28 February 2018 News
Rent-Back and business opportunities
ITARE and Efinvest have started developing the so-called Rent-Back, a new financial product aimed at promoting the trade between Italian holdings and their foreign counterparties. The mechanism is the following: an Italian company sells its goods to Efinvest (immediate payment) and rents them to the same company that will sublet them to a foreign counterparty. The monthly payments to be made will be previously agreed. A Rent Back operation generally lasts from 18 to 36 months. On expiry of this period, the Italian company can decide whether to take its goods back or to sell them to its foreign counterparty. Thanks to such an operation, the Italian company can offer a commercial and financial solution different from any other traditional scheme, increase competitiveness as well as obtain liquidity in the immediate future. Rent Back operations guarantee the Italian visibility at the international level and ensure the achievement of tax benefits. This is the reason why it has a positive impact on debt levels as well as on cash flow management. Efinvest is a company founded in 1987. It has been active for more than 30 years in the financial sector for small and medium sized companies, by providing medium-term renting services, defined as Rent-Back. Thanks to this new financial product, ITARE represents the point of reference for those Italian companies active in emerging markets. By identifying commercial and financial solutions aimed at promoting the trade between Italian holdings and their foreign counterparties, we strive to operate in promising geographic areas, still difficult to penetrate.
19 February 2018 News
ITARE and CDP: collaboration and support for Made in Italy
ITARE signed a collaboration agreement with CDP, National Promotion Institute, which has been supporting Italy’s growth since 1850. Italian companies, active in the international markets, especially in emerging countries, consider financial issues as a main and strategic asset for the implementation of commercial agreements as well as for the success of development plans aimed at guaranteeing growth prospects. In order to invest and sell abroad, adequate tools are necessary, both in the financial and insurance context. The purpose is to safeguard investors and exporters on the long-term growth prospect. Emerging markets, especially the ones of Sub-Saharan Africa, are constantly active in creating a business climate aimed at promoting foreign investments. The purpose is to enhance the population’s living conditions, improve the technological level of each economy, and contribute a better know-how in order to set off a virtuous circle for a sustainable growth. The lack of adequate financial resources in these areas often represents an obstacle to the implementation of development strategies and to the chance to start along the path to a sustainable growth. In this regard, the collaboration between ITARE and CDP is aimed at supporting Made in Italy in the emerging markets, on the long-term prospect. Furthermore, the purpose of this collaboration is to define and implement a development plan enabling Italian companies to benefit from the financial resources and the insurance tools available at national and international level. In particular, they will have access to Community funds aimed at promoting collaboration and development. Additional financial assistance is also provided by the EU External Investment Plan.
10 November 2017 News
ITARE inaugurates the Nairobi office to support companies in East Africa
Nairobi - ITARE officially inaugurated its office in Kenya, organizing an event at the Capital Club, attended by Italian and Kenyan companies, institutions and local ministries, as well as international financial institutions such as IFC (World Bank Group) and ATI (African Trade Insurance Agency) and the banking world. ITARE's top management took this opportunity to highlight the strategic role that Kenya represents for ITARE's internationalization strategy and presented its services that benefit Kenyan companies that work with Italian exporters. Having the opportunity to match competitive financial solutions to business offers, provided by Italian companies has proved to be one of the most effective levers to negotiate successfully. The Nairobi office, headed by Whitney Pragassa, is the reference hub for all of East Africa and aims to be the gateway through which ITARE customers can access markets in the region: Tanzania, Uganda, Rwanda, and Ethiopia. ITARE staff in Kenya is able to offer the following services to its customers: logistic support for missions in the region, agenda organization, identification and reporting of business opportunities with both public and private counterparts, establishing commercial relationships with local counterparts and preliminary assessment of financial affiliation for potential local customers. Through the establishment and continuous strengthening of its international network, ITARE aspires to be the ideal partner for all Italian and international economic players who see great business opportunities in the African continent but have not yet identified the most effective operating and financial approach to be able to grasp them. Ensuring wide spread physical presence in the most promising African markets is the first step toward gaining market share as well as respond appropriately to requests coming from one of the world's most opportunity rich areas that has the highest sustaining growth rates. With ITARE, Africa is closer than you think!
