Diapositiva 1

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FINANCING PPP IN INTESA
SANPAOLO GROUP
Bulgaria Italy Bilateral Cooperation
Project Models and Strategies for Public-Private
Partnership Rome, 23rd October 2007
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Financing PPP in Intesa Sanpaolo Group

• Public Infrastructure Finance in
• Intesa Sanpaolo
• 2. Public Private Partnership
• 3. Project Finance
• 4. Case studies

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Financing PPP in Intesa Sanpaolo Group
Intesa Sanpaolo Group - Overview

• Intesa Sanpaolo is a new banking group resulting
  from the merge between Banca Intesa and Sanpaolo
  IMI.
• Intesa Sanpaolo is ranked among the top banking
  groups in the Euro Zone Countries, while in Italy
  is the market leader with an average market share
  of approximately 20 in all business areas
  (retail, corporate and wealth management).
• The Group has a selected presence in the
  countries of Central-Eastern Europe and in the
  Mediterranean area, with approximately 7 million
  customers in 12 countries.
• Intesa Sanpaolo has a well widespread
  international network with presence in 35
  countries.
• The Group is quoted both on the Milan Stock
  Exchange as well as on the New York Stock
  Exchange and it is a member of DJ Eurostoxx 50
  and FTSE EUROTOP 100.
• As at January 2, 2007

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Financing PPP in Intesa Sanpaolo Group
Banca Intesa Infrastrutture e Sviluppo Banca
O.P.I.
The merger between Sanpaolo IMI and Banca Intesa
will also involve the Merger of the two public
and infarstructure finance specialized banks of
the Group, Banca Intesa Infrastrutture e Sviluppo
and Banca OPI. The integration process will lead
by the end of the current year to a new entity
which represents the first Italian bank for
Public and Infrastructure Finance and one of the
leading operators in Europe, with its 42 bln of
assets and 301 mln of operating profit (2006
BIIS and BIIS aggregate figures), able to drive
the development of infrastructure, utilities and
all sectors involving central and local
governments, also encouraging a closer
cooperation between the Public and Private
sectors. The new Bank will supply its clients,
i.e. Central Governments, Public Entities, Local
Authorities, Public Utilities and General
Contractors with a wide range of financial
products, both traditional and structured (short,
medium and long term lending, Project Financing,
Securitization, Asset-Liabilities Management and
Financial Advisory).
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Financing PPP in Intesa Sanpaolo Group
Product Offering
ADVISORY
ARRANGING
FINANCING
DEAL CLOSURE

• STRATEGIC
• INDUSTRIAL
• Market entry strategy
• Regulation and tariff advice
• Commercial negotiation
• Price and value analysis
• FINANCIAL
• Financial modelling
• Contractual Structures
• Funding options
• Risk sharing and mitigation

• Project financing
• Bond financing
• Stand alone
• Acquisition / Bridge financing
• Bridge to capital market financing
• Term debt
• Underwriting debt

• Review tender documentation
• Funding strategy
• Senior debt
• Leasing
• Bonds
• Equity
• Security Structure

• Documentation
• Leading / managing the due diligence process
• Legal
• Technical
• Insurance
• Modelling
• Hedging
• Syndication

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Financing PPP in Intesa Sanpaolo Group
Clients
PROJECT COMPANIES
PUBLIC SECTOR COMPANIES
PUBLIC ADMINISTRATION
CONTRACTORS

• State
• Government Departments
• Central government authorities
• Regional and Local authorities
• Social security and insurance entities
• State and local service-providing entities
  (research, health, housing, culture, education,
  etc)

• Utilities (gas, water, Transport,
  renewables)
• Companies in which the State is a majority and/or
  controlling shareholder
• Companies controlled by Regional or Local
  authorities

• Public and Private concessionaires of public
  services
• Special purpose vehicles
• Public-Private Partnerships
• Consortia of concession bidders

• Private Sector Contractors
• Construction Companies

Our customers are based both in Italy and
overseas and include
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Financing PPP in Intesa Sanpaolo Group

• Public Infrastructure Finance in
• Intesa Sanpaolo
• 2. Public Private Partnership
• 3. Project Finance
• 4. Case studies

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Public Private Partnership vs. Project Finance
Financing PPP in Intesa Sanpaolo Group
Public Private Partnership (PPP) is a partnership
between the public and private sector for the
purpose of delivering a project or service

• Project Finance (PF) is a financial technique
  suitable to finance a project or service
  developed as a PPP

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PPP The Italian Procedure to Select a
Concessionaire - the Private Initiative
(D.lgs. 163/2006 art. 153)
Financing PPP in Intesa Sanpaolo Group
Authorities Planning
Private parties submit their Proposal
Selection of the best proposal
Authorities make their Planning over a 3-year
period
Tender
Tuning of the Project Documents
Tender on the basis of the Promotores
Proposal
Selection of the Infrastructures to be build
Business Plan
Selection of the PROMOTORE
Public Tender to select the Promotore
Grant of the Concession
Concession Agreement (DRAFT)
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Financing PPP in Intesa Sanpaolo Group
PPP The Italian Procedure to Select a
Concessionaire - the Public Initiative
(D.lgs. 163/2006 art. 143)
Public Tender
After the selection of the bidder
Authorities prepare all the Project Documents
Public Tender on the basis of the Project
Documents
Due Diligence
Risk Analysis
Legal
Financing
Technical
Business Planl
OM
EPC
Insurance
Design and Concession Agreement
Financial Contracts
Others
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Financing PPP in Intesa Sanpaolo Group
The PPP market in Italy in 2006 (1/3)
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Financing PPP in Intesa Sanpaolo Group
The PPP market in Italy in 2006 (2/3)
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Financing PPP in Intesa Sanpaolo Group
The PPP market in Italy in 2006 (3/3)
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Financing PPP in Intesa Sanpaolo Group

