Global Trade Review (GTR) https://www.gtreview.com Trade finance news, publications and events Fri, 14 Dec 2018 11:47:36 +0000 en-US hourly 1 GAC hires Euler Hermes underwriting head to lead new special risk division https://www.gtreview.com/news/on-the-move/gac-hires-euler-hermes-underwriting-head-to-lead-new-special-risk-division/ https://www.gtreview.com/news/on-the-move/gac-hires-euler-hermes-underwriting-head-to-lead-new-special-risk-division/#respond Thu, 13 Dec 2018 11:38:27 +0000 https://www.gtreview.com/?p=80051 Commodity and agribusiness trade credit specialist Groupama Assurance-Credit & Caution (GAC) has opened a new special risk division, which will be led by new hire, Valerie Talbot. Her remit will include providing single risk, excess of loss and top-up solutions. Based in Paris, Talbot has more than 20 years’ experience in single risk, structured credit and ...

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Commodity and agribusiness trade credit specialist Groupama Assurance-Credit & Caution (GAC) has opened a new special risk division, which will be led by new hire, Valerie Talbot. Her remit will include providing single risk, excess of loss and top-up solutions.

Based in Paris, Talbot has more than 20 years’ experience in single risk, structured credit and political risk insurance. Starting her career with Unistrat Coface in Paris before moving to New York, she then went on to Credendo (Garant) where she spearheaded the single risk activity in Geneva. Her most recent role was head of commercial underwriting in London for Euler Hermes’ transactional cover unit.

Speaking to GTR about her appointment, Talbot says: “GAC writes whole-turnover trade credit business in all sectors but is particularly focused on commodity and agribusiness. We’ve seen more and more demand to cover the portfolio of buyers and single transactions as well, particularly for commodity traders.”

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R3’s KYC blockchain app completes fourth trial, but will remain a prototype https://www.gtreview.com/news/fintech/r3s-kyc-blockchain-app-completes-fourth-trial-but-will-remain-a-prototype/ https://www.gtreview.com/news/fintech/r3s-kyc-blockchain-app-completes-fourth-trial-but-will-remain-a-prototype/#respond Wed, 12 Dec 2018 16:32:40 +0000 https://www.gtreview.com/?p=80044 Five French banks and 21 firms, together with blockchain firm R3, have completed a fourth trial of the CordaKYC blockchain application for sharing know your customer (KYC) data. But R3 now reveals it does not intend to bring the solution to market. CordaKYC is a prototype designed and built by IT and consulting company Synechron ...

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Five French banks and 21 firms, together with blockchain firm R3, have completed a fourth trial of the CordaKYC blockchain application for sharing know your customer (KYC) data. But R3 now reveals it does not intend to bring the solution to market.

CordaKYC is a prototype designed and built by IT and consulting company Synechron on R3’s Corda blockchain platform. It works as a “self-sovereign” model, where corporate customers can create and control their own identities, including relevant documentation. Banks can request access to the data, whilst customers can approve requests and revoke access. Any updates that are made become automatically visible to the banks that have permission to access the data.

The new trial is the fourth in a series of tests that have been conducted for the solution. The first were known as Leia 1 and 2, and more recently as “CordaKYC”.

A total of 26 firms participated this time around in what was a regional trial only, in which KYC requests were simulated amongst the group. Participants included AFTE, Allianz France Insurance Company, Alten, BNP Paribas, bioMérieux, Crédit Agricole CIB, Daher, Danone, Engie, Natixis, Natixis Assurances, Natixis Investment Managers, Ostrum AM, Pierre et Vacances, RCI Bank and Services and Société Générale.

The trial saw 232 updates sent to banks through Corda, with data sharing being approved 185 times between corporates and banks, according to Estelle Roiena, a senior associate at R3 and responsible for its business development for France.

Roiena tells GTR that the focus of this particular trial was on ensuring that the corporates’ experience of meeting KYC requirements through Corda was effective and aligned with their needs.

“While previous trials have been focused on KYC from the standpoint of banks, with this trial we’ve focused on how the service will work for the corporates,” she says. “The trial involved companies from across a very wide variety of industries, including department stores, pharmaceuticals, finance and even aerospace. This allows us to demonstrate to corporates how KYC on Corda can be responsive to the challenges of any industry and helps companies to feel confident in the process to ensure the solution is fit for the needs of all businesses.”

She adds that France was an “ideal country” for such a regional trial, given that enterprise blockchain activity in France is “accelerating”.

