Minsk Business Meetings 2017 and new trends in the development of IIB’s relations with the CIS countries

During this year, the International Investment Bank (IIB) began to actively develop its partnerships in the area of trade finance with financial institutions form the countries of the Commonwealth of Independent States (CIS). The Bank cooperates in this area with the largest banks from the Russian Federation, the Republic of Belarus and Armenia, and also develop its activities with financial institutions from other CIS countries as its potential counterparties.

The IIB delegation presented the Bank’s Trade Finance Support Program (TFSP), which provides options how to support its member states economies in the area of export-import operations made jointly with counterparties from CIS. The presentation was made during the III International Financial and Banking Forum of the CIS member states Minsk Business Meetings, which was held in Minsk, the Republic of Belarus, on October 26-27, 2017. The head of the Trade Finance and Documentary Transactions Division, Maria Minaeva, presented the IIB as a multilateral development bank (MDB), which is actively offering a wide range of products in the area of trade finance to the banking institutions in the CIS.

The unique status of IIB as an international financial institution (IFI) turned out to be an especially interesting topic for the attendees. This comes as a consequence of the fact that the shareholders of the Bank are countries located in remote geographical regions and the particular specifications of the TFSP, which is not typical for the majority of IFIs. M. Minaeva also awarded JSC BELARUSBANK as the “Most active issuing Bank 2016” among Belarusian participants of the TFSP.

The IIB’s delegation conducted a number of meetings with representatives of leading Russian, Belarussian and Kazakh banks, discussing a wide range of prospective projects in Trade Financing between the IIB member states of IIB and non-member countries.

The Bank offered its trade financing services for the first time in 2014. Currently, TFSP includes such products as reimbursement undertakings, trade related loans (TRL) and standby letters of credit. Banks that fit the criteria of the IIB could be issuing and supporting parties under the TFSP.

Source: IIB

IIB expands global partnership during IMF/World Bank Group and IIF events

The International Investment Bank (IIB) delegation, headed by the Deputy Chairman of the IIB Board, Mr. Jozef Kollár, took part in the Annual Meetings of the International Monetary Fund and the World Bank Group (IMF/WBG) and the Institute of International Finance (IIF) annual membership meeting during October 11-15, 2017, in Washington, DC.

The IMF/WBG and IIF meetings discussed the support for sustainable development for and the role of the international financial institutions (IFIs) in this process. These topics were the key theme of several sessions and round tables. During the discussions, its participants including the IIB representatives noted the trend related to a decrease of the effectiveness of the IFIs own activities in the current economic conditions. The situation could change with the establishment of partnerships between private investment bodies, national and multilateral development banks. Such partnerships will contribute to the risk diversification, expand access to the new markets and structure projects in such way, when each partner efficiently implements its mission.

The meetings also noted that the “window of opportunities” for further sustained growth of the world economy is related broadly to the emerging markets, which experience a record increase of business activities over the past 5 years. In this context, the importance and significance of activities of MDBs established by emerging countries, such as the New Development Bank (NDB) and the IIB, is growing constantly.

Seeking to expand its global partnership, the IIB delegates held a series of meetings with representatives of leading global banking corporations, investment groups and multilateral development banks, including the New Development Bank, European Investment Bank, WBG including the International Finance Corporation, Nordic Investment Bank, Central American Bank for Economic Integration, Moody’s,J.P.Morgan and Jefferies.

Discussions were focused on opportunities to extend mutually beneficial cooperation in the areas of project and trade financing with the participation of the IIB member-states. Other topics included: treasury operations, placement of “green” bonds and fund raising to implement sustainable development programmes. The parties also examined and planned various forms of non-financial interaction, including the concept of staff and knowledge exchange, and advisory services.

Since 2012, the IIB has jointly financed three projects with the IFC, which is part of the WBG. In 2015, the Bank received the observer status at the WB/IMF Annual Meetings. In 2017, the IIB has become a member of the IIF, which results in the overall strengthening of integration and partnership with the international community of IFIs.

