Annual Report 2003-2004

Annual Report on Activities and Achievements 2003 – 2004

Index •

Foreword

•

UNIDO ITPO Italy at a glance o History and mandate o The role of ITPO Italy o New features and programmes o Services offered

•

Activities o Operational methodology o Promotional activities Delegate programme Participation in technical fairs: SANA 2004 Partnerships and seminars: Egyptian Investment Forum o Project completion facility Credit lines facilities (L.49/87 art.6) Joint venture financing (L.49/87 art.7) o Institutional support EEAA support project o Development of new projects Decentralized cooperation programme Institutional capacity building project in support of the Serbian development agency for SMEs Agro-Industry: traceability of export products Energy-Environment programme: promoting private involvement in sustainable development EU programme: GONETWORK

•

Annexes o o

o

Highlights of operations 1987 - 2004 Promotional activities I. Delegates 1987 - 2004 II. Seminars and country presentations (Italy and abroad) III. Technical fairs and workshops with delegation assisted by ITPO Italy (Italy and abroad) IV. Study Tours, training, and partnerships events organized by ITPO Italy Project completion facility

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I. II. III. IV. V. o

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Descriptive statistics 1987 - 2004 Investment opportunities promoted during 2003 and 2004 Negotiations assisted by ITPO Italy Concluded projects Operational projects

Institutional support programmes carried out during 2003 and 2004

Foreword

The strength of an organization nowadays is measured according to how well it rises to the challenges and obstacles set by the present global market.

We are also witnessing rapid and accelerating change in the quality of relationships between states and industrial groups.

UNIDO ITPO and the IPUs connected to it are therefore trying to provide a small yet significant contribution by stressing the concept of “network”.

Because of the challenges presented by charge, report that follows must be seen as an example of collaborative activities that are increasingly relevant for faring the economic and social challenges that arise.

It is a matter of fact that in a rapidly evolving market economy which aspires to become ‘one market and one economy’ survival requires the mainstream among of synergy, collaboration, and quality.

In this context, UNIDO ITPO contributes by trying to create an ‘integrated system’ linking different economies different productive and quality standards, and different approaches to the market.

The year 2004 brought structural change to ITPO Italy. With the new and most dynamic management, the Office gained visibility and was able to coalesce more intimately around the leading Italian institutions. This broadened the outreach of UNIDO, and led to the opening of additional overviews towards a more resultoriented future.

Sincerely, we hope you will read the report and we are always grateful for any feedback.

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UNIDO ITPO Italy at a glance

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History and mandate The Industrial and Technology Promotion Office (ITPO Italy) was established in Italy on August 12, 1985 through an exchange of letters between UNIDO and the Italian Government, and started operations in October 1987. After a series of successful joint evaluations by UNIDO and the Italian government, the planning horizon of activities was repeatedly extended (in 1989, 1994, and 2002) until the end of 2005. In the meantime, a secondary office devoted to issues specific to Small and Medium sized Enterprises was opened in Bologna in 1998. In 2004, upon recommendation by the Italian government, the office in Milan was closed and a new main office was opened in Rome.

In accordance with the decisions of UNIDO policy-making organs, the Office mandate is to contribute to industrial development and economic growth in both developing and transition economy countries. This is pursued by mobilizing resources (e.g. technical, financial, managerial) required for the implementation of specific industrial investment and technology adoption projects, from Italy to partners in targeted countries.

The Office contributes to the broader UN Millenium Development Goals by triggering economic growth and improved living standards. This is accomplished by supporting

entrepreneurship and job creation through the promotion of SMEs in countries of intervention. Through the investment promotion, ITPO Italy creates linkages between the business communities from developed and developing countries fostering the transfer of technology, know how, managerial capabilities and/or capital for the realization of industrial projects.

Since 1998, the General Directorate for Cooperation and Development of the Italian Ministry of Foreign Affairs has been adopting a new approach to sustain SMEs in selected developing countries. This features synergies between technical and financial assistance as a means to improved performance in the allocation of bilateral credit lines for the purchase of equipment and technologies by SMEs. Within this framework, UNIDO ITPO Italy has been entrusted with setting up and operating Investment Promotion Units (IPUs) in Egypt, Tunisia, Jordan, Morocco, India and Uganda. The IPUs provide local SMEs with technical assistance to upgrade technology, enhance productive specialization, and expand the scale of operation. Individual investment projects entail start-up costs that are reduced through the mobilisation of financial resources and improved access to bilateral credit lines.

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The role of ITPO Italy ITPO Italy has been challenging the bias of Italian companies against operating in either developing or transition economy countries, by taking advantage of the European Union enlargement and partnership policies.

Most Italian companies were reluctant to join industrialisation programmes abroad, especially in developing countries, due to institutional frameworks insufficiently supportive to private entrepreneurship. In particular, banks and financial institutions were ill equipped to adequately assist private investment operations.

In the early nineties, an increasing number of Italian firms (mostly SMEs) approached ITPO in search of markets and partners with the goal of maintaining their market position through less costly production from cheap labour and relatively abundant raw materials. Such a demand led the ITPO to expand the range of services provided to SMEs, in order to better fit their needs for continued support and customised assistance and to promote cooperation on a mutually profitable basis. ITPO Italy provided Italian companies with investment opportunities, along with advice on laws and regulations on Foreign Direct Investment (FDI) in an effort to reduce uncertainty on profitability prospects. The Office has been playing a key role in attracting FDI inflows to targeted areas.

This has been accomplished by selecting investment projects through appropriate screening procedures featuring project’s appraisal, the collection of relevant data, the identification of local partners, the organization of tailor made bilateral meetings, and the financial evaluation of the project.

ITPO Italy has also been consolidating its

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role in terms of institutional support by enhancing bilateral investment initiatives involving both private and public national and regional institutions.

ITPO Italy professional support has been insured at all steps of each project’s development, with the IPUs providing methodologies, expertise and operational support under the guidance of the central Office. In particular, the creation of IPUs in selected Mediterranean countries, each one associated with a bilateral credit line made available by the Italian Government, enabled the ITPO to play a significant role in the Euro-Mediterranean Partnership. In this respect, the relocation to Rome resulted in enhanced performance of the IPUs and in an unprecedented expansion of the influence and reach of the ITPO’s operations, which led the promotion of an increasing number of bilateral investment projects.

ITPO Italy and the IPUs jointly develop feasibility studies and business plans that are perceived as an intermediate but fundamental step towards the definition of a financial package. This is a distinctive feature of ITPO’s interventions as more Italian companies are contemplating the option of transferring technology and skills to emerging markets in developing countries displaying sustained growth rates, in order to take advantage of high profit expectations.

The experience of the ITPO indicates that the specific approach based on project selectivity is instrumental in stimulating the flow of private investment towards developing countries, thereby facilitating the internationalisation process of Italian enterprises to the benefit of recipient countries.

New features and programmes UNIDO ITPO Italy features new activities which are complementary to the institutional ones.

These encompass:

Decentralized cooperation

This consists of assisting Italian decentralized authorities – Regions and Provinces – as subjects of economic cooperation in developing countries, providing them with support on needs assessment, support for the formulation of technical assistance programme, joint implementation of the cooperation programmes and, finally, syndication of peer members to prepare the programme.

Agro-industry programme

Agriculture is the backbone sector in many developing countries, and a primary source of employment that can generate hard currency through exports. Taking advantage of the highly advanced and specialized Italian agriculture sector, ITPO will be focusing on framework programmes aiming at enhancing the available logistic, agronomics, commercial and market expertise (exp. Traceability Project, Green Corridor)

Environmental-Energy programme

Energy policy is of the utmost importance in sustaining stable industrial development paths.

For this reason, UNIDO ITPO Italy is setting up a promotion and technical assistance program to support private companies in collaboration with the Italian Ministry of Environment.

European Union programmes

Jointly with other ITPOs and eligible applicants such as Italian and foreign Regional Authorities, UNIDO ITPO Italy will participate in EU tenders and calls for proposals to utilize allocated funds for cooperation programmes such as ASIAINVEST and INTERREG, allowing for a stronger impact of the ITPO policy.

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Services offered Information on emerging markets ITPO Italy is a source for up to date information on legal matters and economic conditions, on investment financing and opportunities for industrial cooperation in both developing and Eastern European countries. Jointly with UNIDO Headquarters, ITPO Italy is engaged in the identification, formulation and assessment of investment opportunities. Upon screening, projects are promoted among Italian entrepreneurs as likely business partners.

Partners search The involvement of a local partner increases the chances of success for an industrial investment project. ITPO Italy assists Italian entrepreneurs in the process of matching suitable partners from areas of intervention. This activity is carried out both directly and through the ITPO’s decentralized “operative antennae”, and encompasses the feasibility evaluation of each project.

Entrepreneurial meetings Business meetings both in Italy and abroad are arranged by ITPO Italy mostly in developing countries, upon specific request of individual entrepreneurs and at specialized sectoral exhibitions that delegations of local entrepreneurs have been invited to participate to.