While R3 describes the trial as a “big step forward in making blockchain-based KYC a common reality for corporate banking”, it says the CordaKYC application is “not a product in its own right” and the goal is not to take the solution to market.

Instead, the aim is to “demonstrate the benefits” of running KYC through the blockchain for both corporates and banks, explains Abbas Ali, director of partner solutions at R3.

“Our plan has always been to develop the ‘operating system’ on which other firms will build applications to tackle enterprise challenges,” he says. “By helping the community develop a greater understanding of how KYC applications on Corda operate, we are able to support the wider ecosystem and share our learnings with partners developing applications for end users.”

 

Blockchain’s perfect use case?

A number of KYC applications are already live on Corda, including Tradle and Gemalto Trust ID Network, with other firms, such as Norbloc, currently in the process of implementing similar solutions on the platform.

What they all have in common is that they see blockchain as a route to making KYC– a task that is mired by time-consuming and labour-intensive manual processes and the duplication of efforts – more efficient. The figures speak for themselves: some major financial institutions spend up to US$500mn annually on KYC and customer due diligence, according to Thomson Reuters. And the amount of time dedicated to KYC efforts is growing: Thomson Reuters’ 2017 survey found that the average corporation spends 26 days a year providing KYC regulatory information, up from 23 days in 2016.

In contrast to centralised solutions that currently exist in the market, such as Swift’s KYC Registry and IHS Markit’s KYC.com, blockchain technology eliminates third-party data aggregators and centralised repositories of data. Instead, it utilises the power of the distributed, immutable ledger to drive greater operational efficiency through a digital process flow and a streamlined way to access real-time up-to-date customer data.

Founded in 2014 in New York, Tradle’s solution caters to a broad range of sectors, including trade finance. Speaking to GTR for its recent Fintech Issue, Gene Vayngrib, CEO and co-founder of Tradle, said he is convinced that a decentralised model can make the trade finance sector more agile and significantly speed up the time it takes to set up a deal.

The main goal, he added, is to help banks turn compliance pain into a commercial advantage for the banks, which can then serve their customers better.

“The majority of the conversation in trade finance is that KYC is such a pain and that it’s stopping business,” he explained. “The way we approach it is: it’s a commercial advantage. The information is sitting in a silo and we are taking it out of the silo and making it available for commercial business. Now two companies that are KYC’d by different banks can engage in trade much faster.”

Meanwhile, the idea of a blockchain-based KYC solution has been met with cautious interest from established players. For one, Bart Claeys, Swift’s head of the KYC registry, recently told GTR that KYC “seems like the perfect use case for distributed ledger technology”, but argued that it doesn’t yet solve the real issues faced by banks today. Swift itself has helped banks tackle the burden of KYC since it launched its KYC Registry in 2015. Of Swift’s 11,000 members, 7,000 have correspondent banking activities and are therefore the target of the registry. Around 5,000 have joined the centralised, non-blockchain-based solution thus far.

The challenge, Claeys said, is that blockchain initiatives have thus far been driven mainly by technology rather than compliance. “For us, at this stage, I haven’t yet seen the value addition of the distributed ledger technology related initiatives compared to what we have in our centralised solution,” he says, bringing up a widely expressed scepticism in the industry: can technology alone get banks onboard and make them want to work together towards better KYC?

“In my view, a lot of these initiatives have been initiated from a technology perspective, yet today little has been said around the level of acceptance from a compliance perspective within the banks. Ultimately, be it a distributed ledger technology-based or centralised utility, you will be required to have the backing and support from the compliance side within each of the banks,” he said.

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EBRD’s growing focus on SEMED: “Economic reform enables us to invest more” https://www.gtreview.com/news/mena/ebrds-growing-focus-on-semed-economic-reform-enables-us-to-invest-more/ https://www.gtreview.com/news/mena/ebrds-growing-focus-on-semed-economic-reform-enables-us-to-invest-more/#respond Wed, 12 Dec 2018 16:18:35 +0000 https://www.gtreview.com/?p=80042 The Southern and Eastern Mediterranean (SEMED) region is now the biggest region of operation for the European Bank for Reconstruction and Development (EBRD). Founded in 1991 after the collapse of the Soviet Union, the development bank initially focused on the nations of the former Eastern bloc, but has since expanded to support development in 39 ...

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The Southern and Eastern Mediterranean (SEMED) region is now the biggest region of operation for the European Bank for Reconstruction and Development (EBRD).

