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bridging asia 2017 TommL/iStockphoto/gettyimages German Banking – Financial Solutions by NORD/LB Asia OBOR Special Plus: Australia P 4 OBOR: One Belt, One Road P 10 How airlines profit from OBOR P 11 Interview with Duravit China P 12 Renewables: fast growth in Australia P 17 Economic Viewpoint Australia P 18 Panamax: creative solutions 2 / Table of contents 4 / “One Belt, One Road” – Connecting Asia Pacific 14 / “Australia has become one of the most promising With the OBOR initiative the Chinese government is seek- markets in the region for project finance” ing new growth while connecting the world economy. Our Sebastian Heddergott from NORD/LB Singapore is an expert report gives you an update on current developments. on Australia and its connection to Asia. In our interview he discusses the potential this market still holds for investors. 8 / “OBOR offers great business opportunities to the shipping industry” 16 / “Australia should be leading the way in solar and storage” An interview with David Beaves, Senior Partner and Head With the Lakeland solar-storage project NORD/LB was of our Hong Kong Office involved in one of the most forward-thinking renewables In our interview Asia-Pacific specialist David Beaves projects in Australia. In our interview Alexander Lenz of gives us an update on the implications of OBOR and what its owner, Conergy, provides the story behind it. it will mean for the world economy. 17 / Economic Viewpoint Australia 10 / “Most airlines support and will profit from OBOR” The Australian economy has grown strongly over the long NORD/LB Aircraft Finance Asia Pacific specialist Wenyu term, and its fundamentals still look positive. An analysis Ting shares her view on the positive developments that by NORD/LB research. OBOR will bring for airlines and carriers. 18 / Panamax: Creative solutions for challenging changes 11 / “Now is the time to continue our investment in China” Slow steaming has changed global shipping. In an in- The German bath equipment supplier Duravit has just novative project NORD/LB helped high-speed Panamax opened a production site in China. Our interview with container ships cope with decreasing demand. Peter Bromberger, Duravit’s General Manager in China, gives more details on this exciting project. 12 / Fast-growing Australian renewables sector NORD/LB has gained a foothold in the booming Australian renewables market, and is benefiting from the unique learning opportunity of being involved in the world’s first utility-scale solar-storage facility. 20 / Splitter news bridging asia / 3 Dear Readers, Welcome to Bridging Asia – NORD/LB’s magazine covering our activities within Asia. We had fantastic feedback from readers after we launched our fi rst issue last year – thank you very much for your support and comments. We will continue to bring you interesting, informative content from the region moving forward. In this issue we focus on two main topics. The first is OBOR – the Chinese government’s One Belt, One Road initiative, which aims to significantly improve the shipping, air cargo and land transport routes to and from China. This NORD/LB is the second-biggest infrastructure investment project ever, after the post-World War II Marshall Plan, and is an important pillar of the industrial giant’s export strategy. We also have a feature highlighting Australia, in which we are excited to share our experiences of a recent deal completed by our energy team. The fi fth continent is closely connected and interlinked with Asia and plays an important role in the region. In our article we look at the rising interest in investing in the Australian renewable energies market, which NORD/LB has been monitoring for a number of years. A collection of attractive incentives, based on political support for a new renewable energy target, has made Australia one of the most promising NORD/LB renewable energy prospects in the Asia-Pacific region. Thank you for picking this up, and happy reading. Yours sincerely, Asia Pacific Management Team Olaf-Alexander Wiedemann Dr. Stephan Popp 4 / Feature Story: OBOR “One Belt, One Road” – Connecting Asia Pacific A special feature on China's ambitious initiative to link the world economy and improve world trade, by Torsten Windels (Chief Economist NORD/LB) and Frederik Kunze (Research NORD/LB) Russia Poland Kazakhstan Belgium France Italy Uzbekistan Greece Kyrgyzstan Turkey China Iran Pakistan Vietnam Malaysia Kenya Sri Lanka Indonesia Source: NORD/LB Silk Road Economic Belt 21st Century Maritime Silk Road Silk Road Economic Belt (SREB) 21st Maritime Silk Road (MSR) // Links China with Central Asia, Eastern and Western // The maritime route goes down China’s east coast, Europe via a land route // Eventually Beijing also plans to connect China with the through the South China Sea and the Indian Ocean, as well as to Africa. Persian Gulf, the Middle East, the Mediterranean Sea // The MSR also focuses on ASEAN countries and South/South-East Asia // It connects ports and builds a new maritime infra- // Besides trade routes the aim is to build economic corridors along “The Belt” structure // Besides trade routes the aim is to build economic corridors along “The Road” bridging asia / 5 Even eight years after the beginning of the global fi nan- Chart 1 The world economy in the slow lane cial crisis the world economy still seems to be asleep, with the growth rates of many industrialized economies remaining below their potential. The European Union, for Source: NORD/LB example, is still dealing with the aftermath of