Основным препятствием для портового инвестирования во многих странах является политический риск. В настоящей публикации рассматриваются политические и другие риски инвестирования в порты. В заключение автор выражает оптимистическую точку зрения относительно того, что на развивающихся рынках баланс риска и прибыли вряд ли может быть хуже, чем при инвестировании в портовые активы на развитых западных рынках. WSP’s Johan-Paul Verschuure explains why the gap needs to be bridged between financial institutions and port opportunities in developing markets
Obtaining funding for port developments in developing markets remains challenging, even in the current investment climate. While the appetite of large private financial institutions for finding new infrastructure investments is large and the need for additional and upgraded port facilities is pressing in quite a few developing markets, there remains a funding gap. What is preventing financial institutions from looking a bit further outside their conventional markets?
Keen financial interest was proven by the 52 parties that showed interest in the first bidding round for Long Beach Container Terminal. For DCT Gdansk there was also significant interest from industry players, financial institutions and shipping lines. In the developed world, great interest for such assets is pushing up the price and reducing the return.
However, when looking at the interest in port developments in, for example, Africa, it remains subdued. With the exception of international financial institutions – such as the African Development Bank – and some entrepreneurial investors, there are few western parties actively looking for opportunities in these markets. Noteworthy is that one group of players active in western markets is generally absent from emerging markets: private financial institutions.
Government involvement risks
Logically, the major hurdle in many countries is political risk. Recent developments around the concession of the Doraleh container terminal in Djibouti are an example of an event that international financial institutions fear most. Political involvement around the operations of ports should be limited as much as possible. And although the political climate and governance will be difficult to change for a port entity, the level of political influence in the port organisation should be minimised. Typical required returns are set higher in these regions to offset these risks, which in turn leads to reduced investment. As a consequence, export financing has become increasingly popular over the last decade. In this type of financing, western countries are willing to take on the political risk in developing markets from the private sector in exchange for securing work (and hence jobs) or sharing in the profits.
With political involvement there is also the risk of the asset falling into foreign hands. In the last few years this ‘debt trap’ has been particularly evident in Africa. Extremely favourable financial terms were offered to projects, particularly by politically-backed financiers, and when the projects defaulted the assets fell into foreign hands.
Commercially offered political insurances can provide a solution here. Although the terms may be less favourable than the ‘political’ alternatives, there is less political consequence in the case of a default. Commercial insurances for projects in developing countries are used more often in other sectors and is still a new concept in the port industry although companies like Willis and Lloyd’s are picking up some initial business in the sector.
Increase of political influence
Also, after years of increasing privatisation of ports, the trend now seems to be reversing and political involvement in port infrastructure is picking up again. This may see export financing increase in popularity. The strategic labelling of ports through the Belt and Road Initiative has been widely discussed, but this is not the only example of this trend.
Governments are increasingly influencing transactions either via lobbying or via funds tied to governments bidding on assets. Recently, for example, Belgium-based Euroports was acquired by Monaco Resources backed by two state funds, FPIM and PMV. Be warned that the introduction of this political component may end up impacting the general investment or financing capability of the sector.
Another key reason why financial institutions have shown limited interest in these markets is that business cases for ports in developing markets can vary greatly in quality. To attract the attention of the financial industry the business case has to be crystal clear. In almost all cases offtake contracts (or at the minimum, letters of intent) for the facility are required to secure external financing. Financial institutions typically step in when the business case is detailed, risks are identified and managed. However, port developers in developing markets often struggle with this. If developers struggle to develop a detailed and credible business case, teaming up with a joint venture partner or having consultants to assist in the process can help. That said, just doing the homework required for a good business plan is not enough. Transparency of the port developer is key – surprises kill a deal.
Shipping lines and global port operators appear more determined to look for opportunities in developing markets. These groups are often already involved in some form or another in these markets and can step in more easily to take over control if needed. However, these two groups also require more than a feasibility study alone.
Lack of accessible data
Part of the challenge in achieving transparent business cases is that financial institutions face difficulties in carrying out due diligence in these markets. As they are not historically core markets, available internal data is generally limited. Macroeconomic and market data from local statistical offices is often difficult to obtain and/or of poor quality. The maritime industry in western countries has developed to become much more data driven and the financial industry has become used to this level of data availability. With a wide range of digital applications and the introduction of new initiatives, such as blockchain, this focus on data is only set to increase. Developing markets must find a way to at least keep up with this development to provide the right statistics to attract investment.
Another problem with port financing in developing countries can be finding the right match. The world of financial investors is a blended one consisting of many different types of investors, each with different expertise and project requirements. Understanding these requirements and expectations and knowing when to approach investors is key.
Venture capital providers will be more interested in developing greenfield port projects but also want to be involved from day one of the project and likely on an equal basis. Clear and sound political governance is required in a country for venture capitalists to step in. Local entities must be willing to co-operate with these parties to make it a success.
At the other extreme are debt providers. These parties prefer to step into projects in developing countries when the port has been developed and is up and running. They will set very high standards for the documentation in place to prevent any issues arising on the environmental, social and operational aspects.
Debt financing comes in different forms with unilateral/multilateral financing institutions currently picking up most of the deals in developing markets. Parties like the African or Asian Development Bank can offer very favourable terms, but will go through an extensive and detailed due diligence process, for which the port developer has to ensure the right resources and documentation is made available.
Commercial banks are another option, but typically only follow global port operators or players into developing markets. Terms are typically somewhat less favourable but can be setup more flexibly. With more developing markets accessing international financial markets the option of issuing bonds has arisen. However, this can only be done when the ports are developed and operational.
In between these two extremes is the domain of private equity and infrastructure funds. Each has their interest in when they would like to step in, the level of control they want to get back for that, what their risk preference is, and geographical focus. It is in this area where most opportunities lie for new players. These parties are used to taking on more risk and are willing to do more extensive due diligence locally.
Addressing the mismatch
The mismatch between financial investors and port opportunities in developing markets does not only lie on the side of the port developers. Most financial investors have regional boundaries set through fundraising conditions, credit committees and extensive compliance processes. Most of these procedures are determined by whether the investor has experience in particular markets. Increased regulation in the financial industry has not helped in this respect.
Over the last decade the risk of investing in developing markets has been reduced due to increased transparency, more political stability, and a better understanding of how to develop port infrastructure. But few institutions have changed their procedures to reflect this and the size of their investments has lagged behind.
With global port operators and shipping lines increasing their activities in these markets, this is a real opportunity for more infrastructure fund activity in these markets. With very crowded deals on western port assets, the risk-reward balance can hardly be worse in developing markets.
Автор: Johan-Paul Verschuure is technical director for WSP, based in the UK.