Founded in 1991 after the collapse of the Soviet Union, the development bank initially focused on the nations of the former Eastern bloc, but has since expanded to support development in 39 countries, from central Europe to central Asia.

Since entering SEMED – initially being Egypt, Jordan, Morocco and Tunisia – in 2012 in the aftermath of the Arab Spring, the bank has invested over €7.8bn in 179 projects in the region – ranging from wind farm developments in Morocco to supporting dairy producers in Egypt.

2018 has seen the EBRD expand to Lebanon and the West Bank, under the leadership of Janet Heckman, who took on the role of managing director for the SEMED region in February 2017.

GTR met with Heckman in Cairo recently to speak to her about her focus areas and further expansion plans for 2019.

 

GTR: SEMED is now the largest region of operation for the EBRD. Why has it received such a big focus?

Heckman: That’s correct. Last year SEMED was the largest; we did roughly €2.2bn of investments in what was then four countries we invested in: Egypt, Jordan, Morocco and Tunisia. Egypt was the biggest at €1.4bn. As a country, this investment from the EBRD was second only to Turkey last year, so very significant. This year it’s also looking like a very strong year, so we expect numbers to be in the same range.

I think it’s because there has been a lot of economic reform taking place in the region. Particularly here in Egypt, for the last two and a half years you’ve seen a very strong reform programme, removal of subsidies in key areas, key investment acts being passed, bankruptcy and company laws, etc. When you have that type of reform, it enables us to invest more in a country because we believe the future of that country is strong.

Another example is Tunisia, where in July we spearheaded a mission with the EU, the IFC and the African Development Bank to encourage Tunisians to continue on the reform path, and take the steps needed to ensure that the country is economically viable.

One of the things I am proudest of this year has been that we were able to begin work in Lebanon and the West Bank. These are two areas where you really need trade facilitation lines, because of the perceived political risk in the region. It doesn’t just benefit the local banks; it really helps to open up the economy as a whole. It’s quite gratifying to see this.

 

GTR: Are there any specific programmes or projects you are particularly focused on at the moment?

Heckman: We have a very strong programme in value chain development. Let me give you the example of Morocco – the country has really geared up for export and is now amongst one of the major centres globally for automotive components production as well as for aerospace components. The country put in the place the necessary infrastructure: the roads, the high-speed train, the Tangier-Med port and introduced proper incentives to attract multinationals to produce.

Where we became active is in helping to finance local supply chain development. We’re working with the major multinational companies as well as the local companies who are investing, to help identify what type of supplies they can source locally. We then work with the local companies in the market to train them and bring them up the value chain. This is something we’re replicating throughout SEMED. We call it value chain financing, which is absolutely critical, because if a company can produce to the standard of global major companies like Ikea or Renault, then they are capable of producing under their own names in the local market.

We also have a really great programme called advice for small business. It is funded by the EU throughout all of the SEMED countries, and we launched it in Lebanon in October. So far, we’ve advised more than 2,200 SMEs in the region. It includes advice on how to target export markets and tender for projects, as well as technical advice on how to gear your product for export markets. In that way we help small and medium-sized businesses with either local or international advisory services. This is absolutely critical.

As part of this, we also have specific programmes geared towards women-owned SMEs. We work through the banks – it’s a combined programme – to provide financing to SMEs owned and operated by women. We help to train the banks, the credit departments, etc, on what the key factors for lending to women-owned businesses are, and then provide the technical advisory and mentoring to female entrepreneurs. We recently launched the programme in Morocco, in conjunction with the ministry of women and family.

 

GTR: What are the EBRD’s SEMED expansion plans?

Heckman: Right now, our main plan is to expand within the countries where we are already operating, to do more in those countries. For example, in Egypt, we hope to open a third office this year. We’d like to do more in the regions of Egypt, namely outside of just Alexandria or Cairo, because those are the areas that need the most development. The same goes for Morocco: we opened our second office in Tangier, which covers the northern part of the country, and we hope to get approval to open later this year in the southern part of Morocco too, out of Agadir, where there’s a lot of agribusiness and a need for regional connectivity.

When the time is right, we’ll also take into consideration other countries. Libya and Syria are both within our domain. I would personally love to be in Algeria – I worked there for four years with Citi, but we have to see after the elections what the political will is. Libya is another country that I could see the EBRD working in.

 

GTR: You mentioned earlier the EBRD’s expansion this year to Lebanon – what opportunities do you see in the country?