Source: IIB

The New strategic era: IIB Council adopts Development Strategy until 2022

On June 26-27, 2017, the 107th Meeting of the Council of the International Investment Bank (IIB) took place in the Romanian capital Bucharest, gaining per se a historical significance in the context of the future of the Bank, which activities were relaunched as a result of the comprehensive reform of the year 2012. Its premier outcome is the unanimous approval by the member-states of the IIB’s Development Strategy for the period 2018-2022, which determines the global vector of the multilateral development institution’s growth path not only for the next five years, but its longer-term strategic guides.

The Heads of Delegations highly apprised the quality of the document, which has become the result of close dialogue and cooperation of the Bank’s management with the Delegations, the key stakeholders of the member states, as well as with the World Bank’s consultants. Following the common opinion, the presented Strategy not only meets the actual needs of the members, but also soundly designed to provide for the further development of the IIB in the new geo-political and geo-economic realities.

The next strategic cycle is aimed at enhancing the role of the IIB as an effective multilateral financial institution, which operates in the interests of sustainable development of the economies of its shareholders. That is why the Bank’s updated mission is defined as “facilitating connectivity and integration between the economies of the Bank’s member states in order to ensure sustainable and inclusive growth, competitiveness of national economies, backed by the existing historical ties.”

The implementation of the so called “Bucharest Strategy” shall provide for a two-fold growth of assets and of the loan portfolio on a five-year horizon, further qualitative improvement of customer relations, development of flexible product and service offerings in each of its member states, achievement of a greater level of financial stability and institutional maturity, in particular by transition to a three-tear corporate management system. Strategic priorities also include: expansion of the Bank’s mandate through financing export-import transactions, providing direct financing and bank guarantees, as well as trade finance and money market instruments, participation in and organization of syndications.

Among the prospective business and functional areas are: equity investments, participation in funds, provision of technical assistance and advisory services, gradual expansion of the operations’ geography and of the funding base, including by way of potential increase in the number of the Bank’s shareholders and participants with a special status. At the same time, the Bank will strive to continuously improve its operational model with the focus on the development of partnerships, credit process, risk management, compliance and internal control, as well as a motivation system.

The general line for the further development of the IIB is not just to preserve its achievements, but to multiply the effect for national economies in the new realities by firmly gaining the role of a Bank-Integrator, which acts in the interests of all member-states and every single one of them. This is also one of the key distinctive features of the new Strategy – a most precise definition of value-added for each of the countries with greater business orientation of the Bank’s activities. The value proposition will be detailed in individual country strategies, which the shareholders instructed us to draft before the end of the year,” – commented the Chairman of the IIB Board, Nikolay Kosov.

“The Bucharest Summit” gained yet another momentum by having for the first time ever a sovereign state, the Republic of Belarus, as a participant in the Open session in the capacity of the IIB’s Observer. This status was granted to the country in March 2017. For several years, the IIB has been successfully implementing the trade finance programme, a significant volume of which accounts for Belarusian counterparties, financial and banking institutions.

The Council Meeting also saw the presentation the IIB Public Annual Report for 2016, the first ever in the newest history of the institution, which was highly praised by the Delegations.

On June 27, 2017, within the course of the Open Session of the Council, the Heads of the Delegations as well as Mr. Taras Nadolniy, Deputy Chairman the National Bank of Belarus, along with other observers of the IIB made their statements; a number of documents were signed, including the Multilateral Memorandum on Cooperation between the IIB and the Chambers of Commerce and Industry of the member-states, as well as a number of credit and guarantee agreements.

The programme of public events was followed by the International Business Forum that brought together about 150 representatives of businesses, governments, commercial banks and IFIs such as AIIB, IFC, EBRD, BSTDB, EDB, EIF, EIB, as well as entrepreneurs and experts from Romania and other countries.

Since the Meeting of the Council took place in the capital of Romania – the state with one of the largest loan portfolio of the IIB, the event was co-organized with the Ministry of Public Finance of Romania and BT Capital Partners and was held under the general theme of “New Multilateral Business Opportunities for Romania”.

