource to our
                                                                                                              professionals all your
                             „   Timely issuance         „   Securing your       „   Guaranteeing your   financing matters and focus on
    „   Bid bond issuance                                                            accomplishment          your core competency
                                 of contract                 financing needs
                                 guarantees                                      „   Releasing your
    „Banker
                                                                                     cash
    recommendation           „   Assessing your
                                 Working Capital
                                 Requirements

                                                                                                                    June 8, 2011     8
Contracts Management

Contract award

„ Assist and advise on wording / structures of the contract guarantees
„ Issue of Performance and Advance-Payment Guarantees
„ Arrange syndications / club deals for large transactions
„ Review your project provisional cash-flow
„ Structure optimal financing matching your requirements
„ Help you preserve your profitability against currency fluctuations (multiple-currency inflows / outflows)

Getting started

„   Fund your mobilisation costs (overdraft, short-term loans)
„   Secure and finance your procurement (letters of credit, stand-by LCs, payment guarantees, import loans, trust receipts…)
„   Finance your equipment (letters of credit, medium-term loans…)

Managing your receivables

„   Bridge your treasury requirements, through receivables discounting, matching your agreed payment terms.
„   Depending on your client’s creditworthiness, this asset-backed financing BNP Paribas may assist you in optimizing your financing costs and
    / or freeing your balance-sheet.

Optimizing your treasury and account monitoring

„   Release your cash through issuance of retention guarantee
„   Help you track your project-related inflows and outflows through contract-specific accounts for each currency
„   Manage your local and international payments
„   Process your FX transactions at competitive terms
„   Centralize your cash-flow including non-Kuwait based contract-related, through our GCC/ global network

                                                                                                                               June 8, 2011   9
3. Project Finance within Structured Finance

                                               June 8, 2011   10
Project Finance - A Worldwide Coverage

Project Finance across the Globe in figures                           Worldwide Coverage

 „       3   regions with regional hubs
 „       6   local teams
 „     160   dedicated professionals (post Fortis Merger)
 „     223   m Eur worldwide revenues
 „    19.1   bn Eur worldwide commitment end 2010
 „     460   projects worldwide end 2010
 „    Tier 1 player                                                                                                        Regional hub
                                                                                                                           Local office

Expertise and Commitment in all sectors                               PF Portfolio by Sector
 „    Expertise in all sectors and Country-specific knowledge
        ƒ Power (conventional & renewable)
                                                                                                         Transportation
        ƒ Oil & Gas                                                         I nfra
                                                                                                              16%
                                                                             25%
        ƒ Infrastructure & Infrastructure PPP                                                                             Water & Environment
                                                                                                                                   5%
 „    Expertise in all Project Finance Services
        ƒ Strong qualifications in advising, structuring, arranging
            and agenting Project Finance transactions                                                                      Oil & Gas
                                                                                                                              16%
        ƒ Building innovative financial solutions and developing        Conventional Power
                                                                                                 Renewable       Other
            creative ideas                                                     24%
                                                                                                    9%            5%

 „    Top positions in main possible debt sources
        ƒ Syndication loan markets
        ƒ Export Credits & Multilaterals                                                 Project Finance Portfolio

        ƒ Bonds                                                                       End 2010 Commitment by Sector

        ƒ Islamic Financing

                                                                                                                           June 8, 2011    11
Project Finance - A strong presence across various sectors

      Power                           Renewables                      Oil & Gas                   Petrochemicals

„   Offtake                     „   Wind                       „    LNG: liquefaction and    „   Refineries
       ƒ    tolling or PPAs     „   Hydro                           receiving terminals      „   Polyolefins
       ƒ    merchant                Solar                      „    Exploration &
                                „
                                                                    Production (upstream)    „   Other downstream
„   Thermal (CCGT / Coal /      „   Geothermal                                                   products (incl.
    Oil)                                                       „    Transportation : oil &       fertilisers)
„   Single Asset or Portfolio   „   Biomass                         gas pipelines, LNG       „   Biofuels
                                                                    ships
„   Transmission lines                                         „    Storage                  „   Gas-to-Liquids