Heckman: The Lebanese are extremely entrepreneurial, so naturally there are a lot of private sector opportunities. Initially, as we often do when we enter countries, we started with financial institutions, and we took an equity stake in Bank Audi. But then we’ve also signed trade facilitation lines and SME lending lines with other banks in the country.

But the real opportunity is with private sector entrepreneurs and family groups in Lebanon.

 

GTR: Sub-Saharan Africa doesn’t fall under your domain, but with a growing focus on intra-African trade, does your work go beyond SEMED?

Heckman: What we’ve noticed is that quite a lot of the companies we work with in North Africa, but also even in Lebanon and Jordan, are investing in Sub-Saharan Africa.

Morocco is a key example of this. Attijariwafa Bank is present across Africa, and the corporates and companies have followed the Moroccan banking system, predominantly into the Ivory Coast, Senegal and Francophone Africa, because they see huge opportunities for growth. The EBRD has been involved in two events this year, working with our companies who are active in Sub-Sahara. One was the Africa Investment Forum in Johannesburg, and the other the Africa 2018 Forum in Sharm El-Sheikh. So we’re looking at how we can invest in companies which want to invest further in Sub-Sahara.

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essDocs to launch blockchain solution in early 2019 https://www.gtreview.com/news/fintech/80046/ https://www.gtreview.com/news/fintech/80046/#respond Wed, 12 Dec 2018 16:16:23 +0000 https://www.gtreview.com/?p=80046 Paperless trade platform provider essDocs will launch a series of blockchain-based trade solutions, having entered a strategic partnership with Swisscom Blockchain. Founded in 2005, essDocs already offers a range of non-blockchain solutions to digitise trade finance and logistics documents, including the bill of lading. Swisscom Blockchain, meanwhile, is a blockchain advisory that helps companies design, ...

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Paperless trade platform provider essDocs will launch a series of blockchain-based trade solutions, having entered a strategic partnership with Swisscom Blockchain.

Founded in 2005, essDocs already offers a range of non-blockchain solutions to digitise trade finance and logistics documents, including the bill of lading. Swisscom Blockchain, meanwhile, is a blockchain advisory that helps companies design, build and implement distributed ledger applications. It was established last year.

In a statement, essDocs says the two companies will “leverage their respective resources and expertise to enable companies to digitise their trade and trade finance processes swiftly, efficiently and with minimal friction”.

The parties have already started testing their first collaborative product, which will officially launch in Q1 2019.

essDocs CEO Alexander Goulandris says the firms will offer “value-adding blockchain solutions” such as traceability, cross-platform connectivity and solution-data distribution.

“Our joint solutions will first and foremost focus on transition technology, bridging data ‘gaps’, paper-based processes and technological silos with the end goal of secure, automated digital trade,” he says.

Also commenting on the partnership, Daniel Haudenschild, CEO of Swisscom Blockchain, hints that blockchain technology will enable them to tackle the challenge of mass adoption that digitalisation efforts in the trade industry have historically faced.

“Along the journey, both our companies will support a use-focused approach in order to unleash the true potential blockchain and digitalisation has to offer to the trade, trade finance and logistics community,” he adds.

The partnership marks essDocs’ official foray into blockchain, a technology widely explored by other trade finance tech firms and banking consortia. Bolero, its much older competitor founded in 1998, has been working with blockchain firm R3 for more than a year to give its electronic bill of lading service a blockchain upgrade. This has evolved into Bolero taking part in a number of pilots of the Voltron platform, a blockchain project run by R3 and eight global banks to ease the exchange of trade finance documentation.

In November, for example, Bolero’s electronic bills of lading solution was used in a Voltron-based trade transaction involving HSBC, ING, Reliance Industries and Tricon Energy. The integration enabled the digital transfer of title of goods on the blockchain.

At the time, essDocs was mentioned as another electronic document provider that could be incorporated with the Voltron platform.

Chris Sunderman, blockchain initiative lead for trade finance services at ING, told GTR: “When you look at the trade ecosystem, the world is large, and companies do not per se work with one provider of e-documents; there are also companies like essDocs and eTitle. So within project Voltron, the banks agreed to investigate and analyse the application of other solutions as well. We need to incorporate other solutions to make the lives of our clients as easy as possible.” He also confirmed that the consortium is currently in discussions with essDocs, which is interested in working with them.

The moves by Bolero and essDocs to build blockchain solutions come as the competition in this space is heating up, with a range of other tech firms and consortia seeing trade documentation as an obvious home for the new technology. The nature of blockchain, being a decentralised technology, makes it ideal for the trade industry, as it allows multiple parties to exchange information in real time, while securely being able to track and transfer assets.