the fi nancial, banking and sovereign debt crisis, and faces many structural challenges. Furthermore, current economic activity has to be helped by abundant market liquidity. In this uncertain environment small and medium enterprises, large corporates and multinationals are all shunning investment and also seem to be refraining from innovation. Additionally, commodity exporters – especially in emerging markets – have to deal with the end of the prices. One major reason for this is the observable slow- Asia Pacific: Driven by middle-class growth, education and technology down in growth in the world’s second-largest economy, As already mentioned, the economic potential and risks with- “commodity supercycle” and consequent low commodity China. Beijing has started the process of rebuilding its in the Asia Pacific region are driven by a range of fundamen- business model, seeking to become a producer of high- tal trends. As well as demographic change and geopolitical technology products and a more domestic, consumption- issues, the rise of the middle class, and the emergence of India, driven economy with a growing service sector. Over the are also trends to watch. Although the characteristics of these long term the Chinese mainland’s demand for resources might be different in each country the macro picture seems is therefore expected to shrink substantially. In this to be quite similar. The most important driver of growth in context intra-Asia dynamics are also losing momentum. the coming decades will be the rise of the middle class and the emergence of consumer markets in Asia. Associated with the Drivers of growth wanted rising middle class, ongoing industrialization and urbanization will drive economic activity. Additionally, the demand As a consequence both trade and industrial production for better-paid jobs will make it necessary for countries to are today growing at a much slower pace than before the climb up the value chain. Furthermore, people living in Asia global fi nancial crisis (see Chart 1). This global environment inevitably raises the question will look for a wider variety of products and services from abroad. Taken together the Asia Pacific region, especially of what the new drivers of growth will be and which will the ASEAN countries, has the potential to become the largest be the growth regions over coming decades. As some of consumer market in the world, and therefore a driver of glob- the once-promising BRICS economies have shown, new al economic activity. Today, the ASEAN members form the regions delivering sustainable growth are hard to fi nd. In third-largest Asian economy and the seventh largest in the this context one major drawback has been that the BRIC world, with a total economic performance of USD 2.6 trillion countries were not a single economic region. You could in 2014. But this development is just the start. Direct invest- also say that a lack of interconnectedness has been a block ment of USD 136 billion in 2014 shows the region’s attractive- on the BRICS economies benefiting from each other. ness for current and future business, while GDP per capita has However, promising growth areas do exist. One good example is the ASEAN region, made up of ten countries that increased by 76% in the seven years between 2007 and 2014. All of this points to a growing middle class in these countries. are focusing on greater economic cooperation. Based on this, a lot of Asian economies might prosper from similar megatrends. Additionally, fears of a hard landing in China have been exaggerated. In fact, one Chinese initiative could even Background: One Belt & One Road (OBOR) – The revival of the Silk Road become a cornerstone for the economic success of the Asia Pa- In 2013 the Chinese president, Xi Jinping, fi rst intro- cific region and beyond. With its huge “One Belt, One Road” (一 duced the idea of OBOR during a visit to Kazakhstan, 带 一路 or “OBOR”) project, China aims to build an infrastruc- mentioning the need for a “New Silk Road Economic ture network that connects China to Europe and Africa. At a Belt” (One Belt). Later the same year in Indonesia, he minimum, these new connections have the potential to act as outlined the “21st Maritime Silk Road.” (One Road). Two a catalyst for economic activity in the roughly 60 countries in- years later Beijing’s plan has met major milestones, with volved, with benefits extending far beyond Asia. What might projects in various countries along the belt and the road be even more important than the China-dominated OBOR having begun. These projects range from the acquisi- project is the fact that numerous economies besides China tion of ports in Europe and building new railroads in also plan to accelerate infrastructure projects to support their Eastern Europe to the construction of highways, gas ambitious growth agendas. To sum up: building connectivity pipelines and even nuclear power plants. Around 60 is key for success in emerging Asia, hence OBOR is far more countries will be impacted by Beijing’s initiative. than an attempt by China to export production over capacity. Macro Micro Strengths Weaknesses Opportunities Threats China’s vision, political willingness and resources Corruption and unstable political situation in some of the countries involved Demand for infrastructure investments in underdeveloped countries Geopolitical risks, e.g. border conflicts, environmental damage Political support from other countries involved Coordination among different countries New markets for sales Conflicts of interest with Japan and USA Young and dynamic population in many