    Transportation                  Water & Utilities              PPP Accommodation              Urban Waste
                                                                                                   to Energy
                                                                    /Public Buildings

„   Highways                    „   Water distribution         „    Police Headquarters
„   Railways / Rolling stock    „   Water treatment            „    Hospitals
„   Airports                        (including desalination)   „    Prisons
„   Ports                       „   Regulated gas &            „    Schools                  Defence Equipments /
                                    electricity distribution                                      Satellites

                                                                                                        June 8, 2011   12
Project finance deal map in the GCC

KSA                                                          Qatar
■   Ibn Rush Petrochemical   ■   Rabigh Refinery and          ■      Al Dur IWPP               ■   Q-CHEM
■   Ibn Zahr                     Petrochem                    ■      Ras Laffan IPP            ■   QAPCO
■   Marafiq IWPP             ■   Saudi Chevron Petrochem      ■      Ras Laffan II & III LNG   ■   QAFAC
■   NatPet                   ■   Saudi Kayan Petrochem        ■      Ras Laffan LNG            ■   Qatalum
■   NSCSA                    ■   Saudi Aramco IPP             ■      Rasgas II &III LNG        ■   Qatar Vinyl Co.
■   Rabigh IWSPP             ■   Yansab Petrochem             ■      Ras Abu Fontas IWPP       ■   Qatargas IV LNG
■   Ma’aden phosphate Co     ■   National Chevron Phillips    ■      Oryx GTL LNG              ■   Qatargas III LNG
                                                              ■      NGL 4 Tranches            ■   Qatargas II LNG
                                                              ■      1-2 QGTC
Kuwait
■   Greater Equate           ■   Equate Petrochemical        UAE
    Petrochemical
                                                              ■      Dolphin Energy LNG        ■   Taweelah A2 IWPP
                                                              ■      Fujairah IWPP             ■   Shuweihat IWPP
                                                              ■      Palm Water                ■   EMAL
                                                              ■      Taweelah A110 IWPP        ■   ISTP 1 and 2
Yemen                                                         ■      Taweelah B IWPP           ■   YahSat PPP
■   Yemen LNG                                                 ■      Taweelah A1 IWPP          ■   Shams 1
                                                              ■      Masdar City               ■   Emirates Airlines

Bahrain
                                                             Oman
■   Al Dur IWPP              ■   Alba Aluminium               ■      Sohar IWPP                ■   Oman Polyethylene
■   Al Hidd IWPP             ■   Bapco Refinery and           ■      Salalah IWPP              ■   Oman Polypropylene
■   Al-Ezzel IPP                 Petrochemical
                                                              ■      Barka II IWPP             ■   Omifco Fertiliser
                                                              ■      Barka IWPP                ■   Sohar Refinery
                                                              ■      Manah II IPP              ■   Oman LNG
                                                              ■      Manah I IPP               ■   Qalhat LNG
                                                              ■      Sohar Aluminium

                                                                                                     June 8, 2011     13
Over the years, a recognized worldwide leader

Infrastructure Journal – 2010 Global MLA                 Recent Awards

                                     Total USDm    %
                                                         „   Arranger of the Year 2010, Infrastructure Journal
Rank      Mandated Arrangers
1         BNP Paribas                 10,304.3    7.14   „   PPP Arranger of the Year 2010, Infrastructure Journal
2         Crédit Agricole Group        7,076.9    4.91
                                                         „   Transport Arranger of the Year 2010, Infrastructure Journal
3         Société Générale             5;766.2    4.00
4         Bank of Tokyo-
                                                         „   Renewables Financial Advisor of the Year 2010, Infrastructure
                                       4,504.4    3.12
          MitsubishiUFJ                                      Journal
5         Grupo Santander              4,176.7    2.90
                                                         „   Best Global Infrastructure & Project Finance House, Euromoney,
6         UniCredit                    3,841.4    2.66
                                                             2010 & 2009
7         ING Bank                     3,311.9    2.30
                                                         „   Highly commanded in Infra. and Project Finance, The Banker,
8         SMBC                         3,224.8    2.24
                                                             2009
9         Natixis                      2,984.0    2.07
10        La Caixa                     2,937.4    2.04   Ranking