One of the first firms to make headlines for its blockchain-based trade documentation solution is Israeli startup Wave. In 2016, it completed what became known as the world’s first live blockchain trade transaction with Barclays and is now working towards releasing a commercial bill of lading solution.

This was followed by the foundation of Slovenia-based blockchain firm CargoX, which raised over US$7mn in an ICO in late January. Last month, the firm announced that its blockchain-based bill of lading platform is now commercially available, having spent the second half of 2018 conducting pilots with a number of logistics providers.

Meanwhile, Maersk is working with IBM to build and expand TradeLens, a blockchain platform that enables users in the shipping ecosystem to interact efficiently, access real-time shipping data and digitalise and exchange trade documentation. Already, more than 92 organisations are participating in the platform’s early adopter programme.

And more recently, some of the world’s top container lines and terminal operators formed a consortium, Global Shipping Business Network (GSBN), again with the same goal: to develop a new blockchain-based platform for the global trade ecosystem.

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Africa’s floating LNG projects set to disrupt global gas trade https://www.gtreview.com/news/africa/africas-floating-lng-projects-set-to-disrupt-global-gas-trade/ https://www.gtreview.com/news/africa/africas-floating-lng-projects-set-to-disrupt-global-gas-trade/#respond Wed, 12 Dec 2018 15:37:17 +0000 https://www.gtreview.com/?p=80040  The imminent final investment decision of Kosmos Energy and BP’s Tortue offshore floating liquefied natural gas (FLNG) project in the waters of Mauritania and Senegal underscores an important shift in Africa’s LNG ambitions. The project, which is targeting first gas from its floating vessel in 2022, suggests that Africa’s growing exports of natural gas won’t ...

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 The imminent final investment decision of Kosmos Energy and BP’s Tortue offshore floating liquefied natural gas (FLNG) project in the waters of Mauritania and Senegal underscores an important shift in Africa’s LNG ambitions.

The project, which is targeting first gas from its floating vessel in 2022, suggests that Africa’s growing exports of natural gas won’t come from vast land-based LNG sites where most of the interest has focused in recent years. Instead, new FLNG vessels are set to anchor offshore to liquify natural gas on site for shipment directly to markets in a trend set to reverse Africa’s declining LNG exports – and disrupt global LNG trade.

Although the FLNG liquefaction concept of converting gas from offshore fields into LNG has been around for decades, there are only a handful of units operational or commissioned in the world. At present Africa leads the way, with Cameroon blazing a trail for the continent. FLNG vessel Hilli Episeyo, moored 14km off the southern port city of Kribi, exported its inaugural cargo last May in what was also a pioneering proof of concept since Hilli is the first conversion of an LNG tanker into an FLNG vessel.

Elsewhere on the continent, at the end of last year Eni signed off its US$4.7bn Coral South offshore project in Mozambique, with its FLNG production vessel coming on stream in 2021. Coral South is important because it is Africa’s first project-financed FLNG project, and is backed by a consortium of 15 international banks and five export credit agencies (ECAs). “It is likely to be the template for much of future Mozambique LNG documentation,” says Paul Eardley-Taylor, head of oil and gas, Southern Africa, at Standard Bank in Johannesburg, who sees advantages for FLNG in West Africa particularly. “Water depths and sea conditions are moderate and geographical locations favour Latin American and European markets,” he tells GTR.

In its favour, FLNG is cheaper than the cost of building pipelines and onshore liquefaction facilities. Golar LNG, the company behind the Hilli conversion, said its refit cost US$1.2bn, coming in US$70mn under budget. “It can cost billions to develop a land-based facility. But taking an old LNG vehicle and converting it by adding regasification equipment costs a fraction of the price,” says Thomas Moore, a partner in Mayer Brown’s Houston office. It’s a point shared in a recent report from Energy Futures Initiative (EFI) entitled Investing in natural gas for Africans: doing good and doing well, which notes “significant cost reductions [and] offtake discussions” in FLNG projects.

But FLNG’s appeal is not cost alone. The technology also makes Africa’s small-scale projects viable. Small-scale production cannot serve giant utilities in Japan or South Korea, but it can serve individual or smaller groups of power plants that suit more intermittent and flexible supply, or traders rather than end-users. Power plants switching to renewables which still need back-up generation are one example, says Moore. Small-scale production also has other advantages in the oversupplied LNG market. Smaller plants could help keep costs down, and having the cheapest gas will help win customers, he says.