countries Time lag due to administrative processes and uncertainties Faster transport of goods and commodities Conflicts about property rights Dependence on creditors Job creation Financial risks Catch-up effects for underdeveloped countries Political dependence of underdeveloped countries Technological development and knowledge of companies involved, such as those from Germany Uncertainty about outcomes Business opportunities for different asset classes (including Shipping, Aviation, Renewables, Infrastructure) Bureaucracy & corruption Productivity enhancement through competition Risk for companies (credit risk, imitation, political risk) Projects can generate additional income for households (higher per capita income) Competitive disadvantage of smaller companies Positive spillover effects on companies Unsurprisingly, the growing economic and political comparative advantages. These might be, for example, influence of China does also have critics. Additionally, lower labor costs, natural resources or their geographic many countries along the Belt and the Road lag behind position. Also, many doubt that OBOR is solely focused on when it comes to economic and political freedoms. Fur- economic activity. Especially within its maritime proj- thermore, potential conflicts with big political and/or ects, China aims to expand strategic bases in countries economic players such as the US, Russia, India, Japan and such as Sri Lanka and Saudi Arabia, which were once the European Union should not be underestimated. These supported by countries including the USA and India. aspects need to be included when assessing the impact of Beijing’s strategy (see SWOT analysis). China has comthree infrastructure funds – the Central Asia-focused OBOR – Consequences for the shipping sector mitted a total of about USD 100 billion to OBOR, through Silk Road Fund (USD 40 billion), the new Asian Infra- Since China’s mammoth OBOR project also includes a mari- structure Investment Bank (AIIB) (USD 50 billion), and time component, it may also reshape the global shipping sec- the BRICS-led New Development Bank (USD 10 billion). tor. Looking at the map above, the Maritime Silk Road (MSR) The modern and efficient infrastructure networks that the OBOR project aims to create will have large economic is designed to connect China’s coast to Europe through the South China Sea and the Indian Ocean. As part of this strat- impact and positive wider consequences. Currently, the egy major sea ports along the Belt and the Road should be majority of the countries involved have underdeveloped connected. Obviously, China is not only focused on trade and infrastructures, low investment rates and, therefore, low expanding production. However, today the sales opportuni- per capita incomes. However, boosting economic activ- ties within the maritime part of the OBOR project seem to be ity with the support of Chinese-financed investment more attractive than the land route. There are a greater num- projects focused on infrastructure such as railroads, ber of countries along the shipping route compared to the highways and pipelines may only create short-term land connection. It also incorporates the already fast-grow- effects. For OBOR to be a success for those countries ing ASEAN economies. In the light of the growth slowdown involved, efforts also have to focus on domestic activity and its different model, Beijing has to find new markets for beyond infrastructure. Decision makers in the coun- products that are “Made in China”. Recently central govern- tries along the Belt and the Road have to focus on their ment decision makers have begun several strategic initia- Source: NORD/LB 6 / Interview bridging asia / 7 tives related to the maritime industry: China is now involved and its interconnections with China, Malaysia could in ports and terminals (such as Port Said in Egypt). Recently be one of the main beneficiaries of the OBOR project Chinese shipping company COSCO bought a 67% stake in within ASEAN. The 21st Century Maritime Silk Road the Greek port of Piraeus. The Port of Singapore Authority is a particular focus for Malaysian decision makers. (PSA) is already a well-known player in European northrange ports. In Pakistan the Gwadar deep-sea port was built • With its National Comprehensive Development Plan 2011-2030, Myanmar aims to attract investments in by Chinese investors. Beyond these projects, Australia will labor-intensive industries and infrastructure proj- also benefit from the MSR as a huge amount of raw materials ects. Myanmar is one crucial partner for China’s will be needed to build all of the infrastructure and produc- OBOR project because Beijing wants to access the tion projects along the route. That is why the MSR initiative Indian Ocean from Yunnan. Hence, it does not come could drive growth momentum for the global shipping in- as surprise that a lot of the OBOR-related projects dustry, which is now suffering from nearly a decade of crisis. already under way are in Myanmar. One example is However, the container sector, which currently has a huge overcapacity problem, will only benefit from OBOR over the the building of a deep-sea port on the Bay of Bengal. • Vietnam’s Masterplan on Economic Restructuring long term. The bulker market could be the first to see poten- (2013-20) mainly focuses on privatizing state-owned tial rising demand as well as project carriers in the multipur- companies. However, Vietnam is also following its pose sector. Investments in terminal equipment and the use Master Plan for Vietnam seaport system development, of capital