# Presentation: 185941

## A Conference on Providing Solutions and Creating Opportunities for U.S. Companies at the Multilateral Development Banks

**A Conference on Providing Solutions and ****Creating Opportunities for U.S. Companies at the ****Multilateral Development Banks**

## AFRICAN DEVELOPMENT BANK & MDB INTRODUCTION

- GENE R. HARRIS, SENIOR ADVISOR
- TRADE ADVOCACY & MULTILATERAL DEVELOPMENT BANK CENTER/
- SCO (TEMPORARY DESIGNATE), AfDB
- OPEN THE BANKS:
-   A Conference on Providing Solutions and Creating Opportunities for U.S. Companies at the Multilateral Development Banks
- U.S. Department of Commerce
- Washington, D.C.
- April 25, 2005

## International Trade Administration (ITA) Reorganization and Multilateral Development Bank  Operations

- Review New Changes to MDB Operations
- Aggressive Program:  Track, Alert, Encourage, Assist, Advocate, Report
- MDBs Funding Represents $ Billions of Commercial Opportunities
- Review AfDB
- Introduction to MDB funding

## An Office in the Commercial Service

## New Organization

## Est. 1964, first loan 1967
Largest investor in infrastructure& social development in Africa
Approves $2-3 billion annually
AfDB and World Bank mobilize $8 billion per year for Africa’s development

- Est. 1964, first loan 1967
- Largest investor in infrastructure& social development in Africa
- Approves $2-3 billion annually
- AfDB and World Bank mobilize $8 billion per year for Africa’s development

**Notes:**
To give you a brief sense of its history.  The Bank has been around since 1966 (the agreement to establish it was in 1964).  Over the past few years it has undergone a major reorganization leading to streamlined operations, institutional change, and much more transparency.  On its feet again, the AfDB is taking it slow but improving its results dramatically. 

## Owned by 77 member countries, 53 are African and 24 non-African
Located in Tunis, Tunisia (“Temporary”)	
U.S. joined AfDB in 1983
U.S. is third largest shareholderwith 6.6 percent in shares
U.S. Procurement very low
Enhanced Procurement OutreachProgram   

- Located in Tunis, Tunisia (“Temporary”)
- U.S. joined AfDB in 1983
- U.S. is third largest shareholderwith 6.6 percent in shares
- U.S. Procurement very low
- Enhanced Procurement OutreachProgram

**Notes:**
The AfDB is headquartered in Abidjan, Cote d’Ivoire and currently has 77members (53 African member states and 24 non-African member states).  It lends throughout Africa from Egypt in the North to Lesotho in the South, from Cape Verde in the West to Kenya in the East.

## The AfDB Group Consists of Three Institutions:
African Development Bank w/ Private Sector Department
African Development Fund
Nigeria Trust Fund 

- African Development Bank w/ Private Sector Department
- African Development Fund
- Nigeria Trust Fund

**Notes:**
AfDB Lending Windows

The AfDB has three main lending windows:
The African Development Bank is the hard loan window that offers loans to the most creditworthy African countries at near market terms.
The African Development Bank Fund is the soft loan window that offers highly concessional loans and grants to the poorer land less creditworthy African countries.
The Private Sector Department manages the private sector window that offers various instruments, including debt and equity financing at very competitive rates, to assist private enterprise development in African countries

## The African Development Bank

**AfDB FINANCES PUBLIC SECTOR PROJECTS IN COUNTRIES THAT ARE CREDIT WORTHY**

- Financing Instruments
-    Projects Loans
-    Sector Investment Loans
-    Lines of Credit
-    Sector Adjustment Loans
-    Structural Adjustment loans

- AfDB ALSO FINANCES THE
- PRIVATE SECTOR

**AfDB LOANS 1967 - 2003 = $38.4 Billion**

**Notes:**
The AfDB provides loans, guarantees, technical assistance/cooperation, grants, capital investment, and other types of financing to their developing member countries.

The difference between the AfDB and a commercial bank?
  The bank is mandated to go where the commercial financier may be hesitant.
  The projects that it finances must “augment the economic and social development of borrowing member countries.”

Loans:  Under most public sector projects, developing member “borrowers” secure AfDB funds with a sovereign guarantee and are expected to repay the debt.  Funds are loaned on both commercial and concessional terms.  Private sector loans are provided for private projects in developing countries.  These might be for Independent Power Production, BOT water plants, or other private undertakings that the Bank is supporting.

Guarantees:  Guarantees can benefit borrowers/host governments in many ways.  Often a guarantee will be just what is needed to ensure that a project materializes.  By covering risks that the market would not bear, or would be prohibitively high, the guarantee lowers the cost of financing.

Guarantees can also extend the term of lending beyond the period for which the market would normally lend--an essential consideration for infrastructure projects that require long-term debt in order to match debt service with revenues.