FLNG also offers an alternative to Africa’s onshore LNG projects which have struggled to secure the long-term off-take agreements with utilities needed to attract finance. Lengthy contracts are key to financing projects because ECAs, banks and other financiers want security for the large, upfront funds they provide, yet getting those contracts for African producers has proved a challenge.

It is also faster to develop FLNG than onshore LNG: Coral South is running at least 12 months ahead of Mozambique’s onshore project, which isn’t expected to achieve final investment decision until 2019, says Standard Bank’s Eardley-Taylor.

Although the bulk of production is destined for export, FLNG also has important implications for Africa’s undeveloped power sector. Despite the continent’s abundant natural gas reserves, few countries can transport gas over long distances and the lack of grid infrastructure and pipelines has resulted in localised power generation. “Natural gas infrastructure in Sub-Saharan Africa is sparse. The absence of a large regional market can lead to investment uncertainty and cause financing difficulties,” notes the EFI report. Yet FLNG offers another way to transport LNG into localised markets where power demand is strongest. “You could locate the vessels near port cities close to electricity demand,” says Moore.

Nevertheless, there are downsides to this new development. Offshore facilities don’t bring the value add that comes with onshore sites, such as key infrastructure investment and spin-off manufacturing in fertiliser and petrochemical industries. It is also critical to find the right partners and sponsors who can bring project know-how and facilitate FLNG financing. “The technology is relatively new, so for new vessels financings will likely require sponsors to provide conventional completion support. For refurbished vessels, we would envisage sponsors are more likely to on-balance sheet completion risks rather than involve external lenders with high due diligence requirements,” says Eardley. But the idea that this could be a solution for Africa’s LNG exports is catching on. “This is really exciting for Africa,” concludes Moore.

 

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Peru closes largest-ever ECA financing for state energy company https://www.gtreview.com/news/americas/peru-closes-largest-ever-eca-financing-for-state-energy-company/ https://www.gtreview.com/news/americas/peru-closes-largest-ever-eca-financing-for-state-energy-company/#respond Wed, 12 Dec 2018 08:55:54 +0000 https://www.gtreview.com/?p=80035 State-owned petroleum company Petroperú has closed a US$1.3bn export credit agency-backed financing as part of its US$5bn Talara refinery modernisation project. Deutsche Bank acted as facility agent for the syndicate, which also involves BBVA, BNP Paribas, Citi, HSBC, JP Morgan and Santander as initial mandated lead arrangers, underwriters and bookrunners. It is the largest-ever financing ...

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State-owned petroleum company Petroperú has closed a US$1.3bn export credit agency-backed financing as part of its US$5bn Talara refinery modernisation project.

Deutsche Bank acted as facility agent for the syndicate, which also involves BBVA, BNP Paribas, Citi, HSBC, JP Morgan and Santander as initial mandated lead arrangers, underwriters and bookrunners. It is the largest-ever financing covered by the Spanish export credit agency, Cesce, and is the largest ECA financing arranged in Peru.

The financing will support an engineering, procurement and construction (EPC) contract, led by Spanish multinational engineering firm Técnicas Reunidas. Further funding for the modernisation comes from two 15-year and 30-year bond placements for a total of US$2bn carried out in June 2017. During 2019, Petroperú aims to complete the debt process to finance the project, and is widely expected to turn to the bond markets.

Speaking at the closing of the deal, Eduardo Más, director of structured trade and export finance at Deutsche Bank, says: “To conclude the largest-ever ECA deal in Peru, one of the most sophisticated financial markets in Latin America, is a significant achievement. Our proposal properly balanced risks and rewards, and required great discipline from multiple teams involved, from compliance to administration, both during the origination and execution periods.”

Works are expected to be completed in December 2020, when the facility, located in north-western Peru, will refine both light and heavy crude, increasing its margin from US$4-US$5 per barrel to US$8-US$9 per barrel.

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TDB rolls out SME programme for women-led businesses in six African countries https://www.gtreview.com/news/africa/tdb-rolls-out-sme-programme-for-women-led-businesses-in-six-african-countries/ https://www.gtreview.com/news/africa/tdb-rolls-out-sme-programme-for-women-led-businesses-in-six-african-countries/#respond Tue, 11 Dec 2018 12:07:29 +0000 https://www.gtreview.com/?p=80032 The Eastern and Southern African Trade and Development Bank (TDB) is rolling out a credit programme in six African countries to support women-led export-oriented SMEs. Among the first to benefit are Ethiopian businesses, following an agreement between TDB and Ethiopia’s Enat Bank. Under a memorandum of understanding, the two have agreed to set up a ...