goods may also benefit this niche. Looking globally which runs until 2020 and aims to improve the infra- at the MSR project, the goal is ultimately to raise China’s structure of its ports. Additionally, the country plans stake in global trade and profits for Chinese companies. Chi- to invest in its airports. With government approval na recently merged two liner companies to create COSCOCS. for the Hon Khoai deepwater port, Vietnam is aim- As part of this, a new dry bulk giant has been launched, in- ing to create an important strategic port, which also tegrating the relevant shipping assets of both partners. Ad- has the potential to attract overseas investment. ditionally, a Chinese consortium has placed orders for mega • Recently, India announced the “Blue Economy Strat- bulkers, which will be delivered in 2018. Once there are egy”, in which Delhi is focusing on cooperation with more details on the impact of the MSR, other shipping-mar- small Indian Ocean states (such as the Maldives, ket participants will be able to plan, and current market Seychelles and Mauritius). India is offering these leaders may be willing to support the project. For example, smaller countries development assistance, while COSCOCS will be part of a new liner alliance from 2017 on. also trying to strengthen links to ASEAN economies. However, compared to China India seems to lack Not only China – Cooperation in Asia is the key for success! substantial capital, infrastructure and technologies. • Thailand holds a strategic position within the OBOR project because it will be ultimately linked to China, Besides the legitimate queries around China’s domi- both through the SREB (via railroad) and the MSR nance of the project, it is also important to question the (such as via the port of Laem Chabang). Furthermore, ability to accomplish the huge task of connecting more the Thai Canal – or Kra Canal – which plans to create than a continent solely through OBOR. In this context, it a shipping route between the Indian Ocean and the is important to note that it is not only Beijing that has South China Sea, is a project with large potential. big plans. Within ASEAN countries, for example, there are also a variety of infrastructure investment projects aiming to improve trade and economic cooperation links. Outlook – Breaking the bottleneck for growth? • Indonesia’s Masterplan for Acceleration and Expansion Combining the OBOR project with country-specific of Indonesia (MAEI) focuses on transport, telecommu- initiatives and Asian megatrends, it can be said that the nication and energy. One major goal is the development bottleneck stopping higher, sustainable growth may of so-called economic growth centers via industrial be broken. Despite the risks associated with such a big clusters and special economic zones. Within this subcat- project and the diversity of the countries involved, the egory the planners aim to connect centers of economic economic potential of emerging Asia might be enlarged growth via roads, ports and airports. Indonesia has also significantly. For this to happen it is vital to build inter- recognized the advantages of international trade logis- connectedness between the economies involved. This tics and aims to establish international hubs by opening could do more than help the global shipping industry. up to international partners. One very important goal Despite other political, more nationally oriented discus- is further integration with the various ASEAN markets. sions in the US and several European countries, they • Already in 2010, Malaysia launched its Economic are all waiting for a growth stimulus from the global Transformation Programme (ETP), aiming to achieve market. Although some caution is warranted, rising the status of a high-income economy by 2020. With its economic activity in the countries along the Belt and the open economy focused on trade, especially exports, Road could also prove to be a catalyst for global growth. 8 / Markets “OBOR offers great business opportunities to the shipping industry” Ince & co An economic view on OBOR by David Beaves, Senior Partner and Head of the Hong Kong Office of Ince & Co. One Belt, One Road (OBOR) has been Peninsula Corridor; the China-Paki- described as the biggest economic stan Corridor; and the Bangla- potentially provide a cheaper, faster event of the 21st century. What is it all desh-China-India-Myanmar Corridor. method of transport compared with traditional shipping. about and what are the implications for the world economy in general, and shipping industry, as they can From your perspective what is most the shipping industry in particular? important when looking at OBOR? How can the world economy profit OBOR was introduced with five major Four major sectors should benefit from this significant project? goals: to achieve policy coordination from the initiative: infrastructure, As previously mentioned, OBOR across the OBOR countries; to financial, and professional services; should not be looked at as a single increase trade flows; to improve advanced manufacturing; and entity. Rather, it comprises many investment flows; to promote transport and logistics. However, we significant infrastructure, technology financial integration; and to foster must be careful not to look at OBOR in and financial projects. Each has the better relations between those living a vacuum. It did not simply begin in potential to benefit the world economy. in the OBOR nations. The OBOR 2013 – instead, it is a concept that Apart from immediate financial initiative covers over 60 countries, builds on previous