SLAMIC

1. NOT AN OFFICIAL UNCTAD RECORD I D B EVELOPMENT ANK SLAMIC Trade Fınancıng Programs 11TH  AFRICAN OIL AND GAS, TRADE AND FINANCECONFERENCE & EXHIBITION 23 -25 May 2007 Together We Build a Better Future

2. IDB Experience in oil & gas trade financing in Africa • A. INTRODUCTION ON IDB • B. TRADE FINANCING PROGRAMS • IDB TRADE FINANCING OPERATIONS • BADEA EXPORT FINANCING SCHEME • C . ITFC : NEW TRADE FINANCE ENTITY Islamic Development Bank Together We Build a Better Future

3. ISLAMIC DEVELOPMENT BANKTogether We Build A Better Future A. INTRODUCTION • Authorized capital • ID 15 billion (US$20.54 billion) • Subscribed Capital • ID8.1 billion (US$11.10 billion) • Shareholders fund • ID4.62 billion (US$5.78 billion) • Established in 1975 • 56 members countries

4. ISLAMIC DEVELOPMENT BANK 56 MEMBER COUNTRIES Africa Middle East, Asia (including Central Asia) Europe (Albania) and South America (Suriname)

5. 1977 1994 1987 1995 Trade Finance & Promotion Department Milestones Islamic Development Bank Together We Build a Better Future

6. 2005 IDB BOG Established ITFC 1998 1999 Trade Finance & Promotion Department Milestones Islamic Development Bank Together We Build a Better Future

7. SALIENT FEATURES OF IDB TRADE FINANCING • Essentially deferred credits. • Maturity depends on type of goods and type of financing product : • Usually a maximum 12 months roll over facilities PROFIT MARGIN • Based on the relevant currency LIBOR for the relevant period plus a spread. • Spread reflects risks elements • “Mark to market” • IDB, being an MDB, normally charges some basis points below market rates. FUNDING • Ordinary Capital Resources of IDB (OCR) • Funds raised under Syndication /Co-financing Islamic Development Bank Together We Build a Better Future

8. COUNTRY COVERAGE CUSTOMER BASE • Government • State Owned Companies • Private Companies • Algeria • Bahrain • Bangladesh • Benin • Burkina Faso • Chad • Cote D’Ivoire • Egypt • Indonesia • Iran • Jordan • Lebanon • Libya • Kuwait • Kazakhstan • Malaysia • Mali • Morocco • Mozambique • Niger • Pakistan • Saudi Arabia • Senegal • Sudan • Togo • Tunisia • Turkey • UAE

9. GROSS APPROVALS CUMULATIVE FINANCING 1977 - 2006 US$ Million $ Million

10. IMPORT TRADE FINANCING BY YEAR Import Trade Financing US$ Million US$ Million Islamic Development Bank Together We Build a Better Future

11. GROSS APPROVALS OIL & GAS FINANCING BY YEAR (IDB Total & Africa) US$ Million $ Million

12. OIL & GAS FINANCING BY YEAR BADEA Total Africa & Sub Saharan Africa US$ Million $ Million

13. IMPORTANCE OF THE TRADE FINANCE TO IDB • IDB Strategic Framework emphasized trade as a vehicle to improve cooperation and enhance economic development of member countries • Trade constitutes 61% of total Bank’s operational approvals since 1397H (1977) • Intra trade financing represents 76% of total approvals Islamic Development Bank Together We Build a Better Future

14. BENEFITS OF THE TRADE FINANCE Adding Value to L/Cs of MC Banks • Use of Irrevocable Commitment to Reimburse (ICR); adding value to L/Cs of MC banks (exporter’s bank (negotiating bank) can claim reimbursement from IDB paying (agent) bank. Reduction in Transactional Costs • ICR is like L/C confirmation and mitigates against risks of non-payment by issuing banks. Eliminates need for additional L/C confirmation of L/Cs Islamic Development Bank Together We Build a Better Future

15. BENEFITS OF THE TRADE FINANCE Irrevocable Commitment to Reimburse (ICR) issued to exporter’s bank at no cost • No other charges such as commitment fees etc. • IDB do not perform L/C issuance, advising and negotiating roles; • Do not deprive other commercial banks of their business • IDB not only add value to L/Cs but save transaction costs. Islamic Development Bank Together We Build a Better Future

16. BENEFITS OF THE TRADE FINANCE Development of correspondent banking Facilitates growth of correspondent banking in MCs. Anchor role of ICR issuance; Agent Banks’ role as paying/reimbursing banks; importers’ / exporters’ banks (All are MC Banks). IDB has more banks on list of acceptable banks for guarantee and L/C issuance Good market knowledge of IDB • Enable MC banks to leverage on IDB’s knowledge edge. Indirectly facilitates growth of trade and investment links among MCs. Islamic DevelopmentBank Together We Build a Better Future

17. OTHER BENEFITS Trade Syndications: Leveraging on IDB present Triple A status Successful in raising funds for trade financing; sometimes Oversubscription in syndications for “below investment” grades MCs Recently completed deals: US$ 375 Mn for Bangladesh US $ 34 Mn for Gov. of Senegal; US $ 200 Mn for SAMIR, Morocco; Islamic Development Bank Together We Build a Better Future

18. INTERNATIONAL ISLAMIC TRADE FINANCE CORPORATION (ITFC) • Objectives • To promote intra trade among IDB MCs • To be a catalyst for mobilization of funds for trade finance in MCs • To complement IDB’s Group Strategic Plan on enhancing economic cooperation among MCs • Features • IDB is the major shareholder • International charter with commercial orientation • Trade financing and promotion role Islamic Development Bank Together We Build a Better Future

19. INTERNATIONAL ISLAMIC TRADE FINANCE CORPORATION (ITFC) • Approved at the 30th Annual Meeting of IDB Board of Governors (BOG) June 2005 Putrajaya, Malaysia • Capital: • Authorized : US$ 3.00 billion • Paid up : US$ 500 million • Establishment: • 1st General Assembly held on 24th February 2007. • Operations expected to start by the middle of the year. • Location: • Headquarters : Jeddah, Saudi Arabia • 1st Branch : Dubai, United Arab Emirates Islamic Development Bank Together We Build a Better Future

20. INTERNATIONAL ISLAMIC TRADE FINANCE CORPORATION (ITFC) • Membership • IDB has the majority shares (59%) • 26 Members of IDB ratified • 8 Banks ratified Islamic Development Bank Together We Build a Better Future

21. CONTACTS Trade Finance & Promotion Department Islamic Development Bank P.O. Box 5925, Jeddah 21432 Kingdom of Saudi Arabia Tel. No. : (9662) 646- 7013/14/29 Fax No.: (9662) 637- 1064 Website: http://www.isdb.org