Preliminary evaluations of investment projects ITPO Italy assists Italian and local entrepreneurs interested in undertaking business initiatives by carrying out preliminary evaluations to asses economic and financial feasibility.

Assistance to Italian and foreign companies applying for financing under law 49/87, art. 6 Credit lines to support the acquisition of updated industrial goods and services of (prevailing) Italian origin in favour of foreign companies are established by law 49/87, art.

6. ITPO Italy advices potential Italian technology exporters on application procedures and requirements, and assists (with the collaboration of local IPUs, wherever available) eligible foreign firms throughout the preparation of technical documents required to apply to credit lines channelled through the local banking system.

Assistance to companies applying for financing under law 49/87 art. 7 Under the agreement concluded with the Italian Ministry for Foreign Affairs, ITPO Italy is entrusted with (i) the promotion of application of law 49/87, art.7 by potential Italian beneficiaries, (ii) the provision of information on the specific applicability to individual cases and, most of all, (iii) the preparation of technical documents required to apply for financing the equity participation of Italian companies in a Joint Venture under law 49/87, art. 7.

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Depending on the amount to be financed and the complexity of initiatives, the assistance may extend from the preparation of a business plan with a financial pre-appraisal of the project, to a complete feasibility study. ™ Assistance in negotiations, including the preparation of business plans ITPO Italy provides assistance to Italian companies during all phases of negotiation with potential foreign counterparts, including the organisation of company visits, the definition of the technical and economic parameters of projects, the drafting of agreements, and the preparation of complete business plans to facilitate access to available credit lines and financial resources.

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Activities

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Operational methodology The set of activities carried out by ITPO Italy constitutes a specific operational methodology.

The ITPO office manages programmes, such as ITPO itself and the IPUs in the Mediterranean area, as well as develops new programmes.

Each programme passes through a development phase and a management phase.

The phase of programme management includes implementation of activities and reporting.

The activities carried on in the Program Management phase can be divided into:

Promotional Activities

Projects Completion Facility

Institutional Support

Components of the Programmes

PROMO PROMO

PCF PCF

INSTITUTIONAL INSTITUTIONAL SUPPORT SUPPORT

PROGRAMME PROGRAMME MANAGEMENT MANAGEMENT

PROGRAMME PROGRAMME DEVELOPMENT DEVELOPMENT

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Promotional activities Investment promotion activities aim at disseminating information among the Italian business community information concerning the investment opportunities existing in developing countries and countries in transition. On such a basis, occasions for direct contacts between the Italian business community and entrepreneurs from emerging countries were organized.

The attention of potential Italian investors for selected individual investment opportunities was solicited with a view to promote the transfer of investment and technology towards developing countries and countries in transition.

The investment promotion capabilities of the Office were reinforced and deepened in order to expand the Office reach out with respect to the Italian business community.

Moreover, important synergies with selected Italian institutions were pursued so as to make available to the Office and to the Organization the expertise and the knowledge existing on the Italian territory.

Country presentations and seminars for selected developing countries were organized aiming at providing first-hand information on economic, political and social situation, particularly with respect to foreign investment legislation and regulations, industrial cooperation opportunities and incentives for foreign investments, including the utilization of bilateral credit lines.

For the “Delegate Programme� delegates from developing countries were hosted for a period of time at the ITPO in order to promote international industrial relations (see following box and annexes) Multinational delegations assisted by ITPO Italy participated at more than 40 Italian and foreign business fairs and workshops in the last 4 years.

The ITPO organized specific study tours for foreign delegations in the Italian territory providing the participant with information and direct experience on the Italian and European framework.

Moreover the ITPO prepared and continually updated a portfolio of: i) Italian enterprises interested in establishing business partnerships in both developing and transition economies countries, and ii) investment and technology projects from developing countries to be promoted in Italy.

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Seminars and Country Presentations Seminars Held

2003

2004

18

22

Fairs and Workshops Fairs

2003

2004

10

12

PROMOTIONAL ACTIVITIES

Partnerships Events Events

2003 6

2004 2

Study Tours / Trainings

Delegates Programme Delegates

Study Tours

2003 3

2004 2

2003 2004 6

2

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Delegate programme The “Delegate Programme” allows the ITPO to recruit, on a temporary basis, officers from developing countries with the specific objective of promoting industrial relations between enterprises in these countries and Italy.

The delegates, recruited from public institutions, banks and entrepreneurial associations operating in the field of foreign investment promotion, are assigned the task of presenting Italian entrepreneurs with a portfolio of accurately screened and verified investment opportunities.

Utilizing the ITPO’s operative methodology and the Office’s network of contacts, the delegates act as focal points between the entrepreneurial sectors of their own countries and Italy, creating a framework within which businessmen of both countries can develop their projects. The delegates are expected to contribute to their country’s image building process by participating to seminars and preparing documents for specialized press and magazines.

Within this framework, their work focuses, however, on fostering and organizing direct interactions between potential counterparts. Either as a follow-up to the promotion of projects from their country or in response to specific requests from the Italian private sector, delegates are extensively involved in project negotiations, organizing meetings and sometimes accompanying prospective Italian investors to their home country. The delegates offer the Italian entrepreneurial sector their awareness of the legal and economic situation of their countries in relation to the setting up of joint-ventures and foreign investment. Moreover, through the Programme, the delegates are exposed to investment promotion and project appraisal methodologies and have the opportunity for an articulated on-the-job training.

The “Delegate Programme”, active in all of UNIDO’s industrial promotion offices, has demonstrated itself as an important element in the work programme of the offices and has proved extremely effective as an instrument for institutional support as well as for the stimulation of bilateral interaction between the home countries and Italy. The presence of delegates in UNIDO Offices, in addition to triggering interest in their countries of origin, has been instrumental in mobilizing human and financial resources and has provided an indispensable service to all entrepreneurs interested in developing industrial co-operation agreements.

It is worth highlighting that, at the end of their assignment with the Office, the delegates resume their posts in their home country and can continue acting as privileged contact points within the institutional system of their country of origin for the IPO as well as for the Italian business community There are now two delegate programmes ongoing and several ones are under preparation.

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Participation in technical fairs: SANA 2004 UNIDO ITPO Italy participated in SANA 2004 (international fair in natural products: Food Health and Environment) with a stand hosting international delegations.

After the participation of ITPO Italy at “SANA 2002” (Bologna, 12th – 15th September 2002) and “SANA 2003”, (11th – 14th September 2003), the organization of the fair – Fiere e Comunicazioni srl – asked UNIDO Italy to repeat the experience of the previous years The delegation hosted at the stand came from Argentina, Egypt and Bosnia-Herzegovina for the Medical and Aromatic Plants sector, Jordan for natural cosmetics from the Dead See and Tunisia for the olive oil sector.

On this occasion the ITPO organized a workshop with business to business meetings between Italian companies and companies coming from several developing countries looking for collaboration and commercial opportunities in numerous sectors.

The foreign entrepreneurs were selected by UNIDO in order to meet Italian counterparts with whom they could present their commercial and investment projects.

Moreover the ITPO, in collaboration with SANA, organized specific seminars: ¾ The organic olive oil market in Tunisia , growing perspectives and investment opportunities ¾ In collaboration with the UNIDO-ICS research center of Trieste, local operators of the MAP sector presented the market situation and opportunities in Egypt and Argentina.

In this occasion UNIDO-ICS presented its program for the MAP valorization and utilization.

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Partnerships and seminars: Egyptian Investment Forum

The Egyptian Investment Forum, held in Cairo on December 15th 16th 2003, is an example of neworking between ITPO Italy and IPUs. Within the celebration of the ”Italian – Egyptian Year” the Forum was an occasion of political and economic evaluation and planning of cooperation between the two countries.

The forum was organized by UNIDO IPU Cairo, in collaboration with GAFI (General Authority for Investment and Free Zones) and the Embassy of Italy in Cairo, and supported by UNIDO ITPO Italy.

The event set together Governmental Institutions, ministries, Businessmen Associations and companies from Italy and Egypt, in the attempt of highlighting what should be done in order to foster Italian investment in Egypt, within a broader regional approach towards common markets and according to Euro – Mediterranean agreements.

Around 600 Egyptian companies and 100 Italian companies and institutions attended the Forum .

The Forum aimed at: •

Obtaining a realistic picture of the status of six different industrial sectors( Namely: agro-food, textile, leather, furniture, environment and automotive components)

•

Bringing together financial and political authorities

•

Giving Italian and Egyptian entrepreneurs the opportunity to meet each other through business to business meetings

•

Following up the so called “Green Corridor” between Italy and Egypt, focusing on the transport related issues.

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Projects completion facility UNIDO operates as a catalyst and promoter of co-operation agreements and joint ventures stimulating and guiding the sponsors and promoters of investment projects in the planning and negotiation with potential partners. The international business community increasingly recognizes UNIDO’s comparative advantages as an investment catalyst, as well as the validity and effectiveness of its methodology. Following such methodology UNIDO provides:

Access to investment information, institutions and private businesses through its world-

wide contact network;

Direct access to enterprises in developed countries through the UNIDO ITPO network

operating as an impartial intermediary and honest broker;

Access to entrepreneurs in developing and Eastern European countries and information

on their industrial activities;

Assistance in making pre-investment assessment;

Experience in establishing and supporting investment promotion agencies in developing

countries through capacity building projects;

The capability of mobilizing financial resources from institutional and/or commercial

banks for direct investments.