## Make Loans and Equity Investments for the Economic and Social Advance of Borrowing Countries in Africa
Provide Technical Assistance in Preparation and Execution of Development Projects & Programs
Promote Investment of Public & Private Capital for Development Purposes
Respond to Requests for Assistance in Coordination Development Policies and Plans in Borrowing Countries	
Support National and Multinational Projects and Programs which promote Regional Integration

- Provide Technical Assistance in Preparation and Execution of Development Projects & Programs
- Promote Investment of Public & Private Capital for Development Purposes
- Respond to Requests for Assistance in Coordination Development Policies and Plans in Borrowing Countries
- Support National and Multinational Projects and Programs which promote Regional Integration

**AfDB PRINCIPAL FUNCTIONS****	**

**Notes:**
The Bank may assist in promoting these projects by providing:
  Financial support through direct equity investment & the provision of loans
  Advice to enterprises on the structuring of such projects to minimize    financial risk
  Advice & assist government to introduce a conducive legal & regulatory framework

In selecting infrastructure projects, the Bank pays particular attention to:
the process of selecting BOO/BOOT developers & suppliers
  the BOO/BOOT terms
  the environmental aspects

The Bank does not participate in:
  real estate development projects
  providing direct trade
  housing finance to enterprises

## The African Development Bank

- <date/time>

-        The New Vision

- The Bank’s New Vision for Africa’s
- Development

- _Agriculture_

- _Governance_

- _Rural_
- _Development_

- _Gender_

- _Private Sector_

- _Environment_

- _Human Capital_

## Agriculture
Public Utilities
Energy
Manufacturing
Transportation	
Infrastructure
Industry & Extractive Industries
Banking & Finance
Health & Education
Social Reform
Good Governance
Tourism & Other Service Industries

- Public Utilities
- Energy
- Manufacturing
- Transportation
- Infrastructure
- Industry & Extractive Industries
- Banking & Finance
- Health & Education
- Social Reform
- Good Governance
- Tourism & Other Service Industries

**AfDB FOCUS ON SEVERAL SECTORS****	**

**Notes:**
The Bank may assist in promoting these projects by providing:
  Financial support through direct equity investment & the provision of loans
  Advice to enterprises on the structuring of such projects to minimize    financial risk
  Advice & assist government to introduce a conducive legal & regulatory framework

In selecting infrastructure projects, the Bank pays particular attention to:
the process of selecting BOO/BOOT developers & suppliers
  the BOO/BOOT terms
  the environmental aspects

The Bank does not participate in:
  real estate development projects
  providing direct trade
  housing finance to enterprises

## African Development BankOPERATIONAL ACTIVITIES

## African Development BankLoan & Grant Approvals by Sector, 2003

**Notes:**
Social Sector:  sanitation and water supply.

## International MarketingStrategy

- Essential:  Large and SMEs
- Examine strengths/weaknesses targeted markets
- Market penetration budget
- Assets:  State Gov., U.S. Commercial Service – USEAC & Overseas, USDOC, USTDA, OPIC, ExImBank, USAID, etc.
- MDB:  Hard Currency financing:  Other IFIs, UN, Etc.
- Shoe Leather & Callused fingers

## Opportunities: What, Where, How How to Access the Opportunities

- Learn About the Banks
- Learn the Project Cycle/Get into the Pipeline early!
- Learn the Procurement Rules
- Find Local Representation
- Focus on Relationships - Network!

## Multilateral Bank Websites

www.worldbank.org
www.iadb.org
www.adb.org
www.ebrd.com
www.afdb.org
www.nadbank.org

- www.worldbank.org
- www.iadb.org
- www.adb.org
- www.ebrd.com
- www.afdb.org
- www.nadbank.org

## Project Cycle

**Programming**

**Identification**

**Preparation**

**Analysis**** **
**& ****Dev.**

**Negotiation**** **
**& ****Approval**

**Execution**** &**
** ****Supervision**

**Borrower **
**& Bank**

**Borrower**
**& Bank**

**Borrower**

**Bank**

**Borrower **
**& Bank**

**Borrower **
**& Bank**

**1-2 Years**

**4-8 Years**

## Opportunities: What, Where, How GET INTO IDB’S PIPELINE

- BUSINESS/PROCUREMENT  BRIEFINGS
*UN DEVELOPMENT BUSINESS* (212-963-1381) orwww.devbusiness.com
- WWW.MDB
- REGISTER:  Data on Consultants System (DACON) Robert Wilson, World Bank (202-522-3901)_[dacon](mailto:dacon@dgmarket.com)__[@](mailto:dacon@dgmarket.com)__[dgmarket](mailto:dacon@dgmarket.com)__[.com](mailto:dacon@dgmarket.com)_ orwww.dgmarket.com/dacon/

##  MDBs Make Rules with the goal:   PROVIDE GOODS &SERVICES TO BORROWERS AT LOWEST COST, TIMELY DELIVERY & APPROPRIATE QUALITY & QUANTITY
Borrower Procures (Executing Agency)

Bidding Documents govern relationship between Bidder and borrower - Follow them to the letter. 