                                                         „   No 1 Global MLA for Project Finance Loans,
                                                             Infrastructure Journal, 2010
                                                         „   No 3. Global MLA for Project Finance Loans, Dealogic, 2010
Infrastructure Journal – 2009 Global MLA
                                                         „   No 2. Global MLA for PPP Project Finance Loans, Dealogic, 2010
Rank      Mandated Arrangers         Total USDm    %     „   No 1. EMEA Project Finance Loans, Project Finance
1         Calyon                       4,468.7    4.25       International & Infrastructure Journal, 2010
2         BNP Paribas Group            3,519.3    3.27   „   No 3 MEA Financial Advisor, Infrastructure Journal, 2010
3         Grupo Santander              3,432.8    3.26
                                                         Previous Ranking
4         SMBC                         3,381.6    3.21
5         Societe Generale             3,215.3    3.05   „   No. 2 Global MLA for Project Finance Loans (incl. Fortis),
6         WestLB                       3,189.1    3.03       Infrastructure Journal, 2009
7         Caixa Geral de Depositos     3,001.5    2.85   „   No 1. MEA Financial Advisor, Infrastructure Journal, 2009
8         State Bank of India          2,450.0    2.33
                                                         „   No. 1 Financial Advisor of Global Project Finance deals, Project
9         Bank of Tokyo-                                     Finance International & Infrastructure Journal, 2008
                                       2,228.8    2.12
          Mitsubishi UFJ
                                                         „   No 1. Global Project Finance Loans Mandated Arranger, Thomson
10        ING Bank                     2,176.2    2.07
                                                             Reuters, 2007

                                                                                                               June 8, 2011     14
Advisory role

                                         Bidding Phase                                                           Closing phase

              Bankability                Financial               Lending group                 Finalisation of              Achievement of
Steps
               Analysis                 Structuring               Constitution                 Due diligence                Financial Close

         „   Review and         „   Assist the              „   Assist the sponsors       „   Finalise the           „   Assist the Consortium in
             analyse the            Consortium in               in their relations with       selection and              the concession contract
             tender                 designing an optimal        external advisors:            appointment of:            and other agreements
             Documentation          and bankable                                                                         negotiations
                                    financial structure            - Legal                       - MLA(s)
         „   Identify the                                                                                            „   Keep the Financial
             project major      „   Identify the relevant          - Insurance                   - Co-                   model, the Information
             risks                  financing sources                                              underwriter           memorandum and the
                                                                   - Technical                     participant           Financing Plan up to
Action   „   Assist in the      „   Develop a financial                                                                  date as negotiations
             structuration of       model which will be     „   Prepare a Preliminary            - Equity                progress
             the appropriate        able to test the            Information                        providers, or
             mitigants              robustness of the           Memorandum (PIM)                                     „   Assist the Consortium in
                                    projects under              to be sent to pre-               - Funds                 securing all conditions
                                    different scenarios         selected institutions                                    precedent
                                                                capable of playing the    „   Assist the
                                                                role of MLA                   Consortium in
                                                                                              securing final Due
                                                            „   Secure a preliminary          Diligence reports
                                                                commitment from
                                                                these institutions

                                                                                                                                  June 8, 2011      15
Arranger Role…complementary to the advisory role

Arranging

„ Strong appetite for arranging roles
     ƒ Focus on transactions where our arranging role can add value
     ƒ Strategic utilisation of BNP Paribas’ balance sheet
     ƒ Confirmed by our worldwide leader position in Project Finance MLAs League Tables
„ Ability to advise if the client so chooses
„ Generally, we are not interested by a simple participation

Advisor and Arranger: Two complementary roles

„ As Financial Adviser, BNP Paribas' priority is always to protect the Sponsors’ interests, and push the limits of bankability
„ Due to its consistent top bookrunner position, BNP Paribas has a true insight into how the markets are reacting at any given time
„ BNP Paribas usually underpins its advisory mandates with a commitment to bid as lead arranger if the Sponsor so wishes
„ Conflicts of interest are removed by virtue of the fact that:
    ƒ When BNP Paribas bids on its own for the Lead Arranging role, it is always in competition with other prospective MLAs
    ƒ If the Adviser has performed, there should be little scope for advisory work once the MLAs have been appointed
„ On multiple occasions, BNP Paribas has been both Adviser and Arranger (Ankara BO, Sohar IPP,QVC, Taweelah A1, Qatalum,
  YahSat, …)