Within such a framework, the ITPO operates according to the following promotion scheme: The local promoter in a developing country, or in some cases the Italian investor, is assisted to prepare an investment project profile. The proposal, after UNIDO evaluation, is declared ready for promotion when sufficient information is available on the project and on its sponsor.

An investment profile form containing basic information, such as product

description, manufacturing process, market potential, type and volume of investment, production costs and infrastructure is prepared. The fact that UNIDO has identified a suitable partner is a very essential feature, allowing direct contact between potential counterparts to be established and reassuring the prospective Italian investor that the proposal has the managerial and financial support of a local entrepreneur.

Summary lists of project profiles are dispatched to the ITPO’s contact points, which include local banks, industrial associations and chambers of commerce, as well as individual Italian firms with which the Office has established direct operational contacts.

Subsequently, enterprises interested in obtaining supplementary information on any investment proposal receive detailed project profiles.

An investment proposal is considered under negotiation when the two potential

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counterparts have established direct contacts. During this phase, UNIDO, when requested, may facilitate these negotiations, finalize financial pre-appraisals and offer advisory services to both parties. The project is considered concluded when the foreign partner or local investor informs UNIDO that they have signed a detailed written agreement or joint-venture contract to cooperate in the implementation of the project.

Once a formal and detailed joint-venture agreement exists between two partners, they may request UNIDO to assist them in formulating a pre-investment analysis according to the criteria established by UNIDO in the “Manual for the Preparation of Industrial Feasibility Studies� and utilizing COMFAR software.

In order to promote the implementation of the project, the ITPO presents the preinvestment analysis to financial institutions, banks and insurance/guarantee agencies.

Under Promotion

Operational Projects

2003

Operational 26

2004

Projects

27

U. Promotion 223

2003

2004 223

PCF PCF

Under Negotiation Concluded

18

Projects

2003

2004

Concluded

34

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Projects

2003 2004

U. Negotiation

41

61

Credit lines facilities (L.49/87 art. 6)

The Italian Ministry of Foreign Affairs – General Directorate for Cooperation to Development – launched programmes targeting the development of local Small and Medium Enterprises (SMEs) in selected countries. The programme is designed so as to integrate a technical assistance with a financial assistance component.

-

-

technical assistance is insured by creating local Investment Promotion Offices in the Countries, opened within local Agencies relevant to the SME development and the attraction of foreign direct investments.

Financial assistance is offered through bilateral credit lines, offered at soft conditions to the SMEs through the local banking systems, in order to encourage the update of their processing equipment and techniques.

With respect to the Italian bilateral credit lines, the UNIDO network (IPUs and ITPO in Italy) is in charge of: -

-

Identifying the business opportunities, Supporting the selection of appropriate industrial technology, Contributing to the preparation of the business plan, Following up the relation with the Italian technical supplier, Introducing the Italian supplier to the procedure and regulations of the credit line (proforma invoice and settlement) Checking the technical consistency of the Italian supplier with respect to the equipment and know-how object of the transaction, following up the procedure with the relevant Italian Authorities

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Joint-venture financing (L.49/87 art.7) Art.7 of Law 49/87 represents a financial cooperation tool created to support the creation/expansion of joint ventures in developing countries encompassing specific eligibility criteria. The soft-condition loan offered to the participating Italian company is proportional to the equity capital contributed into the joint venture.

An Italian enterprise (not an individual) is eligible to the soft-condition financing if it acquires an eligible share in the joint venture , if the joint venture is located in an eligible developing country and if the sector falls within the following categories: agriculture, industry and infrastructure - limited to transports, telecommunication, energy, as well as the health and water sectors - .

Participation of the Italian enterprises can be structured in new initiatives, rehabilitation and/or expansion of existing initiatives (either joint ventures or fully local firms), funded by an increase of capital to which the Italian company takes share, and B.O.O.T. operations (Buy, Own, Operate, Transfer), given the ownership and the management time horizon is not lower than 10 years.

The soft condition loan is denominated in euro (€) and can range up to 70% of the equity capital share of the Italian enterprise. The percentage ranges from a minimum to a maximum according to specific parameters.

The soft loan is extended with a grace period of 2 years plus 8 years of repayments, at a soft interest rate, covered by guarantees.

The UNIDO ITPO Italy office since 1995, under agreement with the MAE/DGCS, provides technical assistance to the Italian companies aimed at evaluating and applying to the art.7 facility.

In particular, the ITPO provides a two-fold support to the Ministry and the companies, supporting the information and the utilisation of the article 7 provisions, by: • • • •

Providing information on financial matters ex Art.7 Offering elements on assessing investments projects Assisting in technical and financial evaluation of projects Preparing technical and economic appraisal reports for investments projects (business plan, feasibility studies) which are essential to the financing request

Following the agreement with the Italian Ministry of Foreign Affairs, the technical assistance services offered by UNIDO are free of charge (particularly, the preparation of business plans)

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Institutional support ITPO provides support services to Italian and foreign countries institutions in order to smoothen and accelerate the development of industrial partnership projects in developing countries, with due account of expertise and experience available in UNIDO. UNIDO know how and expertise in the field of technology transfer and acquisition, contractual arrangements, investment guarantees, compliance with international standards in quality, environment, etc. were made available and used by several institutions.

ITPO Organize and implement capacity building programmes for local institutions on issues such as for instance investment promotion, technology transfer, and entrepreneurial development.

Trainings

Country Studies

INSTITUTIONAL SUPPORT

Sectoral Studies and Reports

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EEAA support project EXECUTIVE SUMMARY 1. BACKGROUND. Environmental degradation, as widely known, does have a serious impact on human health and considerable drains on the economy of any country. The role of EPF (Environmental Protection Fund), the public funding mechanism within the EEAA (Egyptian Environmental Affairs Agency), is to stimulate investments in sustainable environmental projects and to mobilize private and public interest in addressing Egypt’s growing environmental challenges and needs.

In the light of the difficulties local SMEs have been facing in getting medium term lending facilities to finance their investments, EPF is considering to review and enhance its own financial incentive scheme so as to better meet Egyptian SMEs’ needs, thus contributing to preserve the Environment in the country.

In this respect, the UNIDO ITPO was required to advise the EPF in defining policies and possible new incentive schemes. In the meantime, a definite reflection is also needed as for the financial interaction between the EPF and local financial institutions.

2. FINANCIAL ASPECTS OF INVESTING IN ENVIRONMENTALLY SOUND TECHNOLOGIES (EST).

The environmental awareness and its consideration in the banks’ lending procedure is a well-spread topic in the recent literature. On the one hand, policy makers and advisors highlight how private and public companies must be instructed about the necessity to implement proper decisions and/or investment in order to increase efficiency United Nations Industrial Development Organization and, in the same time, preserve the environment. On the other hand, the inclusion of environmental considerations in the loan approval procedure by the banks is not only due to the binding requirements, if any, enforced by each Financial incentive schemes Government, but also to the economic for environmentally sound investments. effect yielded by such investments A reflection. (expected profitability, reliability, default risk and so forth).

As a matter of fact, private and public investors face a number of factors: 1. Banks’ lending policies do not ease the financing of Environment SUSTAINABLE I N D U S1 T R I A L DEVELOPMENT Sound Technology (EST) due to loan rates’ structure, collateral requirements, loan threshold rationing small projects; 2. The investment proposal needs to be backed by financial analysis, in order to enable companies to evaluate different financing choices and produce reliable business plans; 3. Environmental financing facilities promoted/funded by National/Multilateral organizations and donors must demonstrate to other financiers (e.g. local banks) that financing EST investments yield environmental and economical benefits (the so-called “win-win projects”). Applicants, backed by specialists, have to prove that the investment is commercially viable and it’s meant to produce a definite and secure flow of earnings bound to repay the loan.

Cairo, april 2004

Enrico Ambrogi

The key-challenge, difficult as it is, is the direct engagement of local financial institutions, since no mechanism fully funded by governments/donors on grant basis can be expected to play a structural role in backing EST, and related investments, in the medium long term.

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3. POSSIBLE MECHANISMs TO SUBSIDIZE AND/OR STIMULATE ENVIRONMENTAL INVESTMENTS BY SMES. In many developing countries the due diligence process is mainly focused on the financial aspects rather than on the straight assessment of environmental costs and risks. The first hurdle is dominant and cannot be considered as a mere technical aspect. In other terms, a project is not generally rejected because of an inefficient and/or inadequate environmental analysis, but rather because of the weak financial structure of the applicants, lack of collaterals, bank’s lending policy, exorbitant risk awarded to the specific deal etc..

In the present chapter, a number of mechanisms meant to support Environmentally Sound Investments are discussed. In particular, their capacity to stimulate both end-users and financing institutions is investigated.