Chinese efforts to returns, we should also bear in mind which account for 60% of the world’s connect with the world. As the OBOR that such projects can substantially population and have a collective GDP initiative involves a lot of infrastruc- raise local living standards, which in that is equivalent to 33% of the world ture construction, many of the turn benefits the economy. economy. To deliver the policy, the necessary raw materials for these OBOR initiative plans six economic projects will be transported via ships, corridors outside China: the New leading to a direct impact on the have already begun to support the Eurasian Land Bridge; the Chi- shipping industry. However, the maritime part of OBOR? Which specific infrastructure projects na-Mongolia-Russia Corridor; the multiple railway networks currently China has financed many ports that China-Central Asia-West Asia being built in the various corridors provide the capacity to support the Corridor; the China-Indochina might provide competition for the Maritime Silk Road. One key example bridging asia / 9 that demonstrates the effect of the around 200 vessels a day (60,000 per unlock economic growth. There will definitely be more emphasis on infrastructure projects is Pakistan’s year) pass through the Malacca Gwadar port. This helps the China-Pa- Straits, making it extremely congest- previously internally focused kistan Economic Corridor and aims ed. At the same time, the building of countries such as the Philippines and to link northern Pakistan and the Thai Canal may potentially Indonesia. The OBOR initiative will western China to a deep-water disrupt Singapore’s maritime trade also increase existing trade between seaport. The expanded port will be dominance. On an economic level, the China, Southeast Asia and Europe. made a free-trade area, and overall Kra Canal would open up new this special economic zone is opportunities for the countries Would there be any implication on expected to employ approximately located close to the new route, specific shipping-asset classes? 40,000 people, with construction including Myanmar and Vietnam. We anticipate larger ships passing beginning in June 2016. Another is from Europe to East Asia, especially the transfer of a 67% stake in the Focusing now on the shipping after the completion of the Thai Greek port of Piraeus to COSCO. The industry, what are the implications Canal, which permits much larger plan is to make Piraeus the biggest and opportunities, based on the ships than the existing Malacca transit port in the Mediterranean, industry’s current situation? Straits, where the size of vessels is given its proximity to the Suez Canal, Without a doubt, OBOR offers great limited to a maximum length of with COSCO looking to use Piraeus as business opportunities for the 400m, beam 59m and draught 14.5m. a transshipment hub for Asian shipping industry. The sector will exports to Europe that arrive on generally benefit from better port container vessels from China. and inland infrastructure in Asia, as implemented successfully – which well as seeing economic development shipping-asset class do you think will Finally – assuming that OBOR will be One specific project often mentioned spread more evenly across the benefit the most from the project and is the Thai Canal. What is the current non-OECD countries, leading to therefore be a worthwhile long-term status of the project and what would improved transport services. Compa- investment? be the consequences – for instance nies can take advantage of new routes I would hedge my bets and say dry what would be the impact for the to market to sell products and bulk carriers, especially given the Strait of Malacca? services more cheaply and efficiently amount of money being spent on So far, no official announcement has to other economies due to shorter constructing gas pipelines and other been made on the creation of the Thai routes. For example, the Chongqing to energy projects involving renewable Canal, also known as the Kra Isthmus Duisburg freight railway has cut energy, coal and LNG. Given that the Canal. Previously Chinese leaders transport times down from five trend in the industry is towards have come to view the Straits, espe- weeks to 12-13 days. Further, with larger vessels, I would not anticipate cially the Malacca Strait, as a strategic more investment in infrastructure, that small bulk vessels would be best vulnerability ,with former President such as the enormous US$3 billion placed to take advantage of this Hu Jintao articulated this anxiety in coal-fired power plants in Pakistan, increasing volume. Multipurpose what he called the “Malacca Dilemma”. increased coal imports from South vessels could also have a significant There are now signs that plans to Africa and Indonesia will eventually role to play. Additionally, given the build the Thai Canal are being be required, which in turn means huge amount of infrastructure resurrected. An MOU was reportedly new opportunities for shipping. development envisaged by the maritime road, semi-submersible ves- signed between China and the Thailand Infrastructure Investment Do you foresee any changes to sels would also be in demand for Development Company, which stated current trade patterns and the construction support and heavy that construction of the canal would structure of the shipping industries lifting. That said, all these plans have cost US$20 billion and take 10 years. in Asia and around the world? to crystalize and, thankfully, I’m not The impact of such a project would be Trade patterns will definitely change. advising