During three sessions participants discussed the development prospects of the Romanian economy and the stock market, the growth of investment activity in the country and in the region of the Central and Eastern Europe in general, the potential of «green» financing as an effective tool for IFIs’ cooperation, as well as the possibility of expanding trade finance and exporting-import operations with the participation of the IIB’s member states.

On the sidelines of the events, there were a number of bilateral meetings held between the Chairman of the IIB Board, Nikolay Kosov, and the senior executives of the Ministry of Public Finance, the Ministry of Foreign Affairs of Romania and a number of leading local companies and financial organizations. The common keynote of those was a mutual interest to find specific steps for further increase of the Bank’s operational activity on the Romanian track.

Source: IIB

New Development Bank and International Investment Bank Sign Memorandum of Understanding to Develop Cooperation

New Development Bank and International Investment Bank signed today Memorandum of Understanding to develop mutually beneficial cooperation between the two institutions. The MoU was signed by Mr. Paulo Nogueira Batista Jr., NDB Vice President and Chief Risk Officer and Mr. Denis Ivanov, Deputy Chairman of the IIB Board, on the sidelines of the NDB Second Annual Meeting in New Delhi, India.

According to the Memorandum, the NDB and IIB will develop sector and thematic level collaboration in areas of mutual interest, including infrastructure development and sustainable development projects in renewable energy, energy efficiency, clean transportation and other areas. The two banks will endeavour to promote co-financing and other forms of joint participation in financial assistance for development projects and engage in other initiatives, including capacity building, research and knowledge exchange.

Signing of this Memorandum of Understanding will allow us to generate synergies for the benefit of the regions where we both operate. NDB is committed to be a partner in bringing about sustainable development to drive growth and employment while ensuring environmental protection. We look forward to working together to address the world’s huge infrastructure needs,” said Mr. Paulo Nogueira Batista Jr.

We are confident that NBD and IIB could greatly benefit from mutual cooperation at the strategic, operational, and technical levels and become a good example of how international financial institutions could partner”, said Mr. K.V.Kamath, the President of the NDB. “NDB strives to be closer to the needs our members and to respond quickly and flexibly. We believe that partnerships with key national and global institutions are essential for us in order to provide the best possible products and services to our members,” added Mr. K.V.Kamath.

The Memorandum sets out areas for strategic cooperation between the IIB and the NDB towards the achievement of sustainable development and inclusive growth in countries of common interest. It further diversifies options for bolstering our global partnership and joint activities, including project co-financing, treasury management cooperation and funding of green initiatives, like the construction of hydropower generation plants in the north-west of Russia,” stressed Mr. Denis Ivanov.

Reference:

The New Development Bank was created with an objective of financing infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries. The Bank will complement the efforts of other financial institutions and establish a network of global, regional and local partnerships with multilateral and national development banks as well as other institutions and market players.

The NDB Second Annual Meeting is held in New Delhi, India. During the meeting, the management of the Bank provided an update on its work. In 2016, the Board of Directors of the Bank approved loans involving financial assistance of over USD 1.5 bln for projects in the areas of green and renewable energy, and transportation. All projects are coherent with the Bank’s mandate of supporting infrastructure and sustainable development projects. The approved projects will support the creation of about 1500 MW of renewable energy capacity and are estimated to result in the reduction of greenhouse gas emissions by over 4 million tons per year.

In July 2016, the NDB issued its green financial bond in the China onshore interbank bond market. The size of the issue is RMB 3 billion (USD 449 million). The bond has a five-year term and nominal interest rate of 3.07%. The NDB received an “AAA” institutional rating from China Chengxin Credit Rating and China Lianhe Credit Rating and commenced engagement with international rating agencies.

On 22 July 2016, the NDB Board of Directors approved the project involving the provision of financial assistance of USD 100 million for the construction of two hydropower generation plants with a total installed capacity of 49.8 MW in the Republic of Karelia in the Russian Federation. The Bank will provide the financing through two international financial institutions – Eurasian Development Bank (EDB) and International Investment Bank (IIB) for on-lending to the project.

Source: IIB