Donal Murphy

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Donal Murphy Director Global Project
Finance Bank of Ireland
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Health and Education Projects PPPs and
Project Financing
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Financing Infrastructure

• The role of debt funding for Infrastructure
  development
• Project Finance and PPPs in action
• Bank of Ireland and PPPs
• PPPs in Ireland
• Current Market
• International
• Ireland
• Looking Forward

The Governor and Company of the Bank of Ireland
is regulated by the Financial Regulator in
Ireland. A member of Bank of Ireland Group.
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PPP Types of PPP

• Private sector construct or operate contracts
• e.g. Luas, Port Tunnel
• Design, Build and Operate (DBO)
• e.g. Waste Water Projects
• PPP with Property angle
• e.g. Greystones Marina, Housing Regeneration
• Hybrid PPPs
• e.g. Co-Located Hospitals
• Concession
• e.g. Toll Roads M1 Dundalk, M7/M8 Portlaoise
• Design, Build, Finance and Operate (DBFO)
• e.g. Schools, Hospitals, Courts, Government
  Offices

The Governor and Company of the Bank of Ireland
is regulated by the Financial Regulator in
Ireland. A member of Bank of Ireland Group.
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PPPs And Project Finance structures
Lenders
Advisors
Direct Agreement
Loan Agreement
Direct Agreements
Long Term Contract / Concession
Builder
Contract
Borrower
Construction Contract
Payment
Service Contract
Service Co
100 Ownership
Shareholders
The Governor and Company of the Bank of Ireland
is regulated by the Financial Regulator in
Ireland. A member of Bank of Ireland Group.
Bank of Ireland is regulated by the Financial
Regulator
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PPPs Why use in Health and Education

• Construction to time and budget
• Long term Facility Management, including
  lifecycle
• Spreads cost over life of asset
• passes these risks to the party best able to
  manage them
• Tends not to be used for the provision of Health
  or Educational Services
• But Frees up Heath and Education professionals
• from managing School and Hospital Building
  programmes
• from day to day facility management helpline
  concept
• Requires mindset changes from public and private
  partners

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PPPs - International Experiences
The Governor and Company of the Bank of Ireland
is regulated by the Financial Regulator in
Ireland. A member of Bank of Ireland Group.
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Bank of Ireland and Project Finance

• 1.0bn ? ? ? ? ? ? ? ? ? ? ? ? ???
  4.1bn

The Governor and Company of the Bank of Ireland
is regulated by the Financial Regulator in
Ireland. A member of Bank of Ireland Group.
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Bank of Ireland - Health and Education PPPs

• Over 25 transactions closed
• Health PPPs/PFIs c300m
• Education PPPs/PFIs c400m
• Including..
• East Down and Lisburn Schools
• Derry Schools (closed late 08)
• Laois/Offaly Schools PPP (closed Mar 09)
• Macquarie/Pierse owned
• Pierse construction, Sodexo operations
• Bank of Ireland Senior Debt Provider
• 80m, 26.5 year PPP for 4 Schools
• 2,700 pupils in new schools from Sept 2010
• First Irish PPP to close since credit crunch

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PPP History in Ireland

• Pipeline Projects
• In procurement
• Decentralised Offices PPP
• Thornton Hall
• NRA Service Stations
• Dublin Metro North
• 2nd Schools Bundle
• National Concert Hall
• Announced
• 3rd Level Accommodation
• N17 and other roads
• 3rd Schools Bundle
• Radiation Oncology PPP
• Abbey Theatre
• Dublin Metro West

• Projects Closed
• Pilot Schools
• Maritime College
• M1
• N4/N6
• M8 Fermoy
• Limerick Tunnel
• N25 Waterford
• Criminal Courts
• Conference Centre
• M3 Clonee/Kells
• N6 Galway
• M7/M8 Portlaoise
• M50 upgrade
• 1st Schools Bundle

The Governor and Company of the Bank of Ireland
is regulated by the Financial Regulator in
Ireland. A member of Bank of Ireland Group.
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PPPs in current climate

• Short term
• Construction jobs
• Lower Construction Costs
• Certainty of delivery to time and cost
• No short term cashflow requirements from the
  State
• (and therefore no short term benefits in
  cancelling PPPs!)
• Medium/Long Term
• Maintain / improve competitiveness
• Certainty on maintenance and lifecycle
• Spread cost over life of asset
• Quality Health and Education Infrastructure
• What about the funding ..???

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The International Market

• Capital challenges
• Less focus on P/L
• Increased cost of funds
• Pricing the scarcity value of capital
• Tenor constraints
• Geographical retrenchment
• Reluctance to underwrite
• More Club deals
• Larger deals more difficult to close

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The Irish Market

• Retrenchment less banks in market
• Increased dependency on Irish banks
• Pricing and capacity implications
• Clubs for smaller deals
• Larger deals more challenging
• Bid Support - extent and duration of commitment

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..Looking forward

• Importance of deal flow
• To Economy
• To PF Market - bidders and banks
• Health and Education
• Tend to be small-medium sized transactions
• Crucial role for Irish banks
• Recapitalisation
• Examine alternative sources of finance
• State? Europe?
• Innovative sources e.g. UK Infrastructure Bank?
• Contractor strength
• More flexibility in bid processes

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Bank of Ireland PPPs
Celtic Roads Group (Portlaoise) Ltd M7/M8 Road
PPP 327 million Lead Arranger,
Underwriter, Agent Account Bank Bank of
Ireland
Tetra Ireland National Digital Radio
Service 86 million Lead Arranger, Underwriter,
Agent and Account Bank Bank of Ireland
N6 (Concession) Ltd N6 Galway to Ballinasloe
Road PPP 301 million Manager Bank of Ireland
Lisburn Education Partnership Ltd Northern
Ireland Schools PFI 31 million Lead Arranger
Underwriter Bank of Ireland
MPFI Schools 1 Ltd Laois /Offaly Schools
PPP 80 million Lead Arranger,
Underwriter, Agent Account Bank Bank of
Ireland
Belfast Education Services (Derry) Ltd Northern
Ireland Schools PFI 46 million Lead Arranger
Underwriter Bank of Ireland
East Down Education Partnership Ltd Northern
Ireland Schools PFI 38 million Lead Arranger
Underwriter Bank of Ireland
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Bank of Ireland International Experience
155 million Sole Lead Arranger and
Underwriter Bank of Ireland
Lancashire Waste PFI 343 million Joint Lead
Arranger and Underwriter Bank of Ireland
Riverside Energy from Waste 466 million Joint
Lead Arranger and Underwriter Bank of Ireland
Richmond AirportVancouver Link
Canada CAN602m Lead Arranger Bank of Ireland
Sea to Sky Highway Canada Co-ArrangerBank
of Ireland
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Contact Details
Donal Murphy Title Director, Ireland Phone
353 1 611 5396 Email donal.murphy_at_boimail.
com Peter ONeill Title SVP, North America
Representative Phone 203 391
5980 Email peter.oneill_at_boimail.com Alisdair
Caush Title Head of Global Project Finance
Asia Pacific Phone [phone]
Email alasdair.caush_at_boimail.com
Adrian Olsen Title MD Head of Global
Project Finance Phone [phone] Email
adrian.olsen_at_boiuk.com Andrew
Hartley Title Head of Infrastructure Phone 44
207 560 8422 Email andrew.hartley_at_boiuk.com Stev
e Moon Title Head of Energy Sector Phone
44 207 560 8423 Email steve.moon_at_boiuk.com
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