United Nations Industrial Development Organization

The key issue is not only to finance efficient (win-win projects) ESTs granting soft Mechanism’s features conditions, but also the concrete and proactive involvement of a (limited but committed) GRANT SUBSIDY number of commercial banks entitled to promote and manage the facility from the financial point of view.

INTEREST RATE SUBSIDY 50% of eligible investment costs can be Among the mentioned mechanisms, a subsidized. revolving mixed facility (funded by the donor as The grant is disbursed in advance, well as the private financial institutions) seems DIRECT LENDING subject to the funding of the remaining to be the most proper tool to meet such needs, amount (by shareholders, in principle).

REVOLVING MIXED on the basis of a framework agreement among LOAN the partners, which should include procedure, tentative terms of reference of eligible operations, commercial reward in favour of SUSTAINABLE I N D U S7 T R I A L DEVELOPMENT participating banks etc., so as to set, from the very beginning, respective roles and obligations. A specific focus should be devoted to the risk sharing between donor and financial institutions joining the facility, to back them in bearing the overall operational risk of each loan.

4. A TENTATIVE PROCEDURE The chapter faces the problem of how to structure a procedure consistent with the above mentioned considerations and issues. In particular, this part of the document illustrates two main roles:

The donor/Environmental agency, charged with implementing the eligibility/environmental due diligence issue, with backing the applicant as well as verifying the financial/economic feasibility; The partner bank, whose role is to evaluate the application according to the financial reliability of the applicant.

Both shared risk and subsidization must exert an influence on the negotiation phase between the partner bank and the applicant. As for the financial/economic feasibility, UNIDO is available to support the EPF in defining procedure and related activities.

United Nations Industrial Development Organization

Key challenge is...

United Nations Industrial Development Organization

Revolving Fund (Mixed provision) Payment of capital propro-quota

the direct involvment of: EndEnd-users (i.e. Public and private companies implementing their investment in EST)

+ reduced interest (0.5%)

PUBLIC FUNDS Financial institutions

participating into the programme in view of expanding the scheme’s impact on the national market

REVOLVING FUND

SOFT LOAN

ENDEND-USER (SME/Public Reimbursment company)

PRIVATE (BANKS) FUNDS

Capital + subsidized interest (8%) Reimbursment of capital proproquota+ market interest (14%)

SUSTAINABLE

I N D U S4 T R I A L

DEVELOPMENT

SUSTAINABLE

12 T R I A L INDUS

DEVELOPMENT

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5. Conclusions.

A conducive policy to support environmentally sound investments can be hardly implemented without a strong and proactive involvement of private/commercial financial institutions, in view of establishing a structural mechanism capable of backing the industrial system. To achieve this goal, the most appropriate tool might be putting together public and private funds, so as to provide end-users with subsidized loans, together with a risk sharing policy among interested parties. A properly structured Framework Agreement between the EPF and participating banks should define not only respective obligations but also ranges of values relating to tenure, rates, amortization and also collaterals’ requirements. As for the alleged procedure, environmental due diligence performed by the EPF might be integrated by an economic and financial feasibility study to be forwarded to the bank for the final evaluation United Nations Industrial Development Organization

SUSTAINABLE

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17 T R I A L INDUS

DEVELOPMENT

Development of new projects As remarked, ITPO started new programmes, in addition to the continuing activities, aiming at better fulfilling its mandate. These new programmes were developed in 2003 and 2004 and are now becoming operational.

Some particularly significant programmes:

Decentralized Cooperation

Agro-Industry programme – Traceability project in Egypt-

Environmental programmes

European Union programmes

Decentralized Cooperation

Agro-Industry Traceability Egypt

Serbia Project

PROGRAMME DEVELOPMENT

Environmental program Kyoto programme

European Union Programmes GONETWORK

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Decentralized cooperation programme The main objective of the decentralized cooperation programme is to support Regional Authorities in developing and implementing cooperation programmes with selected developing countries The Italian cooperation legal structure has been modified in 2001 by a constitutional reform that introduced new powers for territorial organization (Regional and local administration).

On the basis of the new provision, Regional and local institutions can undertake programs and activities related to international cooperation in accordance with Italian Ministry of Foreign Affairs guidelines.

Moreover, the European Union looks at territorial administration and at private organizations, as new actors and beneficiaries of measures related to the establishing of the Euro- Mediterranean Free Trade Zone (proximity policies).

On this line, Barcelona process has identified international partnerships among local systems as the prominent tool to facilitate the sharing of experience and good practice between Mediterranean partners and the countries of the European Union.

In view of these, the ITPO has organised a branch (decentralized cooperation branch) with the aim of building synergies with Italian territorial organizations, Regional and local administrations, investment promotion agencies and local development agencies, in order to support their efforts and assit them assistance in the implementation of programs related to new provisions. To these aims, the new branch was responsible in establishing contacts with the new actors and in presenting them UNIDO activities in the field of technical assistance for industrial development.

Contacts were pursued with selected Regional Authorities in order to identify priority sectors/areas and they were assisted in the formulation, negotiation and implementation of specific programmes with selected Developing Countries Particular attention was paid to the Mediterranean network of Investment Promotion Units, as they are strategically important to assist Italian decentralized cooperation actors in the identification and in contact with local counterparts for the implementation of joint programs.

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Decentralized cooperation projects

Region

Title

Brief Description

Sicilia

Tunisia

Common activities in the field of investment promotion in Tunisia

Marche

Asia Invest

Participation as partners in Asia Invest program in China

Basilicata

Kyoto Protocol implementation

Lazio

Serbia and Tunisia

Veneto

Serbia and Tunisia

Toscana

Serbia

Support and technical assistance in Kyoto protocol mechanism implementation for local SMEs Collaboration in investment promotion activities within the Serbia project and with UNIDO IPU Tunis Collaboration in investment promotion activities within the Serbia project and with UNIDO IPU Tunis Collaboration in investment promotion activities within the Serbia project

27

Institutional Capacity-Building project in support of the Serbian Development Agency for SMEs The General Objective of the project is to upgrade - mainly through training - the technical know-how of the Agency, to allow it to better support local SMEs by addressing the key issues related to the private sector development. This process is meant to attract an increasing flow of foreign direct investments, fostering Serbia’s integration in the world market economy. The project will be implemented through the creation of a Support Unit in Belgrade working in close consultation with the SMEs Agency of Serbia (and assisted by a Backstopping Unit in Italy) and is expected to have a whole countryside outreach. The overall activities can be divided as follows: • Institutional capacity-building for both the Agency in Belgrade and its local branches; • Upgrading of the Information Technology system of the Agency; • Global investment promotion activities and finalisation/tailoring of financial and credit access instruments.

Specific Objectives of the project are: • To create the conditions for developing and sustaining local entrepreneurship; • To facilitate the establishment of business linkages between Serbian and Italian entrepreneurs and of co-operation channels between Serbian and Italian local authorities and institutions; • To foster policies and services in assisting SMEs through the use of up-to-date approaches for mobilising, utilising and optimising financial resources from different sources i.e. national, E.U. etc. with a specific focus on young and female entrepreneurs; • To foster co-operation between Serbian, Italian and International entities in the area of training, applied research, and innovation.

Main activities will be divided in a start-up phase (Start-up of the Support Unit at the Agency, start-up of the Backstopping Unit in Italy and presentation workshop in Belgrade), implementation phase (Installation of relevant hardware and software, fostering the Information Desk, set-up of a database on existing financial tools, formal and on-the-job training, overall technical assistance: regional offices and investment promotion, stages in Italy, feasibility study to foster credit funds for SMEs and pilot projects) and assessment and dissemination phase.

The results achieved at the end of the project shall be: realization and adoption of the operational plan, strengthening of the information desk for local and Italian enterprises, upgrading of the Agency website and realization of appropriate databases, upgrading of the Agency’s operations in terms of hardware and software (server, personal computers, printers, etc.), internationalization of the local production system (development of export activities for local enterprises and attraction of foreign companies into the region), personnel training with regard to SMEs development, credit access for local enterprises and related financial issues, finalization of a manual with regard the operational procedures of the Agency, data collecting on enterprises and their associations working in Serbia, financial and organizational support interventions to local enterprises for the participation in fairs, conventions and other relevant events.

28

Agro – Industry: traceability of export products

Introduction Export of fresh products is increasingly becoming a relevant source of hard currency and Italy is one of European countries more involved The European Parliament issued the Regulation n° 178, 2002 that establishes the European Food Safety Authority and lay down the procedures in matters of food safety. Among the principles, the regulation introduces the concept of traceability defined as (art. 3, par. 15) “the ability to trace and follow a food, feed, food-producing animal or substances intended to be, or expected to be incorporated into a food or feed, through all stages of production, processing and distribution”.

Art. 11 states “ Food and feed imported into the Community for placing on the market within the Community shall comply with the relevant requirements of food law or conditions recognised by the Community to be at least equivalent thereto or, where a specific agreement exists between the Community and the exporting country, with the requirements contained therein.

