FINANCING THE NEXT SUEZ CANAL

www.jimdewilde.net

ROTMAN CLASS October 25, 2011

New financing models Innovation in municipal bonds Public private partnerships (learning from

Eurotunnel)

New projects Korean financing and ADB

Investing in Infrastructure

There is an asset category which institutional investors now

like called infrastructure funds.   From the profitable privatization of airports to the development of smart roads or toll roads as a profitable investment strategy,  this has produced a series of interesting case studies:

(1)  (VIENNA AIRPORT privatization,  ITALIAN TOLL ROADS);   (2)  Brazilian and India infrastructure funds become an

increasing part of the investment scene as a play on “emerging” market growth;  

(3)  Governments with declining tax-bases (e.g. U.S. states) seek privatization of infrastructure as a way to shift expensive categories  (water system reconstruction) to potential sources of revenue. 

Infrastructure Investment as an asset category - I

These issues become an essential part of the capital market moving forward and a

significant new component of effective investment banking.

(1)  How to finance the building of bridges in Montreal, where the financing of south shore bridges becomes a cornerstone of economic development and avoid the EUROTUNNEL situation.

(2)  How Indiana, generally considered a well-run state looks to take advantage of its positive image in the bond market to reconstruct infrastructure;

 (3)  Why infrastructure (roads, ports, railways) become a cornerstone of investment strategies in global high-growth regions  (picking Pernambuco in Brazil as a case study)  and

(4)  how Ontario has become a global centre for infrastructure finance.  The concentration of infrastructure financing expertise in Toronto is a topic worth exploring,  given the role here of Macquarie ?

 http://www.macquarie.com/mgl/mig  ,  CPPIB  http://www.cppib.ca  and other

Issues of infrastructure finance - II

CASE STUDY #1   INFRASTRUCTURE AND PRIVATIZATION :  

www.global-infra.com     GLOBAL INFRASTRUCTURE PARTNERS    Fund backed by GE and Credit Suisse.

CASE STUDY #2   INDIANAPOLIS  ?http://www.bondbuyer.com/issues/119_271/Indianapolis-Local-Public-Improvement-Bond-Bank-1006801-1.html    

CASE STUDY #3   SMART ROADS as an investment category  http://seekingalpha.com/article/267316-for-whom-the-road-tolls-reviewing-listed-toll-roads-bridges-and-tunnels  and http://www.matternetwork.com/2010/5/smart-roads-path-super-efficient.cfm

CASE STUDY #4   FROM VIENNA AIRPORT TO CENTRAL EUROPEAN INFRASTRCUTURE  TUNNELS IN AUSTRIA  http://www.ft.com/intl/cms/s/0/5cc52b7a-e084-11e0-bd01-00144feabdc0.html#axzz1bRPZvCfs

CASE STUDY #5   PORTFOLIO of 3i INFRASTRUCTURE FUND http://www.3i-infrastructure.com/disclaimer.html?r=/portfolio-summary.html 

CASE STUDY #6   VENTURE CAPITAL TRUSTS as a funding innovation in municipal markets http://www.ft.com/intl/cms/s/2/fea4c434-fb35-11e0-8df6-00144feab49a.html#axzz1baslVWd0 

CASE STUDY #7   INDIAN INFRASTRUCTURE http://www.ft.com/intl/cms/s/0/62739a58-f58c-11e0-94b1-00144feab49a.html#axzz1bRPZvCfs 

CASE STUDY #8   PERNAMBUCO    (one more let's-look-at-the-map) http://www.brazilinvestmentguide.com/blog/2011/02/pernambuco-brazil’s-fastest-growing-state-real-estate-land-property/ 

CASE STUDIES ON NEW INFRASTRUCTURE

Lights! Water! Motion!

STRATEGY AND BUSINESS

“The world’s urban infrastructure needs a $40 trillion makeover. Here’s how to reinvigorate our electricity, water, and transportation systems by integrating finance, governance, technology, and design”.

Booz Allen on Infrastructure – Trillions of dollars of Global Demand

Macquarie comes to Canada to do infrastructu

re CPPIB does infrastructure CPPIB buys Auckland Airport (NEW ZEALAND)

$1.8 billion

Canadian Institutional Investors do Infrastructure exceptionally well

www.global-infra.com CREDIT SUISSE and GENERAL ELECTRIC http://www.terra-genpower.com

http://www.gatwickairport.com http://www.chkm.com www.biffa.co.uk http://www.eastindiapetro.com http://www.i-p-h.co.ukInvestments made through IPH to date are: http://www.portbris.com.au/ http://www.itl.com.ar www.eastportuk.co.uk www.londoncityairport.com

Global Infrastructure Partners – a case study in portfolio management

Pernambuco geography

Roads Railways and Ports in Brazil

http://articles.economictimes.indiatimes.com/2011-

01-28/news/28431941_1_inclusive-growth-private-sector-india-targets

India targets $1 trillion infrastructure investment: Ahluwalia

DAVOS: India will double its investments in infrastructure to $1 trillion during the 11th Five Year Plan that begins 2012, with half of that expected from the private sector, Planning Commission Deputy Chairman Montek Singh Ahluwalia has said.

Indian Infrastructure

Financing from future revenues Railways for Africa Ports for Pernambuco Bridges everywhere

Underwater cities Megacities become Zero Waste infrastructure Incinerators, pipelines, sewage and smart

grids

The Next Suez Canal