                                                                                                                         June 8, 2011   16
4. Overview of the financing market

                                      June 8, 2011   17
Constraints in liquidity due to the global crisis

PF market trend: a rebound in 2010                                        Global Project Finance volumes
                                                                          USD bn                                                              Deals
„    From 2002 to mid-2008, the Project Finance market showed
     constant growth with record volumes resulting from increasing
     demand in Power, Infrastructure and Oil & Gas
„    Market conditions since Summer 2008 have resulted in a
     significant backlog of transactions as the need for infrastructure
     continues to be strong despite the global economic recession
„    Global Project Finance volume reached a record USD 354.6bn in
     2010, up 22% on the USD 289.9bn raised during 2009 and up
     11% on the previous full year high in 2008 (USD 320.5bn)
„    Project finance loan volume reached USD 279.8bn in 2010, up
     27% compared with USD 220.7bn in 2009, the highest level on
     record.

                                                                          Source: Dealogic 2010

PF market per sector: rebound in 2010                                     Back to more liquidity
                                                                          „     Market liquidity for PF transactions has returned to both the bank
                                                                                and bond markets with significant improvements over the last
                                                                                months: NordStream, Jubail, Shams, The Flemish Schools…
                                                                          „     Markets back to pre-crisis structures with longer maturities, cash
                                                                                sweeps gradually moving out, shorter tails accepted and less
                                                                                equity than 2009/2010 deals
                                                                          „     Lending appetite has significantly increased, driven by:
                                                                                   ƒ Improved balance sheet position
                                                                                   ƒ Renewed competition between banks

Source: Dealogic 2010

                                                                                                                               June 8, 2011      18
GCC an encouraging recovery

„ A strong recovery from the global crisis thanks to a positive „ Given sustained hydrocarbon revenues, fiscal performances
  conjectural situation combined with an adequate answer          will be comfortable in 2010 and 2011. Public debts are stable at
     „ Rebound in oil prices boosted oil exporters’ receipts
                                                                  moderate/low levels

     „   Sizable and rapid fiscal policy response, particularly for oil                                               Ease in liquidity ratio, %
                                                                                         130
         exporters, to strengthen the non oil industries and based on
         strong public sector balance sheets through stimulus                            120

         measures                                                                        110

     „   Spillover effects on regional oil importers (strong trade links)                100

                                                                                          90

                                                                                                                                                                                   Saudi Arabia
                                                                                          80                                                                                       Bahrain
                                                                                                                                                                                   Kuwait
                                                                                                                                                                                   Qatar
                                                                                          70
                                                                                                                                                                                   Oman
                                                                                                                                                                                   UAE
                                                                                          60

                                                                                                                           08

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                                                                                                                                              Source: IMF

                                                                            „ Economic Outlook for the region closely linked to global
                                                                              development, through the oil prices
                                                                                 „   Stagnant demand from advanced economies will be offset by
                                                                                     rapidly growing emerging markets
                                                                                 „   Oil and Gas is set to increase, particularly in Saudi Arabia
                                                                                     and Qatar, thanks to some major projects expected to come
                                                                                     on stream

„ Banks fundamentals remain sound and state support is
  strong
     „   GCC banks are on average well capitalized.
     „   NFA position remains positive in general
     „   Sovereign support to banks is strong, notably via
         recapitalisation
                                                                                                                                                                    Source: IEA Oil Market Report 10 December 2010
                                                                                 Source : Arabia Monitor 2010

                                                                                                                                                                                                June 8, 2011   19
MENA challenges ahead

„ Credit growth
     „   Credit conditions still suffering from the Dubai issues and fearing the future debt restructuring and refinancing walls
     „   Government support has so far enabled the market to continue functioning and has strongly limited the spillovers effects
     „   Necessity to continue this work of financial intermediation revival

„ Refinancing walls
     „   USD 70bn of debt due in 2011 (GCC)
     „   Regional bond markets active to tap into global investor appetite (IPIC, IDB)