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The Eastern and Southern African Trade and Development Bank (TDB) is rolling out a credit programme in six African countries to support women-led export-oriented SMEs.

Among the first to benefit are Ethiopian businesses, following an agreement between TDB and Ethiopia’s Enat Bank.

Under a memorandum of understanding, the two have agreed to set up a credit enhancement facility and work together to build a pipeline of SMEs which qualify for export credit support. Focusing on women-owned and managed businesses, the parties will run the programme in partnership with the Ethiopian Women Exporters Association.

The facility will make available loans, guarantees and capacity-building interventions, mainly within the financial services, agribusiness, mining, leather and tanning, and manufacturing sectors.

TDB and Enat Bank will also enlist a local SME advisory partner to support participating firms on export readiness requirements.

The agreement is part of a larger programme that TDB is rolling out to specialist financial institutions in its member countries. It launched its first facility in Zimbabwe in October and will be expanding it further in the coming months, starting with Burundi and Kenya, and then Zambia and Malawi. The bank has allocated US$3mn to pilot the programme over the next two years in these countries.

According to TDB president Admassu Tadesse, Enat Bank was selected as a partner for this facility because of its “unique ethos”.

The local bank is known as “the first women’s bank” in Ethiopia. It was initiated in 2013 by 11 Ethiopian women, with a 64% women ownership, and has a special focus on providing financial services to women.

“This instrument is aimed at helping Enat Bank scale up its impact, share their risk and reach out to more SMEs, particularly women-led and women-owned SMEs. We also hope that Enat will use this instrument to reach more young entrepreneurs and those companies employing youth,” Tadesse says.

According to the World Bank, Ethiopia lags behind the rest of Sub-Saharan African and other developing countries when it comes to lending to SMEs. In fact, it has reported that SME lending in the country comprises only 7% of banks’ lending portfolios.

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Australian wind project gets non-bank lender support https://www.gtreview.com/news/sustainability/australian-wind-project-gets-non-bank-lender-support/ https://www.gtreview.com/news/sustainability/australian-wind-project-gets-non-bank-lender-support/#respond Tue, 11 Dec 2018 10:10:55 +0000 https://www.gtreview.com/?p=80030 Australia’s Clean Energy Finance Corporation (CEFC) and specialist infrastructure debt investment manager Westbourne Capital have committed A$160mn to Singapore developer Nexif Energy for the second stage of a wind farm in South Australia. The first stage of the Lincoln Gap project, near Port Augusta was backed by A$190mn in funding from the CEFC and Investec ...

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Australia’s Clean Energy Finance Corporation (CEFC) and specialist infrastructure debt investment manager Westbourne Capital have committed A$160mn to Singapore developer Nexif Energy for the second stage of a wind farm in South Australia.

The first stage of the Lincoln Gap project, near Port Augusta was backed by A$190mn in funding from the CEFC and Investec in November last year.

This additional CEFC commitment of A$50mn brings the Australian government-owned green bank’s total senior debt commitment in the project to A$200mn, which it says represents its largest investment in a single wind farm development to date.

“This debt finance package sees Westbourne Capital participating as a mezzanine debt lender alongside our senior debt commitment,” says CEFC wind sector lead Andrew Gardner. “The ability to fold mezzanine debt into finance for new build wind farms in this manner creates new investment opportunities for non-bank lenders to further support the growth of the renewable energy sector.”

According to Westbourne Capital managing director David Ridley, this is his firm’s second debt investment in the Australian renewables space, and demonstrates the growing interest from institutional investors seeking to access well-structured transactions in the sector.

This financing marks the latest in a string of Australian wind projects backed by the CEFC. Gardner recently told GTR that the sector is becoming more attractive to commercial financiers due to falling costs and improvements in technology.

“On the technology side, we’ve been seeing the level and cost of wind falling in Australia. That’s a function of capital costs, upfront construction cost, but also increased turbine sizes and longer turbine lives. The turbine sizes are helping the economics of the projects.”

The project is Australia’s first greenfield wind development to feature an unsubsidised large-scale grid-connected battery, and construction of this second stage is expected to begin in early 2019. Once finished, Lincoln Gap wind farm will represent a total investment of more than A$480mn by Nexif Energy in Australia.

