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We have started to track a subsection of OBOR projects,
worth a total of >250B USD
Contract Value of Projects by Region Representative
in PwC OBOR Database Sample Projects
In billion USD
Southeast Asia 55.7 • China-Thailand Railway by CRCC, a 23 billion USD project that goes across major SEA
countries to Singapore
South Asia 22.6 • Nuclear power plant in Pakistan by CNNC, a 9.6 billion USD project as ~25% of
total one-belt-one-road contracts package with Pakistan
Total 257.0
*Projects are collected from publicly available sources with a focus on projects contracted after the announcement of one-belt-one-road strategy
Source: literal search, Strategy& analysis
Commonwealth of the
There are 65 countries along One Belt One Road,
which includes: Independent States (11)
• Kazakhstan
• Uzbekistan
• Ukraine
Middle East Europe (16) • Kyrgyzstan etc.
• Poland
• Romania
• Czech Republic
•
•
Bulgarian
Lithuania
Russia
• Slovenia etc. Mongolia
China
85% 8,480 Other funding sources • Total asset of CDB; other funders such as
ExIm Bank has similar level of assets
• Only small part will be used on OBOR
15% 1,600 (accumulated) CDB total assets
• CDB tracked 60+ potential OBOR projects
worth up to $89B – but not all will be realized
Total Chinese State • Realized via a myriad of instruments / funds
10% ~1,000 (accumulated)
OBOR Finance1
Chinese
• Planned funding at $40B, of which Phase I of state
$10B is committed from CIC, CDB, ExIm.
0.4% 40 Silk Road Fund funding
4
1 4 • CHINA HARBOUR ENGINEERING
COMPANY signed a $ 45 million
contract with Nigeria to reconstruct
Warri harbor in 2013
Kazakstan
Uzbekstan
Ukraine
Iran
Indonesia
Thailand
Laos
Pakistan
Romania
Poland
Saudi Arabia
Egypt
Turkey
Kenya
Nigeria
Angola
Public debt, in billion USD Public debt, in % of GDP
$0
Kuwait Russia Venezuela
$47.1 $78 $89
BRENT CRUDE
06/2016: ~$60 Countries whose fiscal breakeven prices are below market price
would run a fiscal budget deficit
Note: The breakeven price of oil is calculated from variables including oil production costs, population size, domestic demand for petroleum products, export percentage,
royalties and taxes, exchange rates, non-oil revenue and fiscal expenses
Source: US EIA, IMF, national statistics, public sources, Strategy& analysis
Strategy& Confidential property Date here Prepared for client 6
PPP Overseas Fiscal_vSend for UN Portion.pptx
Case study: Russia
Source: central banks, State Administration of Foreign Exchange, literal search, Strategy& analysis
~135
221
58 227 -276
Annualized
2015-2020
infrastructure
demand: 97B
200
-49
2013 Revenue Fall in oil price Int’l Sanction, 2015 Revenue 2015 2015 fiscal deficit
Exchange Expenditure
losses, etc. (~3-5% of GDP)
Note: Assumes USD : Russian Rubles is 1:55.5 in 2015, and 1: 31 in 2013; calculation excludes state-level budgets.