my clients on where to put far reaching. It was reported that it For countries that have previously their money. would not substitute for the Strait of seen their trade capacity constrained Malacca, but rather complement it, by a lack of infrastructure, invest- based on the fact that currently ments in ports have the potential to 10 / Feature Story “Most airlines support and will profit from OBOR” An interview with Wenyu Ting, Aircraft Finance Asia Pacific specialist at NORD/LB. One Belt, One Road (OBOR) is mostly What projects do you expect that discussed in relation to shipping and NORD/LB will be involved in? rail freight, with rail predicted to be Overall, OBOR is a project that aims to key to Chinese connections with stimulate the economy. Germany will Russia and Europe. What role does therefore benefit from the increased aviation cargo play here? demand for high-tech industrial goods. OBOR comprises the historical Land That’s why Germany is regarded as an Silk Route, starting in western China, important trading partner for China. and the Maritime Silk Road, which From this perspective, NORD/LB will, began in southern China and reached as an active regional wholesale bank Europe by sea. However, we are now in in China, continue to support its the 21st century and transportation is German customers in every sector. no longer solely by car, train or ship. Additionally, NORD/LB also finances Aviation supplements rail and shipping, Chinese entities, normally around with air cargo providing a fast method assets that are located outside of China. of transporting fragile goods or food. construction projects planned for 2015, 51 strategic projects (totaling NORD/LB Some people call OBOR the second Of the 193 Chinese civil aviation USD$32 billion of investment), directly relate to the OBOR initiative. Marshall plan. What do you think about this? How can they be compared given the fact that OBOR is also a massive stimulus program for the this aims to reduce the pressure of Chinese economy? Is this massive spend going to production overcapacity in China, Both projects are massive investments increase even further? such as in the steel and the cement and serve the interests of the coun- We all know that the Chinese aviation industries. OBOR is the key strategy to tries behind them. The USA needed a market has the strongest growth in help export Chinese goods. It is being recovered Europe on its side against the world. According to IATA’s forecast, supported by the “Made in China 2025” the USSR, and China needs to export China will have 758 million new project, under which the government its over-capacity of goods to its passengers by 2034, bringing its total intends to upgrade standards within neighbors. However, at the end of to 1.2 billion. This massive investment Chinese industry, moving away from Marshall plan, Europe became a free- includes 15 newly built airports and labor-intensive industries, as China is trade area – a development that later 26 airport reconstructions along the no longer a cheap place for production. led to the European Union. As to OBOR, I don’t see any sign from China that it OBOR route, all seen as necessary for will remove trade barriers. China and further growth. As China’s huge rural What role does the Chinese airline area is still underdeveloped, the industry play in this strategy? Will it its neighboring countries will all investment will continue, but in light benefit from OBOR? benefit from the investment – however, of the recent economic slowdown, may Most airlines support, and will profit China will have the largest slice of the not match current levels. from, OBOR, as they can open more cake. What is happening in China to gers to new destinations when new What investment opportunities do support this development currently, airports have been built. The govern- you see in the aviation sector? and how is the government creating ment’s support isn’t just around Aircraft are always a good invest- the foundations for growth? domestic and foreign infrastructure. ment asset, with a stable market The Chinese government has encour- It also includes negotiating landing value. As demand is strong, we expect aged Chinese companies to look rights and a 72-hour visa-free policy continued growth in aviation over outwards for many years. This means for some hubs in western China. routes and transport more passen- the coming years. Both asset-focused investing abroad and entering new and corporate-focused investments markets outside of China. Of course, provide strong opportunities. bridging asia / 11 “Now is the time to continue our investment in China” An interview with Peter Bromberger, General Manager, Duravit China. by end of this year. This will not only boost our worldwide capacity, but also help us to achieve the next level of quality, precision, and efficiency. How are Asian markets developing, and how important are they currently in your overall portfolio? The company's positive growth is due to its market success, particularly in international export territories, such as the USA, the UK, Saudi Arabia, China, and various regions in Asia. China is our largest Asian market. However, business in other Asian countries is also going well and we will continue to focus on further consolidating the position of the Duravit brand with retailers, developers and our Duravit wholesale partners in these markets. You worked on the transacIn Europe, Duravit is known as a meet the highest standards of design high-end supplier of bathroom equip- and quality. Furniture is a key area bank stand out from other