• Public Infrastructure Finance in
• Intesa Sanpaolo
• 2. Public Private Partnership
• 3. Project Finance
• 4. Case studies

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Financing PPP in Intesa Sanpaolo Group
The Bankability
Bankability is, as it sounds, the acceptability
or otherwise of a projects structure as the
basis of a project financing. Bankability is an
art, not a science. It is a very fluid concept,
changing rapidly as market practice and sentiment
change. It can also be a very deal-specific
concept what is an acceptable balance of risks
for one project may not be acceptable for another
project with slightly different strengths and
weaknesses (Graham D. Vinter)
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Financing PPP in Intesa Sanpaolo Group
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Financing PPP in Intesa Sanpaolo Group
Main Commercial Contracts in a Project Financing

• Concession Agreement
• Construction Contract
• OM Contract

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Financing PPP in Intesa Sanpaolo Group
Main Financial Contracts in a Project Financing

• Facility Agreement
• Equity Contribution Agreement
• Security Agreements
• Accounts Agreement
• Intercreditor Agreement

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Financing PPP in Intesa Sanpaolo Group
III.3
Risk Allocation Matrix
Operator
Constructor
SPV
Banks
Grantor
Insurer
Change in Law
x
Construction Risk
x
x
Commercial Risk
x
Technological Risk
x
x
Authorisation Risk
x
x
x
Financial Risk
x
x
Country Risk
x
x
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Financing PPP in Intesa Sanpaolo Group
The Due Diligence Process

• Technical aimed at evaluating the overall
  project risk framework, including design,
  construction delivery, capital expenditure,
  operation and maintenance, contractual framework,
  environmental matters and electricity sales and
  assessing and commenting the risk implications
  for the Lenders and the Project as a whole
• Legal aimed at reviewing the Projects documents
  and the legaltax framework, drafting and
  negotiating the financing and security documents,
  assisting to closing formalities, assessing and
  commenting the risk implications for the Lenders
  and the Project as a whole
• Insurance aimed at defining the proper insurance
  package for the project.

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Financing PPP in Intesa Sanpaolo Group
The Concession Agreement Main Clauses from the
Bankability point of view

• Financial Re-equilibrium procedure
• Banks Step-in right in the Project Documents in
  case of Concessionaire Default
• Indemnities in case of Termination of the
  Concession Contract for Grantor/Concessionaire
  Default (Termination Payment)

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Financing PPP in Intesa Sanpaolo Group

• Small Is Really Beautiful?
• Three issues about the Project Size
• Is it possible to Simplify the Contractual
  Structure?
• Are Due Diligences still necessary?
• Can Costs be afforded?

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Financing PPP in Intesa Sanpaolo Group

• Public Infrastructure Finance in
• Intesa Sanpaolo
• 2. Public Private Partnership
• 3. Project Finance
• 4. Case studies

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Financing PPP in Intesa Sanpaolo Group
A New Bologna Municipality Headquarter (Italy)
DUC Bologna spa Financial Close 2004

• Project financing for the funding of the Design,
  Build, Operate and Transfer of the New Bologna
  Municipality Headquarter under a PPP
• DUC Bologna (the Concessionaire) is a special
  vehicle company (or the Project Company)
  established for the purpose of implementing the
  project by the consortium members who won the
  bidding process. It signed a 30 years Concession
  Agreement
• Total innvestment cost of around 100 mln
  (including construction costs of around 70
  mln).
• The Cocessionaire enter into a Construction
  Agreement with a Contractor on a lump sum, fixed
  price basis and into an Operating Agreement with
  the Operator for the facility management
  services.
• The Municipality of Bologna will pay a fee to the
  Concessionaire for the entire life of the
  Concession allowing the Concessionaire to repay
  the debt and to payout dividends to the project
  companys shareholders.

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Financing PPP in Intesa Sanpaolo Group
DUC Bologna s.p.a. New Building of Municipality
of Bologna (Italy)
Project Structure
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Frullo Energia e Ambiente Srl - Waste to Energy
Project in Granarolo dellEmilia (Bo)
Project Structure
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Financing PPP in Intesa Sanpaolo Group
Banca BIIS and BOPI Infrastructure Project
Finance Via Monte di Pietà,8 20121 Milano
Maurizio Pagani Executive Director
Infrastructure and Project
Finance Phone [phone] Fax 39 02
87962500 maurizio.pagani_at_biis.it

BIIS Viale Monte di Pieta 8 20121 Milano
BIIS Viale Monte di Pieta 8 20121 Milano
BOPI Viale dellArte, 21 00144 Roma
Carlo Bongianni Infrastructure and Project
Finance Phone [phone] Fax 39 02
87963689 carlo.bongianni_at_biis.it
Filippo Granara Infrastructure and Project
Finance Phone [phone] Fax 39 06
59593665 filippo.granara_at_bancaopi.it
Giancarlo Carnelli Infrastructure and Project
Finance Phone [phone] Fax 39 02
87962080 giancarlo.carnelli_at_biis.it