10 November 2017 News
ITARE is the main sponsor of the conference “The development of Smart Cities in Africa and the contribution of Italy” (16th November 2017, Rome)
ITARE together with its partner Dra&U, is the main sponsor of Africa Smart Cities conference organized by Internationalia and supported by the Ministry of Foreign Affairs and International Cooperation (MAECI). It is scheduled for November 16, 2017 at Villa Celimontana, Rome. The theme of urban drift is one of the most urgent and complex on the African continent. It is closely related to the phenomenon of rural development and the reduction of migration flows. ITARE's proposal to address these issues focuses on proposing original solutions that are adaptable to the African context. The Smart City idea for Africa can become an Italian system proposal, along with projects in rural areas (e.g. electrification of villages). Together with its partners, ITARE is able to offer integrated solutions ranging from urban and rural planning, to the definition of environmental solutions in line with the specificity of the reference context, to put in place innovative companies both in technology and materials supply. The role of Italian institutions, both at the ministerial level and through public actors (CDP, Sace, Simest), supporting the internationalization process is of particular importance to the implementation of this model. The projects to be implemented in the different African countries can in fact be funded under a government to government agreement, so that resources can be mobilized and customized according to the characteristics of each specific initiative. More info: Conferenza ministeriale www.africaitalia.it Smart Cities Conference Programme
2 October 2017 News
ITARE attends the Conference TXF Cape Town 2017: Export and Project Finance (October 3rd & 4th, South Africa)
By all available indicators, sub-Saharan Africa has the largest “infrastructure gap” among developing and emerging countries: in terms of quantity, quality and efficiency. Just to have an idea of the gap with the industrialized world: “Nigeria has about as much energy as Edinburgh. That is a problem” (The Economist, March 3rd, 2016). This situation has many causes: some physical (the geography of the vast African continent, with many land-locked), some historical (artificial borders and disconnected networks), some political (the inadequate level of governance), some financial (the underdevelopment of the region). The commodity boom of the past two decades and the increasing presence of China in the continent have made available additional resources for new developments, but this has not substantially changed the backwardness of the region in terms of infrastructure. China has exercised a great economic influence on the region but its role is fast changing: i) domestic financial strains and reduced dependence on imported commodities are slowing down its overseas expansion; the quality of Chinese built and financed infrastructure is often not in line with expected standards; many governments have become preoccupied with over-reliance on one foreign country. Other players are entering the continent has the Chinese have (at least) slowed down their expansion: India, Korea, Japan, Turkey. Multilateral and bilateral donors are also committing increasing amount of financial resources to the continent: The World Bank Group, with the latest IDA Replenishment; the European Union; Arab Funds. New opportunities arise for both investors and contractors willing to look at Africa with the right lenses: the demand for infrastructure is high; funding is available, albeit difficult to access; projects are financially enticing; the overall environment remains a risky one. In other words, sub-Saharan Africa in not for “faint hearted”, but for savvy-players the risk is rewarded. The key tenet of the strategy is that Africa is not one market; it is fifty-odd different markets with their own specific features. The markets are volatile, and the strategy must be adaptable and flexible. Many markets mean the opportunity to diversify the risks (commercial and political) but they also require specific knowledge of local conditions. Even in countries with the best out-look finalizing new projects is a challenge. Two key-constraints remain: i) funds for public procurement are limited (on average total public investments are only 5% of GDP); ii) the political and regulatory environment to attract private finance is inadequate. As a result, 50% of total investments depends on the budget (60% for transport) but is public effort is insufficient to make a dent in the infrastructure gap. At the same time, the distance between new projects and funding can be greatly reduced if all sources of funds can be tapped: from grants for project preparation, to export credit for EPC contracts; from the project equity available through Investment Funds, to the guarantees (private and public) available to cover various forms of risk. The combination of all these tools can be defined as “blended finance”. Any player that want to enter the sub-Saharan market needs to add a new dimension to its tool-kit: not just good technical offer; not just a competitive commercial offer. It needs to provide financial expertise to the project and the client in order to access the most efficient form of (blended) finance available. It needs to rely on its own “National System” in support of export and foreign investment, but above all it needs to know and mobilize the “Global System” of finance. In a nutshell, the main take-away from the Conference, as far as Concrete Finance/ITARE are concerned, is the following: we are in the right markets, with the right skills, at the right time. And, as far as we know, we are the only ones in Italy to deal with these issues in this part of the world.