„FROM THE IDEA TO THE FINANCING“
Case Study: Hungarian Municipal
Infrastructure Investment Project
Peter E. Gumpel
Chairman of Management Board
Meinl Capital Advisors AG, Vienna
Bulgarian Investment Forum 14.-15.4.2004
Meinl Bank AG
• Leading private merchant and investment bank
in Austria
• Focus: Central and Eastern Europe
 Private banking; private asset management
 Institutional asset management
 Equity banking; venture funds managment
 Emerging market debt trading and forfaiting
 Corporate finance advisory services
Bulgarian Investment Forum 14.-15.4.2004
Meinl Capital Advisors AG –
Corporate finance advisory services in Central and
Eastern Europe
• Government privatization and
restructuring advisory services
– Macedonia: Restructuring and Privatization
of Electricity Sector
– Serbia: Restructuring and Privatization of
Metalworking and Engineering companies
– Serbia: Privatization of companies in Food
Processing and Textile Sectors
Bulgarian Investment Forum 14.-15.4.2004
Meinl Capital Advisors AG –
Corporate finance advisory services in Central
and Eastern Europe
• Merger and acquisition advisory services for
private strategic investors
– Bulgaria: Advised Carlsberg A/S on acquisition of
Breweries
– Moldova: Advised owners on sale of Moldcell GSM
provider
• Arrangement of finance for governments,
municipalities and quangos
– Hungary: Advisor to Heves County (Eger Region) on
implementing and arranging finance for Regional
Waste Management System
Bulgarian Investment Forum 14.-15.4.2004
CASE STUDY: HEVES COUNTY
HUNGARY (1)
• MCA is advisor to 93 municipalities in Heves
County for preparation and implementation
of Regional Waste Management System
• Euro 65 million project, of which 50% will be
provided by the EU Cohesion Fund, 40% by
the Hungarian Government, and 10% by
private investors
• Similar projects have been planned and are
underway in Bulgaria
Bulgarian Investment Forum 14.-15.4.2004
CASE STUDY: HEVES COUNTY
HUNGARY (2)
• Step 1: Defining the Project
– Public Sector – defined the need for
modernization
– Private sector – specific technological and
financial proposals
– Regional policy of European Union – strategy for
applicants to reach EU standards (acquis
communitaire) in environmental area
– Strong political support on all levels
Bulgarian Investment Forum 14.-15.4.2004
CASE STUDY: HEVES COUNTY
HUNGARY (3)
• Step 2: Identification of Financing
Sources
– Multilateral Financing
European Union: Cohesion Fund / ISPA / PHARE
EBRD / EIB / IFC
– Bilateral Financing - Hungarian Government
– Commercial Financing
Suppliers / Commercial Banks / EGA Structured
Financing
Private Financial Investors – Special Purpose
Fund
Bulgarian Investment Forum 14.-15.4.2004
CASE STUDY: HEVES COUNTY
HUNGARY (4)
• Step 3: Key milestones in the project
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Establishment of Municipal Association – 2003
Detailed project planning – 2003
Government permitting / impact studies – 2003-04
Submission to EU Cohesion Fund of feasibility study – 2004
Establishment of operating company – 2004
Tendering for equipment – 2005
Public-private partnership – partial privatization of opco –
2005
– Realization of project – 2006-08
Bulgarian Investment Forum 14.-15.4.2004
Key success factors
• Planning and analysis: assurance of
adequate returns over investment period
under conservative assumptions
• Government support: municipal, central
government, multilateral levels
• Thorough review of technical, legal, financial
issues (due diligence)
• Flexibility and opportunism in sources and
structure of financing
• Appropriate legal and contractual framework
• Competent project management to drive
project and assure success
Bulgarian Investment Forum 14.-15.4.2004