Recognizing that the measures to be adopted could pose, although meant to protect European consumers, at risk the development of non-European agro-based economy of developing countries, the regulation introduces the art. 13 that states: o “the Community and the Member States shall: o par. C – contribute, where relevant and appropriate to the development of agreements on recognition of the equivalence of specific food and feed related measures; o par. D – give particular attention to the special development, financial and trade needs of developing countries, with a view to ensuring that international standards do not create unnecessary obstacles to exports from developing countries;”.

UNIDO has the mandate to assist developing countries and their enterprises, in the adoption of the most up-to-date technology and policy to improve their competitiveness UNIDO ITPO Italy and its IPU in Cairo have received, by the Italian government the specific mandate to assist Egypt in this effort

29

Brief Project Description In the framework of the “Debt-for-Development Swap” agreement, signed in Rome on 19.02.2001 by the Government of the Italian Republic and the Government of the Arab Republic of Egypt, in compliance with the Administrative Rules and Procedures adopted by the Management Committee on 26.08.2001 and in light of the importance of the export of national agro-industrial products, the Egyptian Ministry of Foreign Trade decided to apply with UNIDO, for a project meant to support the adoption of the traceability schemes of agroindustrial products The project, Traceability of agro-industrial products for the European market, sponsored by the Egyptian Ministry of Foreign Trade (MoFT) and to be implemented by the UNIDO, is meant to support Egyptian producers and exporters of agro and agro-industrial products to Europe to comply with the new European regulation on food safety and circulation (EU 178/2002). Companies and public institutions will be assisted in their efforts to match the requirements set by the European legislation. The initiative will prevent legislation meant to protect consumers from becoming a trade barrier and so an obstacle to the development of the Egyptian export and access to foreign markets.

The project includes a technical assistance component together with a funding facility for acquisition of know-how and technology.

The initiative would guarantee future competitiveness to Egyptian exporters of agro-industrial products and food security to European consumers. In addition to that, the project would develop the national capability to deal with quality and certification issues.

The project has a budget of 45 M EGP: 8 M EGP are meant to be for technical assistance and 27 M EGP are meant to be for financial assistance.

UNIDO will be implementing in coordination with the MOFT the technical assistance component.

Expected Target Beneficiaries The main beneficiaries of the action will be producers and exporters of agro and agroindustrial products and national support institutions.

Specifically, exporters and importers/distributors, i.e. along the whole production and distribution chain across the borders, will be assisted to upgrade and/or jointly establish traceability schemes. To build the traceability schemes would require transfer of technology and investment between Egyptians and European enterprises and support institutions. In particular, being Italy the main commercial partner in the sector, it is proposed that the UNIDO ITPO Italy and its investment Promotion Unit in Cairo assist the process

Expected Results

National capability (private and public) to assist Egyptian enterprises to comply with European regulations Development of traceability schemes certified and accredited at international level Increased speed and credibility of Egyptian and across-the borders control systems over origin and quality of products

30

Energy-Environment Programme: promoting private involvement in sustainable development The United Nations Industrial Development Organization (UNIDO) programmes and activities are aimed at improving the living conditions of people and promoting global prosperity through offering tailor-made solutions for the sustainable industrial development of developing countries and countries with economies in transition.

UNIDO Investment and Technology Promotion Office (ITPO) Italy, financed by the Italian Government, is part of a network of offices that have the mandate of supporting the development of the industrial sector in developing countries through the encouragement of partnerships, direct investment and/or technology transfer agreements between companies throughout the world.

UNIDO International Centre for Science and High Technology (ICS) of Trieste, gives support to the diffusion, integrated use and application of new methods and theories for environmental assessment and analysis (e.g. for industrial development planning, sitting, etc.). These focus on the combined application of Decision-Support Systems (DSS), Expert Systems (ES), Geographic Information Systems (GIS) and Remote Sensing (RS) input and output, bringing a massive expansion in the analytical capabilities available today in the field of environmental applied research and pollution prevention.

The UNIDO cleaner production (CP) programme and network aims at building national CP capacities, fostering dialogue between industry and government and enhancing investments for transfer and development of environmentally sound technologies. Through this programme, UNIDO is bridging the gap between competitive industrial production and environmental concerns. CP is more than just a technical solution. It has a widespread application at all decision-making levels in industry, with the chief focus on adoption of cleaner technologies and techniques within the industrial sector. Costly end-of-pipe pollution control systems are gradually replaced with a strategy that reduces and avoids pollution and waste throughout the entire production cycle, from efficient use of raw materials, energy and water to the final product.

The flexibility mechanisms of the Kyoto Protocol (KP), in particular the Joint Implementation (JI) and the Clean Development Mechanism (CDM), have the potential to constitute a real incentive to foster international industrial cooperation. Anyhow, till now, the novelty of these instruments, the uncertainties produced not only by the general legal framework, but also by a bottom-up ruling system, and the complexities of the elements that should be demonstrated for the presentation of the projects (methodologies, baselines determination, monitoring, etc.), has prevented most of the private sector (industries and financial sector) of participating to this system.

For these reasons, UNIDO ITPO Italy is setting up a promotion and technical assistance program to support private companies willing to operate within the framework of the JI/CDM through the following activities:

31

1. Investment promotion: Since its creation, UNIDO ITPO Italy has fostered its competence for the investment promotion. Using UNIDO methodology, in collaboration with the CP network, this Italian office has the technical capacity for the identification and promotion of investment opportunities in developing countries both in industry and/or infrastructure sectors. This ability will be available for the projects participants willing to produce carbon units (CERs or ERUs). In particular: • • • • • •

Scouting of CDM or JI projects ideas; Dissemination within the Italian business community of the potential and opportunities of the KP flexibility mechanisms; Matchmaking between supply and demand of JI/CDM projects; Promotion, through UNIDOs network of offices, of JI/CDM investment identified projects; Facilitation of the contacts between the relevant stakeholders (project participants, local communities, local authorities, DNAs, DOEs, etc.); Preparation of a CERs/ERUs marketing strategy.

2. Technical assistance: UNIDO ITPO Italy offers its own competence for the evaluation and appraisal of investment projects using the specific methodology and tools developed by the Organization. This assistance is aimed at: • • •

Financial and economic evaluation of the investment proposals within JI/CDM projects and pre-feasibility study of the project; Establishment of financing needs and availability; Preparation of the economic documents related to the Project Design Document (PDD).

3. Technology determination: in collaboration with UNIDO ICS Trieste, evaluation of the technical feasibility of the project. Identification and evaluation of the available technical solutions for each single project.

4. Project modelling and monitoring: in collaboration with UNIDO ICS Trieste or other available Technical Institutions, determination of the baselines, business as usual scenarios (BAU), emission reductions and monitoring plans.

Expected results: • • • • •

32

Sensibilization of Italian business community: private companies, financial sector; JI/CDM project portfolio; A flexible structure able to help Participating Parties (PP) during the whole process of implementation, presentation, implementation, monitoring and certification of JI/CDM projects; Abatement of the transaction costs supported by private companies; New methodologies and/or Projects development and presentation.

EU Programme: GONETWORK Foreword SMEs do play a crucial role in the economic and social systems as well as in the sheer employment creation.

One of the most relevant difficulties hampering the SMEs’ development in the north African area is their weak bargaining power in credit negotiation, mostly due to the lack of security (guarantees) required by the lenders and to be provided by the borrowers.

On the other hand, a crucial challenge for local Governments is to increase the capital flows from the Banking system to the SMEs. As well known, Credit Guarantee Schemes (CGS), meant to issue short and medium term guarantees in favor of the lenders, have gained a relevant and widespread importance, as affirmed by the EU Regulation in 1991 (SEC 91 1550).

More and more the Mediterranean area has been turning in an interlinked market, in which industrial firms increasingly need to have a proper support, in particular whenever financial issues are concerned, where UE country experience might give north African players a useful contribution. In the light of this, the creation of a CGS network applying common and wide accepted evaluation methods might be a concrete advantage to better meet the development’s needs of the north African SMEs.

33

The Project The project under definition is shaped according to the following pillars: 1. To implement Guarantee Schemes in the MEDOCC area, also strengthening linkages and relations between EU countries and the others, in order to improve credit access.

2. To create a multi-country network encompassing EU and local CGS, local Government administrations, Development Agencies, Industrial Associations etc, with the final aim to properly define and settle business relations between industrial players and financial institutions; 3. To implement a pilot programme for creating either a new CGS or to expand/support an existing institution., by applying criteria and procedures also stemming from the experiences European economies have had over the latest decades.

4. To develop, through the network, international cooperation between companies in the MEDOCC area (joint venture, commercial agreement between CGSs’ associates),

Envisaged partners • • • • • • •

Three Italian Regional Governments (the “Regions”) A Greek Guarantee Company.

A French Guarantee Company.

A French Chamber of Commerce A Lebanese guarantee Company A Jordanian guarantee Company An Egyptian guarantee Company

In this framework, the alleged lead partner of GONETWORK entrusted the service company of the Italian Industrial Credit Guarantee Association and the UNIDO ITPO with drawing the proposal and acting as programme manager and technical advisor should the project be approved by the entitled EU authority.