po- ment. How has the Chinese market where the trend for greater individu- tential banking partners? developed and what are customers ality can be indulged, both by arrang- At Duravit we were looking for a pre- asking for? What trends do you see? ing different storage elements and mium banking partner like Nord/LB. The bathroom industry is a sector in the choice of finish. Future trends The combination of its comprehensive industry know-how and excel- tion with NORD/LB. How did the with great potential. Over the last few will be influenced by innovative years, international markets have solutions and high-end technologies. lent customer relationship manage- provided us with sustainable growth That includes water saving as well ment makes Nord/LB an experienced based on real demand. However, we as energy saving and environmen- and strong partner. Nord/LB showed always have to bear in mind that global tally friendly production processes. considerable flexibility and was able to offer us a customized solution. trends in the bathroom industry are relatively broad and developments in In 2016 you are going to open a each region are very different. After en- production site in China. What is Which role did the bank’s German tering the market, Duravit China soon the background to this decision? desk in Shanghai play? In what ways became one of the fastest-growing re- In 2012 we adapted our existing was it supportive and helpful? gions within the Duravit Group world- structure to help underpin our The German desk in Shanghai wide. There is a dramatically growing growth and technical progress by added value to our project but was demand from Chinese high-end con- founding Duravit Sanitaryware not central to its success. From a sumers for high-quality, technological- Technology Co. Ltd, our ultramodern language perspective, the German ly up-to-date, well-designed bathrooms, engineering and assembly plant in desk in Shanghai is less important which Duravit meets 100 per cent. Shanghai. Now is the time to continue for Duravit, as all our staff either A key bathroom trend that will not our investment in China and take it to speak Chinese or English. Neverthe- change is comfort in all stages of life. the next level to ensure we increase less, its understanding of the local This means products that enhance our visibility in the marketplace. Our business and of the headquarters’ life in the bathroom; they have to be new production and development work in Germany was tremendous- intuitive to use, easy to clean, and center in Chongqing will go online ly helpful in closing the deal. 12 / Focus country: Australia Fast-Growing Australian Renewables Sector Conergy NORD/LB gains foothold in booming Australian renewables market, and benefits from unique learning opportunity with world’s first utility-scale solar-storage facility. Illustration of Project Lakeland upon completion, courtesy of Conergy NORD/LB has been a pioneer in renewable energy project seeking a slice of this opportunity. In August 2016, NORD/ finance, and since the mid-1990s it has financed over LB gained a foothold in this market, reaching financial 12GW of projects worldwide. Building on its success in close on one of the world’s first large-scale solar-storage Europe and North America, NORD/LB has built up a team projects, working together with German developer and of 10 renewable energy finance specialists to support global leader in solar power Conergy. its clients as they enter the booming Asia-Pacific sector. After years of political uncertainty, Australia has Australia in particular represents a promising market for finally turned a corner and set some of the most exciting renewable energy, and NORD/LB has consequently seen renewable targets and development incentives worldwide. a number of its clients from Europe and North America In June 2015, the Australian government implemented a bridging asia / 13 33,000 GWh Large-Scale Renewable Energy Target (LRET) plummeting from around US$1,000/MWh in 2010 to US$300/ to be reached by 2020. This is equivalent to ~6,000MW of MWh today, and are expected to reach US$120/MWh by 2030. new renewable energy and will require ~A$14.5bn of new Exciting global initiatives to accelerate technology investment. According to the Australian government’s development include STEAG Energy Services’ 90 MW Clean Energy Finance Corporate (CEFC), this is just the storage program in Germany, Edison’s 100 MW facility in start, as it expects Australia’s renewable sector to require Long Beach, California and the National Grid’s tender for around A$100bn in investment in the run-up to 2050. frequency response in the UK. To incentivize development of the sector, renewable projects receive Large Renewable Generation Certificates Australia has also set attractive incentives to drive further innovation and deployment, with ARENA current- (LGCs), currently trading over A$85/MWh compared with ly committing over A$100m of grants to support energy- around $30/MWh in 2015. This is in addition to the whole- storage research and development projects. Additionally, sale electricity market price in a given region. Numerous the ACT government has set a battery storage target of energy utilities and retailers are signing up to long-term 36MW by 2020. power purchasing agreements (PPAs) to help lock in As the standalone business case for storage technolo- revenue streams, typically between A$ 80 – 100/MWh, in gies continues to improve, NORD/LB has been approached some cases reaching grid parity with traditional forms of by numerous clients across its four main