„ Inflation
     „   Sensitivity to commodity prices that is leading to inflationary pressures

„ Economic reforms have to continue and the fiscal space to be carefully managed
     „   The reforms have mainly stayed on track during the crisis and consequently allow the continuity of the economic transformation
         process
     „   In the future years the ability to manage prudently oil revenues while trying to diversify the economic base and to scale up non oil
         sources of growth will be key
                                             Soverign Cah Market Spreads

                                         Source : BNP Debt Weekly Middle East

                                                                                                                                   June 8, 2011   20
5. PPP scheme

                June 8, 2011   21
Main features of the possible economic model

„ The selection of the economic model will primarily depend on the nature of the underlying assets, in particular:
      ƒ   whether the scope of the underlying assets is well-defined and expected to remain mostly unchanged in the future or whether the
          assets are expected to be subject to evolutionary changes that may not be fully predictable on day one
      ƒ   whether demand risk may be transferred to the private sector and whether the project company may collect revenues directly from
          users

„ Overall three main categories of economic model could be considered :

                                                                                                                         June 8, 2011   22
PPP scheme (availability based, no traffic risk)

„ Principles
   ƒ   Transfer of risk to the private sector primarily limited to construction, operation and maintenance;
   ƒ   Payments to the Concessionaire is made on the basis of the “availability” of the assets;
   ƒ   The payment mechanism should:
       – cover operating costs, debt service and equity return of the project company under a base case;
       – adjust for sub-standard performance, and deductions should reflect the severity of failure.

„ Main advantages of PPP Scheme vs. Concession Scheme
   ƒ   Often viewed as less risky because traffic risk is not shifted. Low risk profiles (no traffic risk) justifies more aggressive financial structure
       (leverage, debt tenor and pricing, debt service cover ratio and equity return);
   ƒ   Provide more flexibility to the Grantor in relation to tariff policies;
   ƒ   Provide more value in developing “smart design” than developing thorough traffic risk and tariffs level assessment;
   ƒ   Expectation that availability payment (vs. traffic risk) will be reflected in lower cost of capital for bidders;

„ Issues/Challenges
   ƒ   Upside for the project company is limited by the maximum availability payment: it may impact the risk discussions/allocations;
   ƒ   Potential creditworthiness issues in respect of the Grantor: if the Grantor is not the State, support from the State may be needed.
       Ultimately, State’s involvement is significant.
   ƒ   Amount of debt to be raised by the Concessionaire may be very high given the scale of the investment raising liquidity issues: up-front
       public subsidy has to be considered in order to scale down the amount of debt and the availability payment.

                                                                                                                                      June 8, 2011    23
Kuwait Government privatisation strategy

Major opportunities driven by the USD 125 bio national 5-year plan

„ A Public Private Partnership (“PPP”) program established by the Government of Kuwait in order to create a favorable environment

„ A strategy to promote and support increased private-sector participation in the infrastructure development

„ A program providing significant investment and financing opportunities for the private sector

„ The most significant objective of the plan include vesting into private sector the right to lead development projects through:

   ƒ the gradual reduction of public sector dominance
   ƒ the increase of private sector participation
   ƒ the increase of citizen ownership of economic activities

Paternships Technical Bureau (“PTB”) to promote Investments……

„ Through the implementation of the High Committee and the PTB the Kuwait government is aiming at creating the perfect environment to
promote its mega projects to the private sector
„ The High committee and the PTB will help ensuring:
   ƒ the pivate sector has more way to play its basic role in connection with production, employment, administration and income generation
   ƒ Kuwait organizational statutes and legal environment are well designed to attract financial investments
„ PTB is the focal point for Kuwait’s PPP program and is involved in all phases of PPP projects from inception to financial close
„ PTB is to implement the solutions to provide the conditions for implementing development projects and facilitate paternship between the
public and private sectors

         A development plan designed to achieve sustainable and diversified development of Kuwait