NO SPECIFIC MDB PROCEDURES BELOW THRESHOLDS

*Borrower* *Procures** *(Executing Agency)
*Bidding Documents *govern relationship between Bidder and borrower - Follow them to the letter.
- NO SPECIFIC MDB PROCEDURES BELOW THRESHOLDS

- Opportunities: What, Where, How
- MDB - PROCUREMENT

## EXECUTING AGENCY
MDB PROJECT TEAM
MDB COUNTRY OFFICE
NATIONAL GOVERNMENT 
U.S. COMMERCIAL SERVICE:  CS-MDB/CS-IN-COUNTRY, USEAC, TA & MDB CENTER
TDA, OPIC, EXIMBANK

- MDB PROJECT TEAM
- MDB COUNTRY OFFICE
- NATIONAL GOVERNMENT
- U.S. COMMERCIAL SERVICE:  CS-MDB/CS-IN-COUNTRY, USEAC, TA & MDB CENTER
- TDA, OPIC, EXIMBANK

**Opportunities: What, Where, How**** *****NETWORKING WITH DECISIONMAKERS -******YOUR KEY TO SUCCESS***

## Opportunities: What, Where, How The Commercial Service Network Support for U.S. firms

- Project identification, tracking
- Contact/partner identification
- Counseling, Guidance
- Advocacy
- Support in procurement disputes
- Local resource support

## THE POWER STAR

- MDB/HQ

- CS/MDD

- CS/OVERSEAS
- POSTS

- MDB
- Country Office

- Executing
-  Agency

- CS/USEACs
- &
- ADVOCACY
- CENTER

- State Govt/
- WTC/DEC

*MDB Projects*
- WWW.MDB

- Opportunities: What, Where, How
- THE *POWER* STAR

- OVERSEAS

- U S A

## Opportunities: What, Where, How Find a Local Representative

- Essential for Local Networking
- Remember - ***Borrower Procures***
**Use the Commercial Service Network to identify potential partners.**

## “Secrets” of Bidding

- Read bid documents carefully - BIDDER is responsible for finding ‘irregularities’
- Don’t make Assumptions - make sure you can comply fully with ALL requirements
- Ask Borrower to Clarify

## “Secrets” of BiddingProblems with the Specs?

- Let the Borrower Know
- Let the MDB Know
- Let CS/MDB Know
- RIGHT AWAY -not after the bid opening

## More “Secrets” of Bidding

- Bid Validity and securities for requested amount of time (usually 90 + some extra)
- No extra credit - follow specs
- No bait or switch
- No contingencies
- Prepare “boiler plate” ahead

##  TIPS   

- FOLLOW PROJECT THROUGH CYLCLE -START EARLY
- FOCUS EFFORTS
- LEARN THE COUNTRY PRIORITY
- OFFER THE SOLUTION
- LOCAL PARTNERS
- SPEAK THE LANGUAGE
- DRINK THEIR BEER

## Six Most Important Items for Success

- Network
- Network
- Network
- Follow up
- Follow up
- Follow up

## U.S. Commercial Service Liaison to the  African Development Bank

- Ron Soriano, Senior Commercial Officer
- (E-Mail:  _[Ron](mailto:Ron.Soriano@mail.doc.gov)__[.](mailto:Ron.Soriano@mail.doc.gov)__[Soriano](mailto:Ron.Soriano@mail.doc.gov)__[@mail.doc.](mailto:Ron.Soriano@mail.doc.gov)__[gov](mailto:Ron.Soriano@mail.doc.gov)_
- U.S. Commercial Liaison Office (AfDB)
- African Development Bank
- Office of the U.S. Executive Director
- ATR BAD
- Angle des 3 rues du Ghana, Hedi Nouira
-  et Pierre de Coubertin
- B.P. 323
- 1002 Tunis Belvedere, Tunisia
- Tel:  (216) 71-831-117
- Fax:  (216) 71-830-244

## TRADE ADVOCACY & MULTILATERAL DEVELOPMENT BANK  CENTER

- Gene Harris, Senior Advisor/
- Senior Commercial Officer (E-Mail:  Gene.Harris@mail.doc.gov)
- The Trade Advocacy & MDB Center
- International Trade Administration
- U.S. Department of Commerce
- 14th and Constitution Ave.,  NW
- Washington, D.C. 20230
- Tel:  (202)482-5074/3896
- Fax:  (202) 482-3508

## A Conference on Providing Solutions and Creating Opportunities for U.S. Companies at the Multilateral Development Banks

**A Conference on Providing Solutions and ****Creating Opportunities for U.S. Companies at the ****Multilateral Development Banks**