Source: Russian Ministry of Finance, Strategy& analysis
Strategy& Confidential property Date here Prepared for client 8
PPP Overseas Fiscal_vSend for UN Portion.pptx
Case study: Russia
100%
62.7% Planned
Railway transport 48% 24% By contract value 23% 28% 49% 325
969 billion
13% By # of projects 41% 41% 18%
USD
By contract By # of By
value projects completion High Concentration of Infrastructure Projects
status Medium Concentration of Infrastructure Projects
Low Concentration of Infrastructure Projects
Source: Oxford Economics, literal search, Strategy& analysis
-7.0%
2008 2009 2010 2011 2012 2014
Crude oil Crude oil 2012 2013 2014 2015F 2016F
New est. by
price 97 62 80 111 112 96 price 112 104 96 53 57 World Bank
(USD/barrel) (USD/barrel)
Source: World bank, Nigeria Central Bank, Oxford economics database, literal search, Strategy& analysis
• Build 200 000 new base stations at USD 250,000 per base station
300 ICT • Build sufficient fibre backbone to support broadband roll out at USD 50
000/km of fibre
• Build 1 million on houses per annum for the nest 30 years at USD 10,000
300 Housing per house
Total 25 Energy 8
Transport 7
ICT 5 AWM 3
9%
35% 3 2 42%
90% 9% 47%
2 2 10% 91%
65% 91% 58%
52% 62% 38% 95% 5% 53%
Sponsors
PT PLN
State owned- J-Power
Electricity Utility J-Power Itochu Adaro
PT PLN
34% 32% 34%
State owned-
Agreement to make sure power
procurement from PLN to BPI
EPC Itochu
25 years of power Ownership Electricity Utility
contract
procurement
Project Company
Bhimasena
Power Fuel supply
Contract
Indonesia (BPI) Adaro Transfer contract of
JV of J-Power, the whole Power
Guarantee of power Adaro Power, Itochu Plant
procurement from PLN Operation &
Maintenance
Loan agreements Contract
Indonesia
Infrastructure Financer
Guarantee BPI
Legend:
Fund Agreements Entities
By Indonesia Gov.
and World Bank JBIC IFC
Contract relationship
Financers
34%
Ownership
J-Power
Electricity
power
32% procurement,
Ownership for 25 years BPI
Itochu
EPC contract
The Project Company
of 4~5 billion USD
Transfer of core
asset (the central
Java power plant)
to Indonesia Gov.,
Fuel coal supply contract
25 years later
for 25 years Bhimasena Power Indonesia
100% Ownership
Indonesia
Government
Core Asset
Legend:
34%
Central Java Project company Other entities
Ownership
Power Plant
Cash Cash
Adaro payer receiver
At current stage, the major financers are JBIC but BPI still
need to find other financers
Financing model of the CJPP
Legend:
Cash payer Cash receiver
Project
2012.10 • Original plan for beginning of construction was drafted
Plan
Project • Bhimasena Power Indonesia announced that construction would be delayed at least
2013.10 two years due to environmental assessments, local opposition
Delay
• The major difficulty lies in land acquisition
• Bhimasena Power Indonesia declares force majeure, a legal clause that allows
companies to walk away from contracts soured by external events
Force
2014.6 • Only 85% of land has been acquired
Majeure
• Indonesia Gov. invoked the law for this project that land could be acquired for public
interest
• Planed commercial start The Central Java Power Plant is originally in 2016
Project
2016~2019 • Due to delay in land acquisition, the estimated commercial start at 100% capacity is
Complete
2019
Source: literal search, Strategy& analysis
1.0%
Legend:
0.5% 5 years of maturity 10 years of maturity 3 years of maturity In US capital market
30 years of maturity 7 years of maturity 12 years of maturity In European capital market
0.0%
2013.01 2013.03 2013.05 2013.07 2013.09 2013.11 2014.01 2014.03 2014.05 2014.07 2014.09 2014.11 2015.01 2015.03
“For China, bonds issued in European capital market are expected to grow from <5% of total oversea
bonds issued, to 10%~15% in 2015, almost tripled from previous years”
-Interviewed financial industry expert
Description
• Domestic
Guaranty
company with
100% Own ~500 million RMB Rating agencies Moody (rated at A3), S&P
assets (2)
Global HSBC, Standard Chartered
Haixing coordinators (2)
Company (BVI) • Actual issuer
(the SPV for the project) The joint HSBC, Standard Chartered,
bookrunners, and Bank of Communications
Issue Debt lead agencies (5) (HK), China Construction
Bank Internationa, Bank of
China (Shanghai)
Loaners
Sources: Expert interviews, Strategy& analysis
Contact
Email: joshua.yau@strategyand.pwc.com
Phone: +86 13910825448