                                                                                                                                   June 8, 2011   24
6. Upcoming opportunities in the GCC

                                       June 8, 2011   25
Infrastructure - GCC transport developments

„ Necessity to meet the pressing regional logistics demands
„ Key driver of the rail industry will be public-private partnerships
„ Planned / under way transport infrastructure projects in the GCC: USD 220bn+
„ Planned / under way transport infrastructure projects in the MENA: USD
  365bn+

GCC Railway Network

„ Project Estimated Costs: USD 30bn
„ Location: Kuwait, Bahrain, Saudi Arabia, Oman, Qatar, UAE
„ 2,117km rail network starting from the North of Kuwait (border with Iraq) to
  Muscat with connections with the Saudi railway in Damman and passage
  through all the industrial centers of the region (Messaied, Jebel Ali, Sharjah,
  Sohar, Barka).
„ The project also includes bridges, causeways, tunnels and cutting more than
  21km long.Diesel-powered trains operating at speeds of up to 200km/h would
  carry passengers and freight between the six states.
„ The consortium of Systra, Khatib and Alami, and Canrail is the project technical
  consultants and the World Bank will be advising on the tendering process
„ The six GCC countries will be responsible for developing their sections of the
  rail line independently. However, the chosen companies to execute the project
  on their territory should all abide by unified standards and specifications
„ In each of the GCC’s capitals, people will travel on metro and tram systems built
  to reduce congestion and facilitate movement
„ Start date: undisclosed, but completion expected in 2017. By 2020, the GCC
  railway will have been operational for three years, transporting passengers and
  freight around the region

                                                                                      June 8, 2011   26
Euromoney Deal of the Year 2010: Shams One - UAE

  Presentation                  Project Description                                                       Total Project Costs

Borrower Shams Power Company   „ The Shams One Project involves the design, construction, operation
          PJSC                                                                                            circa. USD 750m
                                 and maintenance of a Concentrated Solar Power (“CSP”) plant located
                                 in Abu Dhabi on a build, own, operate basis.
Sponsors Total - Abengoa -
                               „ The Project has a total installed net rated power output of 109 MW and   Financing split
        Adfec/Mubadala
                                 is based on the proven parabolic trough (PT) technology.
 BNP Paribas role
                               „ The Project is sponsored by Abu Dhabi Future Energy Company PJSC
                                 and Total Abengoa Solar Emirates Investment Company. ADFEC is a
Financial Adviser                wholly-owned subsidiary of Mubadala Development Company. The                  150
                                 share ownership of the Project is 60% for ADFEC as local shareholder
                                 and 40% for the Foreign Shareholder, replicating the successful                     mUSD
                                 scheme applied by ADWEA in IWPP transactions.

                               „ EPC Contractors are Abeinsa/Abengoa solar consortium.                                    600

                               „ O&M: Abengoa Solar & Total.

                                                                                                          Senior Debt           Equity

                                                                                                                 June 8, 2011       27
Greater Equate

 Project sponsored by Petrochemical Industries Company KSC            2006                              Kuwait

(PIC), wholly owned by the Kuwait Petroleum Company (KPC),
The Dow Chemical Company via Dow Europe Holding B.V.,
Boubyan Company KSC (BPC) and Al-Qurain Petrochemical
Industries Company KSC (QPIC)
                                                                             G R E A T E R E Q UA T E

The petrochemical projects belong to 3 JVs: EQUATE, The                 USD 3B n P etro chemical Co mplex
Kuwait Olefins Company KSC (“TKOC”) and The Kuwait Styrene
Company KSC (“TKSC”)                                                              Lead A rranger

The Greater Equate debt was aimed at financing the following
      „   Expansion of the Polyethylene facilities
      „   Olefins II Project (TKOC)
      „   Styrene Project (TKSC)
      „   Utilities and Infrastructure Project

After Petrochemical Industries Company decided to merge
another olefins project with Equate 2, the plant's capacity will be
doubled from original 650,000 tons per year of ethylene, 350,000
tpy of polyethylene and 350,000 tpy of ethylene glycol

                                                                                                                 June 8, 2011   28
7. Selected BNP Paribas References

                                     June 8, 2011   29
Selected Advisory and Arranging Power References

                                                                                        Middle East – IWPP                           Gulf – Power
                                                                                           Deal of the year                        Deal of the year