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Qingdao fraud probe ends with jail term https://www.gtreview.com/news/asia/qingdao-fraud-probe-ends-with-jail-term/ https://www.gtreview.com/news/asia/qingdao-fraud-probe-ends-with-jail-term/#respond Mon, 10 Dec 2018 14:20:42 +0000 https://www.gtreview.com/?p=80011 The Qingdao imbroglio has finally been brought to a close today, with a ruling by the Qingdao Intermediate People’s Court, seen by Reuters, sentencing the chairman of the company at the centre of the 2014 Chinese metal warehousing scandal to 23 years in prison. His company, Dezheng Resources, has also been ordered to pay a ...

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The Qingdao imbroglio has finally been brought to a close today, with a ruling by the Qingdao Intermediate People’s Court, seen by Reuters, sentencing the chairman of the company at the centre of the 2014 Chinese metal warehousing scandal to 23 years in prison. His company, Dezheng Resources, has also been ordered to pay a Rmb3.012bn (US$435.7mn) fine.

Chen Jihong, who founded the company in 2004, was found guilty on five counts of financial crimes spanning an 18-month period from November 2012 to May 2014. According to the court statement, his firm raised Rmb12.3bn (US$1.78bn) in funds using either fake warehouse receipts or fake certificates for aluminium ingots, alumina and refined copper at the eastern Chinese ports of Qingdao and Penglai, and raised Rmb3.6bn (US$520.8mn) in loans, letters of credit and bank acceptance bills from 13 banks by repeatedly using the same cargoes as pledged collateral.

The case, which rocked the commodity trading world, led to combined international losses thought to run in excess of US$1bn, and left Chinese banks exposed by upwards of US$3bn. While Citi and trader Mercuria were the most visible victims – eventually reaching a settlement in 2016 as they argued over who was responsible for the estimated US$270mn in potential losses stemming from the fraud – other big names including Standard Bank, Standard Chartered, HSBC, Glencore and Trafigura were also exposed.

Speaking to GTR in the wake of the drama, Linos Choo, a litigation specialist at law firm DLA Piper, said that the case had led to a surge of metal leaving Qingdao and other Chinese ports to “safe haven” destinations amid fears that fraud was more widespread than had been acknowledged previously.

This court ruling now brings the Chinese authorities’ investigation into Dezheng’s multiple warehouse receipts to a close, drawing a line under one of trade’s most infamous fraud cases, but whether lessons have – or indeed can – be learned from what happened is another story.

Anecdotal evidence from the market shows that the case led to a more conservative approach to financing. However, although the metals warehousing industry has made a push to go digital since the deception, Choo cautions that cracking down on this type of fraud is all-but impossible, given that the Qingdao scandal likely involved collusion between the Chinese metals supplier and employees of the port authority or its agents.

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UniCredit names new Asia head of transaction banking https://www.gtreview.com/news/on-the-move/unicredit-names-new-asia-head-of-transaction-banking/ https://www.gtreview.com/news/on-the-move/unicredit-names-new-asia-head-of-transaction-banking/#respond Mon, 10 Dec 2018 12:08:08 +0000 https://www.gtreview.com/?p=80005 UniCredit has appointed a new head of global transaction banking for the Asia Pacific region. Siow Chin Yeo will move from her current role as head of Asia trade finance at the bank to take up the new position on February 1. She succeeds Holger Frank, who has held the position in Hong Kong for ...

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UniCredit has appointed a new head of global transaction banking for the Asia Pacific region. Siow Chin Yeo will move from her current role as head of Asia trade finance at the bank to take up the new position on February 1.

She succeeds Holger Frank, who has held the position in Hong Kong for the past two years and will become head of the international centre at UniCredit’s commercial banking arm Unternehmer Bank in Germany.

The bank has also named Bryan Ho as Asia head of the financial institutions group (FIG), also effective on February 1. He is currently managing director and deputy head of FIG and GTB, Asia. Both he and Yeo are based in Hong Kong.

Yeo joined UniCredit in February 2015 to lead the trade finance team in terms of product development, origination, sales and secondary market activities for the region. She previously worked at Crédit Agricole, Santander, ICBC, Intesa Sanpaolo and Sumitomo Trust & Banking Company – all in Hong Kong.

In her new role she will report to Luca Corsini, UniCredit’s global head of global transaction banking, and locally to Michele Amadei, head of the Asia Pacific region.

Meanwhile, Ho will report to Jérôme Frizé, global head of FIG, and locally to Amadei.

Ho joined UniCredit in October 2017 and since then has championed new initiatives for the FIG business in the region. He previously worked at Crédit Agricole, where he was managing director, head of FIG, Greater China.

 

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