Infrastructure PPP Projects EBRD Experience April 2012 1

Case Study Turkey: Istanbul Ferries Privatisation, Istanbul l Client: TASS, a special purpose company, established by three Turkish companies (Tepe, Akfen, Sera) and the UK’s Souter Investments to acquire IDO, the world largest municipal ferry operator, transporting 50 million passengers p. a. l EBRD finance: USD 150 million l Type of finance: Limited recourse; mandatory cash sweep; USD 100 million - long term senior loan, sculptured repayments USD 50 million - mid-term junior loan, bullet repayment l Total Project cost: USD 860 million l Year: 2011 Project description Financing acquisition of IDO by TASS l l Impact l l l Demonstration effect of the private sector value-added: introduction of new demand-driven ticket tariffs, creation of new routes and intermodal passenger transportation services Flexible financing structure with a sufficient grace period which allowed the sponsors to introduce measures to turnaround the company Introduction of a gender action plan as a tool for inclusiveness 2

Case Study Russia: Pulkovo Airport, St. Petersburg l Client: Northern Capital Gateway, a Project Company indirectly owned by VTB Capital, Fraport and the Copelouzos Group l EBRD finance: EUR 100 million l Type of finance: Limited recourse, long-term senior debt with no government grants or subsidies l Total Project cost: EUR 1200 million l Year: 2010 Project description Construction of a new terminal as well as the refurbishment of the existing infrastructure of the airport facilities at St. Petersburg airport. Impact l l l Demonstration effect of the first major PPP project in Russia to be financed without Government support. Modernisation of airport infrastructure in Russia with very high standards of energy management Involvement of an international airport specialist company (Fraport) to enhance the efficiency of the airport 3

Case Study Albania: Mother Teresa International Airport, Tirana l Client: Tirana International Airport Sh. p. k. (“TIA” or the “Concessionaire”), a limited liability company set up by Hochtief Air. Port Gmb. H, Deutsche Investitions und Entwicklungsgesellschaft (“DEG“) and the Albanian. American Enterprise Fund (“AAEF”) (together the “Shareholders”) l EBRD finance: EUR 30 million Type of finance: Combined state guarantee and long term senior debt Total Project cost: EUR 73. 5 million Year: 2005 Project description Rehabilitation of Phase 1 & 2 of Airport Terminal plus construction of access roads Impact l l l l Demonstration effect of the PPP project in an early transition country Involvement of an international airport specialist company to enhance the efficiency of the airport 4

Case Study Georgia: International Airport, Tbilisi l Client: TAV Urban Georgia, the Concessionaire granted a 30 -year concession to manage Zvartnots International Airport l EBRD finance: USD 25. 9 million l Type of finance: Long term senior debt parallel financed with IFC Total Project cost: USD 120 million Year: 2006 Project description Design and construction of Tbilisi International Airport and upgrading of the passenger terminal Batumi Airport Impact l l l First Build Operate and Transfer project undertaken In Georgia Involvement of an international airport specialist company to enhance the efficiency of the airport 5

Case Study Armenia: Zvarnots International Airport, Yerevan l Client: Armenian International Airports CJSC, the Concessionaire granted a 30 -year concession to manage Zvartnots International Airport l EBRD finance: USD 40 million l Type of finance: Long term senior debt co-financed with Asian Development Bank (USD 40 m) and DEG (USD 20 m) l Total Project cost: USD 130 million l Year: 2009 Project description Financing of the second phase of the Airport Development, including completion of passenger departure terminal. Impact l l l Involvement of an international airport specialist company to enhance the efficiency of the airport First PPP project of its type in the country International standard construction including intended BREEAM certification 6

Case Study R 1 Motorway, Slovak Republic l Client: Granvia, A. S. l EBRD finance: EUR 250 million l Type of finance: Senior Term Loan Facility of EUR 1, 050 million Total Project cost: EUR 1. 3 billion Year: 2009 Project description Design, construction, financing, operation and maintenance of three sections of the R 1 Expressway in Slovakia as well as the Banska Bystrica Northern Bypass l l Impact: l l l First concession contract awarded for a PPP structure for motorway projects in the Slovak Republic Supporting the private sector in the provision of transportation services Introducing the efficiencies of the private sector in the provision of large scale infrastructure 7

Case Study M 5 Motorway, Hungary l Client: AKA ALFOLD KONCESSZIOS AUTOPALYA RT l EBRD finance: EUR 100 million l Type of finance: Senior Debt Total Project cost: EUR 900 million Year: 2004 Project description Financing of the construction of the M 5 Motorway under Phase 1, followed by refinancing of Phase 1 and new construction of Phase 2, which was completed in 2005. l l Impact: l l l EBRD’s timely refinancing put the Concessionaire on sound financial footing in light of low traffic volumes Supported the Government’s need to remove tolls and bring the motorway into vignette system Bank provided interim finance to allow negotiation of availability payments based concession 8

Case Study M 6 Motorway, Hungary l Client: M 6 Duna Autopalya Koncesszios RT l EBRD finance: EUR 32 million l Type of finance: Senior Floating Rate Notes issued by M 6 Duna Total Project cost: EUR 482 m Year: 2005 (Phase 1), 2006 (Phase 2) Project description The Bank first participated in Phase 1 - the construction of a new 58 km road opened to traffic at the end of 2006. The Bank subsequently participated in the re-financing of this first phase. l l Impact: l l l First PPP tendered as an availability payments concession in the region Underwritten bid meant EBRD came in after the award of the concession, with added value before general syndication The refinancing was the first such instance of a PPP refinancing through the issue of wrapped Senior Notes with the participation of a monoline insurer. 9