Expected outcomes Definition of Standards and Procedures among the different involved countries, in order to identify new mutual financial schemes meant to introduce the sharing among CGS of different countries, with particular regard to export finance operations.

To contribute in improving business relations between SMEs systems and financial institutions of each countries; To Support a better financial structure of local SMEs, in order to strengthen their own negotiation power with financial institutions.

To implement a Guarantee Pilot Programme, to be replied in different cases.

34

Annexes

35

Highlights of operations 1987-2004

Promotional activities Total delegates programmes1 (units) Seminars and country presentations (Italy and abroad) (units) Technical fairs and workshops with delegation assisted by the ITPO (Italy and abroad)2 (units) Study tours managed by the ITPO (units)

Projects completion facility Promoted investment opportunities (units) Total negotiations assisted by ITPO Italy (units) Total concluded projects (units) Total operational projects (units)

1

2003

2004

1987-2004

6

2

75

18

22

435

10

12

61

3

2

20

2003

2004 1987-2004

223

223

19510

41

61

1155

34

24

420

26

27

151

In addition to the programmes listed the Office implemented short terms programmes. The total number of delegate programmes implemented from 1987to 2004 is 75 2 Statistics starting from year 2000 in connection with the activity support offered to the Investment Promotion Units in the Mediterranean Countries

36

Promotional activities I) Delegates 1987 - 20043 Name

Country

From

To

Local counterpart

1

Mr Bruno Farrari

Argentina

March 1988

April 1991

Banco de la Ciudad

2

Mr Tran Dong Phong

Vietnam

April 1992

March 1994

State Committee for Cooperation and Investment

3

Mr Oscar Freudental

Andean Countries

May 1992

August 1992

UNIDO Investment Program

4

Mr Benjamin Mwanga

Tanzania

January 1993

May 1993

Tanzanian Investment Promotion Centre

5

Mr Song Xianfeng

China

January 1993

December 1995

Hebei Committee of Foreign Economic Relations (COFERT)

6

Mr Grzegorgz Bychawski

Poland

February 1994

December 1995

IPS Warsaw

7

Mr Petr Jaros

Czech Republic February 1994

December 1995

SP Confederation of Industry

8

Mr Jacob John

India

January 1995

June 1996

Assocham (Indian Chamber of Commerce)

9

Mr Raphael Casillas Polanco

Mexico

June 1995

June 1999

National Financiera (NAFIN)

10

Yan Xinzhou

China

July 1995

December 1997

Foreign Investment Service Centre, Shangai Municipality

11

Ms Naima Aqrou

Morocco

February 1996

March 1998

Office pour le Developpemement Industriel (ODI)

12

Mr Bassam Khalil

Palestine

April 1996

March 1998

Ministry of Industry

13

Mr Prasanta Biswal

India

February 1997

November 2001

Federation of Indian Chambers of Commerce and Industry (FICCI)

14

Mr Christopher Capistrano

The Philippines

April 1997

October 1998

Board of Investment (BOI)

15

Mr Nuno Maposse

Mozambique

June 1997

December 1998

Centre for promotion of Investments

Ethiopia

September 1997

China

February 1998

16 Ms Alemtsehai Ghirmay 17

Ms Lingyuan Jiang

February 1998 Ethiopian Investment Authority December 1999

China International Centre for Economic and Technological Exchange (CICETE)

3

in addition to the programmes listed the Office implemented short terms programmes. The total number of delegate programmes implemented from 1987to 2004 is 75

37

18 Ms Liliana Rave Samra

Colombia

May 1998

July 1998

Centro Regional de Inversion, Informacion y Tecnologia (CRIIT)

19

Mr Afif Barhoumi

Lebanon

October 1998

December 1998

Investment Development Authority of Lebanon

20

Mr Amr Gamal El-Din Hossny

Egypt

October 1998

August 2000

General Authority for Investment (GAFI)

21

Mr Omar Al Saket

Jordan

November 1998

November 2001

Investment Promotion Corporation (IPC)

22

Ms Mary Mabweijano

Uganda

May 1999

November 2001

Uganda Investment Authority (UIA)

23

Mr Essam M. Audeh

Bahrain

October 1999

November 1999

Ministry of Oil and Industry

Mr Essam M. Audeh

Bahrain

April 2000

April 2000

Ministry of Oil and Industry

Saudi Arabia

November 1999

November 1999

Saudi Consulting House

24 Mr Joseph A. Al-Ohali 25

Mr Amr Ahmad

Palestine

26

Mr Babak Aghaei

Iran

27

Mr Mohammad Mehdi Dalvand

Iran

28

Mr Wang Shicai

China

29

Mr Dang Ba Tho

Vietnam

30

Mr Wang Yu

China

31 Stephen Osei Yeboah

Ghana

Palestinian Industrial Estate and Free Zones Authority, Ministry of Industry (PIEFZA) Organisation for Investments December October 2001 and Technical and Economic 2001 Assistance in Iran (OIETAI) Organisation for Investments December October 2001 and Technical and Economic 2001 Assistance in Iran (OIETAI) China International Centre for October 2000 February 2002 Economic and Technological Exchange (CICETE) International Cooperation September September Department, Ministry of 2000 2002 Industry March 2000

May 2001

March 2002

April 2002

November-02 November-02

All-China Investor Services Centre (ACICS) Ghana Investment Promotion Centre

32

Emiliano Cisneros

Argentina

March 2002

December 2003

Fundacion Invertir

33

Mr Slaheddine Chouikha

Tunisia

October 2001

December 2003

Foreign Investment Promotion Agengy (FIPA)

34

Ms Ruth Lwetabe

Uganda

November 2001

August 2003

Uganda Investment Authority (UIA)

35

Mr Adel Ali

Jordan

March 2002

March 2003

Jordan Investment Board

36

Ms Enying Yao

China

September 2002

Ongoing

Supported by various Institutions

37

Mr Dino Fortunato

Argentina

April 2003

Ongoing

Argentinean Ministry of Foreign Affairs

38

II) Seminars and country presentations (Italy and abroad)

Seminars and country presentations held

Date

7 February 2003 19 February 2003 27 February 2003 20 March 2003 26th / 27 May 2003 28/29 July 2003 9 September 2003 12 September 2003 12 September 2003 October 2003 10/11 Novembre 2003 27/28 November 2003 26 December 2003 15/16 December 2003 17 December 2003 December 2003 12 December 2003 September to December 2003

Title National Meeting for the Coordination of the Partnership Initiative within the III World Water Forum – Kyoto (Japan), 16-23 March 2003 “Investments opportunities in the North-West of Tunisia” UNIDO Argentinean SME’s Program Les investissements direct étrangères et le développement des PMEs Strengthening Cooperation of Medicinal and Aromatics Plants National Focal Points One day reflection Investment opportunities in Tunisia Presentation of the Argentinean industrial sector recovery program PROGAN constortia presentation Joint Venture In China Il settore della componentistica auto in Tunisia

Venue

Turin Rome Bologna Tunis Trieste Amman Pesaro Bologna Bologna Padua Turin

Turin International Seminar on Local Development Argentina UNIDO ITPO Italy Activities & Investment Cordoba (Argentina) promotion Egyptian- Italian Investment Forum BASILEA II - Banca di Roma Presentation of ItalSystem for Environment (IS4E) Investment opportunities in Tunisia How To Face The Competition Of Chinese Products

Cairo Venezia Milan Latina Brescia

39

Date

February 2004 17/20 March 2004

Title

La Sfida Dello Sviluppo Della Cina Sep 2004: Environment Technologies in Egypt: Investment Opportunities

March 2004 UNIDO ITPO Italy Agricultural Mission in Argentina March 2004 1 April 2004 6-8 May 2004 May 2004

22/23 July 2004

9 September 2004 11 September 2004 9-12 September 2004 3/4 October 2004 10 October 2004 14 October 2004 October 2004 October 2004 10 December 2004 14/15 December 2004 15/16 December 2004 12 December 2004 December 2004 December 2004

40

Yuangzhou Projects Promotion La Sfida Dello Sviluppo MacFrut: Green Corridor and Investment opportunities Lo Sviluppo Tra Cina Ed Italia Le opportunitĂ offerte dalle Nazioni Unite e dalla Politica di ProssimitĂ della Unione Europea per il partenariato territoriale di sviluppo nel Mediterraneo Occidentale.