Ongoing                    Kuwait   2009                        Oman      2009                     Jordan     2009                    Bahrain

          Kuwait Az- Zour                   SALALAH IWPP                         AL QATRANA IPP                          AL DUR

      1500 MW Power and btw
          102-107   MIGD              445MW Independent Water             USD 461M 373MW CCGT Power             USD 2.2Bn 1,234MW Power
            ’
         Desalination Plant                 Power Plant                              Plant                    Facility & 48 MIGD Desalination
                                                                                                                            Facility
    Financial Advisor to the PTB            Financial Advisor              Financial Advisor & Mandated                Financial Advisor
                                                                                   Lead Arranger

  2009                        UAE   2008                        Qatar     2007                       UAE      2007                Saudi Arabia

          SHUWEIHAT II                     RAS LAFFAN C IWPP                EMIRATES ALUMINIUM                       MARAFIQ IWPP

                                     USD 3.9Bn 2,730MW gas-fired           USD 7Bn 0.7mtpa aluminium          USD 3.3Bn 2,750MW power and
   USD 2,7Bn 1,507MW Power &
    100MIGD Desalination Plant      power & 63 MIGD desalinisation         smelter and 2,000MW power             176MIGD water facilities
                                                plant                                 plant
                                         Documentation Bank                 Mandated Lead Arranger &          Financial Advisor, MLA, Hedging
     Mandated Lead Arranger
                                                                                   Bookrunner                       Bank & Bookrunner

                                                 Middle Eastern Power                                                   Middle East - Power IWPP
                                                       Deal of the year                                                          Deal of the year

                                                                                                                                         June 8, 2011   30
Selected Advisory and Arranging Renewables References

 Ongoing                    Colombia   2010                        UAE     2009                      USA         2009                        USA

        HIDROTUANGO                            SHAMS ONE                    FIRST WIND - MILFORD I                      EME - VIENTO II

  USD 2.3Bn Hydro Power Plant           100 MW Solar Thermal Power         USD 516M 203.5MW Wind Farm             USD 482M Recapitalization of
            Project                               Plant                             Financing                     305MW Wind Power Portfolio

           Equity Advisor                     Financial Advisor                     Lead Arranger                    Arranger & Bookrunner

 2009                           DRC    2008                        Italy   2008                        UK        2008                        Laos

             INGA 3                           RINNOVABILI                         FRED OLSEN WIND                       THEUN HINBOUN
                                                                                                                         HYDROPOWER

 4,500 MW Hydro Power Project          EUR 773M Wind Farm Portfolio        GBP 303M 315.5MW Wind Farm            USD 715M Expansion of 210MW
                                              Construction                         Refinancing                        Hydro Power Project

        Financial Advisor                 Mandated Lead Arranger                    Lead Arranger                    Financial Advisor, Lead
                                                                                                                  Arranger, Doc & Intercreditor
                                                                                                                              Bank

                                                                                          Europe – Renewable                 Asia Pacific – Renewable
                                                                                              Deal of the Year                        Deal of the Year

                                                                                                                                             June 8, 2011   31
Selected Advisory and Arranging Infrastructure References

 2009                        UAE         2009                          UAE          2008                            UAE        2008                             UAE

 2nd INDEPENDENT SEWAGE                     MANHAL - LA SORBONNE                            PALM JEBEL ALI                                    YAHSAT
 TREATMENT BOOT PROJECT                                                                                                                   PPP Life: 15 years

    USD 500M Wastewater                         USD 432M University                        Potable Water System                       USD 1.7Bn Satellite
      Treatment Plant                              Construction                                                                     Communications Project

        Financial Advisor                          Lead Arranger                             Financial Advisor                   Financial Advisor & Mandated
                                                                                                                                         Lead Arranger

                   2008                           UAE       2008                   Saudi Arabia        2006                               Oman

                                                                                                                 SHARQIYAH-SUR
                                                                                                              DESALINATION PLANT
                    1st INDEPENDENT SEWAGE                      SAUDI LANDBRIDGE
                                                                                                              Concession Life: 20 years
                    TREATMENT BOOT PROJECT                     Concession Life: 50 years