Case Study M 6 -M 60 Motorway, Hungary l Client: Mecsek Autopalya Koncesszios ZRt (“MAK”) l EBRD finance: EUR 75 million Type of finance: Senior Term Loan Facility of EUR 784. 8 million Total Project cost: EUR 962 million Year: 2009 Project description Construction, operation and maintenance of (i) the 48 km long 2 x 2 lane section of the M 6 expressway between Szekszárd and Bóly, and (ii) the 30. 2 km long section of M 60 expressway between Bóly and Pécs in Hungary. l l l Impact: l l Supporting the private sector in the provision of transportation services Introducing the efficiencies of the private sector in the provision of large scale infrastructure 10

Case Study Bulgaria: Sofia Water l Client: Sofiyska Voda, currently 77 per cent owned by Veolia Water and 23 per cent owned by the City of Sofia l EBRD finance: EUR 51. 5 million l Type of finance: Limited recourse, long-term syndicated tranched senior debt with no government grants or subsidies, subsequently EBRD became an equity investor and remains an indirect investor through its holdings in Veolia Water l Total Project cost: EUR 147 million l Year: 2000/2008 l Project description Investment in Sofiyska Voda’s priority investment programme, including investment in water and wastewater treatment l Impact l l l A well balanced concession contract combined with efficient project implementation and necessary tariff increases lead to an increase in investment and higher service levels. Project supported the development of the regulatory framework in the water sector. Transparency of investments combined with a public outreach programme helps build consumer acceptance and satisfaction. 11

Case Study Romania: Apa Nova, Bucharest l Client: Apa Nova Bucuresti, currently 84 per cent owned by Veolia l EBRD finance: EUR 55. 4 million alongside DEG l Type of finance: Limited recourse, long-term senior debt with no government grants or subsidies l Total Project cost: EUR 155 million l Year: 2002 Project description Financing of the Crivina Water Treatment plant l l Impact l l l A well designed engineering, procurement and construction contract pushed the construction risk to the contractor and resulted in cost savings. Concession contract linked tariff increases to the concession meeting technical performance criteria. Transparency of investments combined with a public outreach programme helps build consumer acceptance and satisfaction. 12

Lessons Learnt – Key Elements for successful PPPs 1) Choice of Project - Is this project the right one? • Undertaken for sound developmental and economic reasons. • Positive economic internal rate of return; rigorous cost/benefit analysis • Politically acceptable • Environment/development balance • Will it achieve the Government’s development objectives? 2) What do the concession granting authorities wish to achieve? • Minimum cost to government and maximum use • Low environmental impact • Motor for development • Private Sector Efficiencies • Traffic diversion / free flowing traffic for road project • Projects completed on time and within original budget 10/20/2021 13

Lessons Learnt – Key Elements for successful PPPs 3) National Policy Framework for Public Private Partnerships. • Establishment of PPP unit at central government level to: • Create and maintain know-how • Introduce standardisation • Clarity in market • Speed in repeat transactions • Maintain consistent government position • Legal Environment • Need for clarity in the law governing PPPs and a structure which avoids loopholes 4) Procurement Procedure and Tender Process • Legislation to allow for procedures appropriate for award of concessions • Sensible and clear timeline with consistency • Prequalification and equal treatment to all bidders with transparent and objective process • Timing and process (scoring process) developed to produce comparable bids 10/20/2021 14

Lessons Learnt – Key Elements for successful PPPs 5) Security Issues: Whose money? 80% - BANKS 20% - SPONSORS • If things go wrong the banks need to be able to fix it before the concession is at risk (Step-in rights) • Unilateral change or termination to be balanced by economic compensation – even if termination for grantee’s fault (Debt Assumption) • These could be achieved via Direct Agreements 6) Dispute resolution • If things go wrong the banks need to be able to resolve disputes arising within the structures of PPPs in a manner that would allow parties from different legal and cultural backgrounds to resolve their disputes, generally without the formalities of their respective legal systems. Therefore, the requirement for international arbitration is crucial. 10/20/2021 15

PPP Outlook in Turkey Airports • Third Istanbul Airport, Izmir Airport, Cukurova Airport Seaports • Derince Port, Galata Port, Izmir Port Motorways • Eurasia Tunnel BOT, Privatisation of Motorways and Bridges, Gebze Izmir Motorway BOT, Third Istanbul Bridge BOT Railways • Municipality Metro projects, Rail Station BOTs Hospital PPPs • Kayseri, Etlik, Bilkent, Ikitelli and 24 others Electricity Distribution 10/20/2021 16

Headquarter: One Exchange Square EC 2 A 2 JN London United Kingdom Contacts Istanbul Office: Buyukdere Cad. No: 185 Kanyon Ofis Kat: 2 Levent-Istanbul For all further enquiries, please contact : Mike Davey Thomas Maier Director, Turkey Managing Director, Infrastructure Director, Transport Director, MEI +90 212 3861100 + 44 20 7338 7924 +44 20 7338 6202 +44 20 7338 6957 daveym@ebrd. com Sue Barrett maiert@ebrd. com barretts@ebrd. com 17 Jean Patrick Marquet marquetj@ebrd. com