The biological oil production in Tunisia, between growth perspectives and positioning dilemmas (organised at Sana fair) Argentina after 2002 crisis Sana 2004: Medical and Aromatic Plants in Argentina, Bosnia Herzegovina and Egypt Fifth Conference on Euromediterranean Enterprise Moroccan Investment Opportunities in the Agro Business Presentation of the desk of packaging UCIMA in Egypt Seminars on UNIDO services 2nd C.T.I. seminar Transfer Technology in the Raw Materials Sector Development International Conference on Sustainable Development Flexible Mechanisms and private companies: the Role of UNIDO ITPO Italy Biodiesel development in Croatia Tianjin delegation visiting Rome UNIDO ITPO Italy Housing, and Building Mission in Argentina

Venue

Rome Padua Buenos Aires, Mendoza, Mar del Plata (Argentina) Milan Milan Cesena Rome

Naples

Bologna Bologna Bologna Caserta Cremona Bologna Friuli Venezia Giulia and Veneto Vienna Mar del Plata (Argentina) Matera Buenos Aires (Argentina) Zagreb Rome Mar del Plata (Argentina)

III) Technical fairs and exhibitions with delegations assisted by ITPO Italy (Italy and abroad)

Descriptive statistics 2000-2004 Fairs and exhibitions, 2000- 2004 Italy

Abroad

Total fairs

52

6

58

Participating delegations

Country of origin

Number of delegations

Jordan

20

Egypt

10

Morocco

7

Tunisia

17

Bosnia

1

Argentina

6

Uganda

8

India

4

Vietnam

5

Mexico

1

Palestine

1

Italy

6

Total

86

41

List of fairs and exhibitions, 2003

Date

Title

Venue

Delegations

Febrary 2003

MIA: Mediterranean Seafood Exhibition

Rimini

Tunisia

March 2003

FIERAGRICOLA

Verona

Uganda

March 2003

COSMOPROF

Bologna

Jordan

April 2003

SANA

Rome

Tunisia

May 2003

Lineapelle

Bologna

Uganda

September 2003

SANA 2003

Bologna

Egypt-Tunisia-Uganda-Argentina

September 2003

SMAU

Milan

Jordan

September 2003

Moda In

Milan

Morocco

October 2003

Marmomacc

Verona

Argentina

October 2003

Eurodomus

Padua

Jordan- Egypt

List of fairs and exhibitions, 2004 Date

Title

Venue

Delegations

March 2004

SEP 2004

Padua

Jordan- Egypt

April 2004

HORTIFRUT 2004

Mar del Plata (Argentina)

Italy

April 2004

Auto business event

Qingdao (china)

Italy

May 2004

MACFRUT

Cesena

Jordan

May 2004

Cibus

Parma

Morocco

May 2004

Samuplast

Pordenone

Tunisia

September 2004

SANA 2004

Bologna

Jordan-Egypt-Tunisia- ArgentinaBosnia

September 2004

Ready to show

Milano

Morocco

October 2004

Siat

Tunis

Italy

October 2004

Marmomacc

Verona

Tunisia, Argentina

October 2004

Eurodomus

Padua

Jordan- Egypt- Morocco

October 2004

TECNARGILLA 2004

Rimini

Argentina

42

IV) Study tours, training, and partnerships events organized by ITPO Italy Study tours and training, 2003 Date

Location

Participating delegation

Brief description

3-7 February 2003

Bologna

6 participants: The promotion of foreign investments in ODNO officers (Tunisia) the agro food sector

17-21 February 2003

Bologna

6 participants: ODNO officers (Tunisia)

24-28 February 2003

The promotion of foreign investments in the agro food sector

The Italian innovative technology in the Rimini , Ancona ODNO officers (Tunisia) food processing sector: fish processing and vegetables deep-freezing

Study tours and training, 2004 Date

9-16 Septmber 2004

8-18 December 2004

Location

Participating Delegation

Brief description

Bologna

The Italian medicinal and aromatic 9 participants: plants (MAPs) industry . How Bosnian Bosnia & Herzegovina companies could improve their market entrepreneurs opportunities

Bologna

10 participants.

Egyptian producers and The agro food sector in Emilia exporters of fruits and Romagna Region: fresh fruits and vegetables + university vegetables. representatives

43

Partnerships events, 2003 Date

Venue

24-26 March 2003

Tabarka (Tunisia)

21/22 May 2003

Tunisi (Tunisia)

1-4 June 2003

Trapani and Sciacca

21/22 October 2003

Title

Participants

“Tunisian-Italian Partnership Days”

15 Italian companies + 5 representatives of Italian Institutions; 30 Tunisian companies

“Unido-API Partnership Days”

Italian and Tunisian entrepreneurs

Partnerships Days

Italian and Tunisian entrepreneurs

Gabes (Tunisia)

“Unido-API Partnership Days”

Italian and Tunisian entrepreneurs

8/9 December

Tunis (Tunisia)

“Automotive Partnership Italian and Tunisian entrepreneurs Days”

15/16 december 2003

Cairo (Egypt)

Egyptian-Italian Investment Forum

Italian and Egyptian institutions and entrepreneurs

Partnerships events, 2004 Date

Venue

May 2004

Milan

November 2004

Marrakech (Morocco)

44

Title

Participants

Fujan delegation visit to Milan

Italian and Chinese entrepreneurs

Med-Interprise

European and Moroccan companies

Projects completion facility I) Descriptive statistics 1987 - 2004 Projects concluded classified by year

Year

Projects (units)

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Total

2 14 26 18 21 25 26 18 16 18 19 22 28 30 79 34 24 420

Operational projects (1987-2004)

Operational projects (units) Total investment amount (MUS$)

2003

2004

1987-2004

26

27

151

12,57

440,27

68

Operational projects classified by region (1987-2004) Region

Projects (units)

Asia

41

Africa and Middle East

87

Eastern Europe

14

Latin America Total

9 151

45

Number of jobs created classified by year

Year

Projects (units)

Total concluded (MUS$)

Jobs created (units)

1998

19

84,1

1201

1999

22

96,51

2143

2000

28

107,78

1551

2001

30

79,95

1067

2002

79

2821

2003

34

205,87 27,22

2004

24

11,68

865

962

Average project value

Total projects (units) Total amount invested (MUS$) Average project value (MUS$)

Concluded 420

Operational 151

1736,16

440,27

4,13

2,91

Projects promoted across regions and time

Year

Asia (units)

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 TOTAL

356 389 550 171 507 737 1257 507 459 1051 275 826 136 197 197 18 18 7651

46

Africa and Middle East (units) 53 190 437 199 133 286 365 288 428 577 321 249 69 131 342 179 170 4417

Eastern Europe (units)

Latin America (units)

Total (units)

0 0 377 385 672 728 914 282 473 538 31 28 0 0 0 0 0 4428

73 141 437 166 282 380 412 66 172 548 159 68 28 1 20 26 35 3014

482 720 1801 921 1594 2131 2948 1143 1532 2714 786 1171 233 329 559 223 223 19510

Projects under negotiation across regions and time

Year

Asia (units)

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 TOTAL

15 73 16 20 23 35 39 31 6 11 27 16 10 14 15 7 5 358

Africa and Middle East (units) 13 23 11 5 5 4 9 8 7 10 24 34 34 64 71 32 53 407

Eastern Europe (units)

Latin America (units)

Total (units)

0 0 21 21 12 19 21 7 0 0 1 6 2 1 1 0 0 112

4 19 34 34 44 38 12 3 8 16 21 13 13 4 5 2 3 273

32 115 82 80 84 96 81 49 21 37 73 69 59 83 92 41 61 1155

Distribution of projects by status, 2003

Operation al Concluded 8% 10%

Negotiatio n 13%

Promotion 69%

Distribution of projects by status, 2004

Concluded 7% Negotiatio n 18%

Operation al 8%

Promotion 67%

47

II) Investment opportunities promoted during 2003 - 2004

EGYPT MOROCCO JORDAN TUNISIA CHINA ARGENTINA UGANDA Total Project under promotion, 2003 (units)

20

25

82

16

18

26

36

223

Project under promotion, 2004 (units)

26

54

33

13

18

35

44

223

Geographical Distrubution of Projects Under Promotion in 2003

9%

16%

11%

12%

8% 37%

7%

EGYPT MOROCCO JORDAN TUNISIA CHINA ARGENTINA UGANDA

Geographical Distribution of Projects Under Promotion in 2004 12%

20%

23% 16% 8%

48

6%

15%

EGYPT MOROCCO JORDAN TUNISIA CHINA ARGENTINA UGANDA

III) Negotiations assisted by ITPO Italy

EGYPT MOROCCO JORDAN TUNISIA CHINA ARGENTINA UGANDA ETHIOPIA Total Project under negotiation, 2003 (units) Project under negotiation, 2004 (units)