                        USD 400M Wastewater                  USD 8.0Bn Railway Link Project               USD 150M Desalination Plant
                          Treatment Plant                     between Riyadh and Jeddah

                            Financial Advisor                         Financial Advisor                   Financial Advisor to a bidding
                                                                                                                   Consortium

                                                                                                                                                               June 8, 2011   32
Selected Advisory and Arranging Oil & Gas References

                                                         Asia Pacific               Middle East - Oil & Gas
                                                      Deal of the year                     Deal of the year

2010
2010                   Saudi Arabia
                                      2009                Papua New       2009                       Qatar        2009                        Egypt
                                                             Guinea

         MA’ADEN ALUMINIUM
                                               PNG LNG                           DOLPHIN ENERGY                           TCI SANMAR
        MA’ADEN ALUMINIUM

          USD
           USD5Bn
               5Bn Financing
                   Financing
                                       USD 18.3Bn LNG Development            USD 6.36Bn Refinancing                  USD 868M EDC-VCM-PVC
        of the giant Aluminum                                                                                               Complex
                                                Financing
                smelter
        Mandated
          AdvisorLead Arranger
                  to Alcoa               Mandated Lead Arranger              Mandated Lead Arranger                      Structuring Bank
       Mandated Lead Arranger

 2008                  Saudi Arabia   2008                   Yemen        2008               Saudi Arabia         2008                Saudi Arabia

 SAUDI POLYMERS COMPANY                       YEMEN LNG                      MA'ADEN PHOSPHATE                           SAUDI KAYAN

       USD 5.2Bn Expansion of         USD 4.9Bn 6.7mtpa LNG Plant          USD 5.5Bn Fertilizer Project               USD 10Bn Greenfield
       Petrochemical Complex                                                                                         Petrochemical Complex

  Mandated Lead Arranger, US-            Mandated Lead Arranger              Mandated Lead Arranger                 Financial Advisor & Initial
      Exim Facility Agent                                                                                           Mandated Lead Arranger

                                               Middle Eastern Oil &Gas                Middle Eastern Industrial
                                                       Deal of the year                        Deal of the year

                                                Global Deal of the year

                                                                                                                                                  June 8, 2011   33
Selected railway references

                              June 8, 2011   34
Selected PPP/PFI references

                              June 8, 2011   35
BNP Paribas team contact details

                                                BNP Paribas IN THE GCC

         Jean-Christophe Durand                                    Christophe Mariot
         Global Head of the MESA Region                            Regional Head - Structured Finance
         Head of the MEA Region (CIB) - Country Head Bahrain       GCC Countries

         BFH West Tower – PO BOX 5253 Manama                       BFH West Tower – PO BOX 5253 Manama
         Phone: +973 17 86 60 02                                   Phone: +973 17 86 60 50
         e-mail: jean-christophe.durand@bnpparibas.com             e-mail: christophe.mariot@bnpparibas.com

                                                  BNP Paribas IN KUWAIT

         Alain Lamarlere                                           George Ghantous
         Country Head                                              Deputy General Manager

         Dar Al Awadi Complex - PO Box 21188 Safat 13072
                                                                   Dar Al Awadi Complex - PO Box 21188 Safat 13072
         Kuwait
                                                                   Kuwait
         Phone: + 965 22 98 76 10                                  Phone: + 965 22 98 76 20
         e-mail: alain.lamarlere@bnpparibas.com                    e-mail: george.ghantous@bnpparibas.com

         Anita Basquin                                             Jihad EL Alam
         Head of Trade Center                                      Cash Management Officer

         Dar Al Awadi Complex - PO Box 21188 Safat 13072           Dar Al Awadi Complex - PO Box 21188 Safat 13072
         Kuwait                                                    Kuwait
                                                                   Phone: + 965 22 98 76 60
         Phone: + 965 22 98 76 29
                                                                   e-mail: jihad.elalam@bnpparibas.com
         e-mail: anita.basquin@bnpparibas.com

                                                                                                                     June 8, 2011
                                                                                                                      07/06/2011    36
Disclaimer

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Opinions expressed herein reflect the judgement of BNP PARIBAS as of the date of this presentation and may be subject to change
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                                                                                                                               June 8, 2011   37
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