5

12

5

2

7

2

7

1

41

10

20

4

12

5

3

7

0

61

Geographical Distribution of Projects Under Negotiation in 2003 2%

17%

EGYPT MOROCCO JORDAN TUNISIA CHINA ARGENTINA UGANDA ETHIOPIA

12%

5% 30% 17% 5%

12%

Geographical Distribution of Projects Under Negotiation in 2004

5%

11%

16%

8%

33%

20% 7%

EGYPT MOROCCO JORDAN TUNISIA CHINA ARGENTINA UGANDA

49

IV) Concluded projects Projects concluded as of 2003

COUNTRY ARGENTINA

EGYPT JORDAN

MOROCCO

TUNISIA

UGANDA

50

PROJECT NUMBER

TITLE

ARG/002/M/02-03 Chinchilla furs production Certification and quality control of agroARG/008/M/02-05 industrial products EGY/275/C/02-10 Glass Jor/103/J/01-03 Olive oil mill Jor/178/J/01-09 Production of drip irrigation Jor/197/J/02-02 Metal containers manufacturing Expansion of an ice-cream production Jor/249/J/03-06 plant Establishment of a new crackers Jor/250/J/03-08 production plant MOR/014/R/01-11 Agro-food MOR/042/R/02-05 Textile MOR/043/R/02-05 Textile MOR/061/R/02-06 Construction material MOR/071/R/02-06 Chemical MOR/072/R/02-06 Chemical MOR/082/R/03-01 Textile MOR/098/R/03-01 Medical MOR/099/R/03-01 Chemical MOR/102/R/03-02 Textile MOR/103/R/03-03 Construction material MOR/104/R/03-02 Chemical MOR/107/R/03-03 Chemical MOR/108/R/03-02 Construction material MOR/119/R/03-05 Construction material MOR/124/R/02-07 Agro-food MOR/131/R/03-11 Agro-food TUN/067/T/02-12 Marble TUN/206/T/02-03 Marble TUN/208/T/03-03 Marble Tun/223/T/03-04 Cosmetics production Tun/220/T/03-04 Asphalt production UGA/003/M/99-06 Tannery and leather improvement Crocodile skins for the European UGA/062/K/02-03 market UGA/083/K/02-07 Wood processing UGA/102/K/03-04 Photograph processing

TOTAL INVESTMENT MUS$ n.a

JOBS CREATED n.a

2,50

5

2,30 1,09 0,76 1,50

n.a.

9 15 15

0,98

20

1,37

15

0,63 0,57 0,50 0,18 0,14 0,20 n.a.

1,30 1,11 0,65 2,00 1,75 0,36 0,93 0,84 0,13 0,40 0,20 1,40 1,80 0,18 1,30 0,06

48 4 15 15 8 7 n.a.

21 28 35 201 34 18 71 14 13 60 18 22 49 7 130 15

0,03

20

0,03 0,02

25 5

Projects concluded as of 2004

COUNTRY PROJECT NUMBER ANGOLA CHINA

ANG/001/I/04-11

TITLE Processed meat

CPR/044/M/03-09 Integrated welding project CPR/057/M/03-11 Vitamin k3 CPR/056 /M/04-03 Leather clothes making CPR/001/M/04-02 Machines for shoes

JORDAN

TUNISIA

JOBS CREATED 60

2,15

30

6,8

57

6

37

8

305

3

14

jor/255/j/03-11

Production of hydroponics lettuce

jor/262/j/03-12

Soil amendment – slow release fertilizer

0,48

19

jor/269/j/04-04

Establishment of white cement factory Black cumin oil production

1,6

30

0.28

6

MOR/097/R/03-01 Agro-food MOR/100/R/03-02 Construction material

0,42

43

0,3

21

MOR/134/R/03-12 Chemical MOR/135/R/04-01 Paper

0,7

8

0,2

3

MOR/170/R/04-04 Textile MOR/171/R/04-05 Plastic

0,3

10

0,6

25

MOR/195/R/04-05 Textile MOR/201/R/04-09 Agro-food

0,3

15

6,8

24

MOR/205/R/04-09 Automotive MOR/211/R/04-09 NTI

0,34

8

0,17

4

MOR/212/R/04-12 Construction material Tun/231/T/03-10 Marble masonry

0,2

12

0,2

12

Jor/303/J/04-07 MOROCCO

TOTAL INVESTMENT MUS$ 9

Tun/236/B/03-12

Electric terminals manufacturing

0,25

77

Tun/239/B/04-03

Clothing manufacturing

0,3

15

Tun/271/T/04-11

Cork manufacturing

0,6

30

51

V) Operational projects Projects in operation as of 2003

COUNTRY PROJECT NUMBER JORDAN

Jor/047/J/99-10 Jor/060/J/00-12

52

0,15

Olive oil mill

1

Jor/086/J/01-02

Olive oil mill

0,2

Jor/098/J/01-03

Olive oil mill

0,3

Jor/102/J/01-02

Olive oil mill

0,022

Jor/140/J/01-05

Expansion of marble & granite production

0,437

Jor/145/J/01-04

Olive oil mill

0,32

Jor/166/J/01-06

Olive oil mill Production of marble & granite slabs and construction stones

0,2 0,14

Jor/173/J/01-08

Marble & granite processing

Jor/195/J/01-12

Medicine production

Jor/201/J/02-02

Olive oil mill

2

Jor/206/J/02-03

Olive oil mill

0,4

Jor/211/J/02-02

Olive oil production

1,5

Jor/221/J/02-06

Establishment of olive oil mill

Jor/223/J/02-07

Olive oil mill

Jor/229/J/02-10

0,62

TUN/082/T/02-01

Olive oil mill Expansion of Plastic Extrusion Plant of Plastic Diary Containers Plastic manufacturing

TUN/093/T/02-02

Plastic manufacturing

0,55

TUN/115/T/02-04

Electronic components

0,9

TUN/118/T/02-04

Clothing manufacturing

0,22

TUN/199/T/02-10

Glass manufacturing

50

TUN/156/B/02-07

Electric components

1

UGA/088/K/02-08

Exporters of certified organic fruits and vegetables

Jor/231/J/03-01

UGANDA

Production of conical drum Upgrading and diversification of cheese and mozzarella production

TOTAL INVESTMENT MUS$ 4

Jor/067/J/01-01

Jor/169J/01-08

TUNISIA

TITLE

0,4 0,143

0,305 0,5 1

1,7

0.50

Projects in operation as of 2004 TITLE

COUNTRY PROJECT NUMBER JORDAN

MOROCCO

TUNISIA

UGANDA

TOTAL INVESTMENT MUS$ 1,09

Jor/103/J/01-03

Olive oil mill

Jor/170/J/01-08

Production & cutting of marble

0,25

Jor/222/J/02-07

Production of flexible packaging

0,10

Jor/228/J/02-10

Expansion of dimension stone processing plant

1,02

Jor/247/J/03-06

Handloom

0,03

Jor/249/J/03-06

Expansion of an ice cream production plant

0,07

Jor/250/J/03-08

Establishment of a new crackers production unit

1,37

MOR/002/R/01-07 IMME MOR/012/R/01-11 Medical

0,87

MOR/013/R/01-11 Textile MOR/015/R/01-11 Chemical

0,24

MOR/016/R/01-11 Construction material MOR/017/R/01-11 Chemical

0,32

MOR/019/R/01-12 Chemical MOR/020/R/02-01 Agro-food

1,43

MOR/038/R/02-04 IMME MOR/090/R/02-08 Chemical

0,61

TUN/236/B/03-12

Electric terminals manufacturing

0,25

TUN/231/T/03-10

Marble masonry

0,20

TUN/237/B/04-01

0,20

TUN/223/T/03-04

Stone extraction and masonry Cosmetics production

TUN/220/T/03-04

Asphalt production

1,00

UGA/003/M/99-06 Tannery and leather improvement UGA/062/K/02-03 Crocodile skins for the European market

0,06

0,63 0,83 0,75 0,30 0,61

0,25

0,03

UGA/083/K/02-07

Wood processing

0,03

UGA/102/K/03-04

Photograph processing

0,02

53

Institutional support programmes carried out during 2003 and 2004

COUNTRY

EGYPT

ARGENTINA

TITLE

BRIEF DESCRIPTION

“Financial Incentive Scheme” in favour of the local industrial sector investing in environmental sound projects Argentina Guarantee Scheme.

Proposal for the establishment of pilot programme to design a mutual guarantee fund in Argentina Private Equity Bahrain

Technical assistance requested by the EEAA (Egyptian Environmental Affairs Agency), to better allocate EPF resources.

BAHRAIN

BALKANS

Cooperation with UNIONCAMERE VENETO EPF-EEAA environmental fund

EGYPT ITALYEMERGING COUNTRIES

TUNISIA

TUNISIA

ARGENTINA, CHILE

Med Countries

54

Rating of cooperation projects

Agreement with Sviluppo Lazio, and within the framework of decentralized cooperation activities Agreement with Sportello Veneto, within the framework of decentralized cooperation activities Internationalisation of SMEs in South America Collaboration with ART in Mediterranean countries

The leading idea was to provide the Argentinean productive system with a pilot scheme of a mutual guarantee mechanism (the Fund) in favour of local SMEs needing short term financing (export, working capital) and medium term loans (investments).

Implementation of contents and recommendations relating to the establishment of a Private equity facility by a Bahraini development bank for SMEs. Identification of possible area on which the ITPO might support UNIONCAMERE VENETO in emerging countries where the entity is engaged Technical Assistance to the EPF-EEAA, in order to envisage alternative way to use public funds. Definition of a framework agreement.

Drawing of the joint document “La valutazione ed il rating integrato nei paesi emergenti. Una riflessione” Negotiation of an agreement of collaboration in Tunisia for joint promotion activities

Negotiation of an agreement of collaboration in Tunisia for improving joint promotion activities

In collaboration with Regione Lombardia, the project will aim at promoting business linkages between Italian SMEs and Argentinean/Chilean SMEs. Negotiation of an Agreement of collaboration for implementing Joint activities and coordinating programmes