global offices energy generation. (Hannover, London, New York and Singapore), all looking Grant-funding support is available from the Australian for a project financing solution. NORD/LB’s first battery Renewable Energy Agency (ARENA) as well as a signifi- storage project, located in Northern Queensland, Austra- cant debt program from the CEFC for large-scale solar. In lia, will certainly not be its last. March 2016 the Australian government established the $1 billion Clean Energy Innovation Fund, which is to be co-managed by ARENA and the CEFC. Individual territory governments and utilities have Project Details: Lakeland Solar & Storage Project, Queensland, Australia also introduced their own incentive measures, such In August 2016, NORD/LB reached financial close on a as the Australian Capital Territory (ACT) government A$42.5m, 13MWp solar PV plant with a 1.4MW/5.3MWh 20-year feed-in-tariffs (FiT). Allocated through a series battery storage facility in the town of Lakeland, Northern of competitive auctions, the aim is to power 100% of the Queensland, Australia. needs of Australia’s capital city of Canberra with renewable energy by 2020. The market response has been overwhelming, with a surge in domestic and international developers, including As one of the first large-scale solar and battery storage projects worldwide, capable of powering 3,000 homes day and night, the project represents a global milestone in the transition to sustainable energy. many of NORD/LB’s clients, seeking to enter the Austra- NORD/LB acted as Mandated Lead Arranger (MLA) and lian market. At the time of writing more than 8,000MW Sole Financier for the project, providing renewable energy of wind and 2,500MW of solar projects are either under structuring expertise and long-term, 15.5-year non-re- construction or under development, of which 12 large- course financing. scale solar projects (totaling 480MW) have been awarded ~A$92m of ARENA grant funding, and 2,000MW of Around A$17.4m of funding was also committed by ARENA to support the project. The plant will conduct a projects have applied for finance from CEFC’s Large-Scale series of battery tests during its first two years of oper- Solar Program. ation and deliver a Knowledge Sharing Program (KSP) overseen by a steering committee including Conergy, Energy Storage – the sustainable energy "Holy Grail" Smoothing out the intermittency of renewable technologies with affordable energy storage solutions is without ARENA, BHP Billiton, Ergon Energy and Origin Energy. Knowledge and experience will also be shared with local universities, thereby building grassroots Australian battery expertise. German solar company Conergy is the project owner doubt the Holy Grail required for a global transition to and developer, and will also act as Engineering, Procur- sustainable energy. ment, Construction (EPC) and Operation and Mainte- The International Renewable Energy Agency (IRENA) estimates that the world needs 150 GW of battery storage nance (O&M) contractor. Conergy is one of the world’s largest downstream solar companies, specializing in to meet its desired target of 45% of power generated from the design, finance, build and operation of high-perfor- renewable sources by 2030, and Bloomberg New Energy mance solar systems. With almost two decades of solar Finance (BNEF) believes the global market for storage experience, it has completed over 1.5GW of capacity could reach at least US$250bn by 2040. across more than 300 projects in more than 15 coun- While there are a range of storage technologies at varying stages of maturity, it’s clear that lithium-ion batteries are going to play a significant role in meeting this target, with costs tries around the world. The project is scheduled for completion in April 2017. 14 / Focus country: Australia “Australia has become one of the most promising markets in the region for project finance” NORD/LB An Interview with Sebastian Heddergott, Director and Head of Corporate Sales Asia Pacific in NORD/LB’s Singapore office. Mr. Heddergott, NORD/LB is active As a bank you were originally suppor- region in order to be part of its success across the entire Asia Pacific region. ting clients from Germany in the story. This means that today NORD/LB What products does Corporate Sales region. Now you have greatly widened is one of the biggest German banks in offer to clients in the region? your range of clients. How did this Asia. As part of our strategy we are The Asia Pacific region is by far the come about? aiming for a wider diversification of most dynamic industrial and trade Although our roots began 250 years our client portfolio. Therefore, zone in the world. We support our ago in northern Germany, our clients aviation finance, structured finance clients across three priority sectors and businesses are very international. and project finance have all become (shipping, aviation and structured The shipping market, for example, is important components of our Asian finance), providing solutions for one of our key industries abroad, and business as well. Our latest strategy is hedging both their interest exposure it grew much quicker in the two Asian to open for corporate business with as well as exposure to all major shipping hubs of Hong Kong and German clients in Singapore, as we currencies. Furthermore, NORD/LB is Singapore compared to Europe and are already doing in Shanghai. active in the money market, dealing the Americas. As a major ship-financ- with short- and long-term deposits. ing bank it was therefore logical to grow disproportionately larger in the / 15 How does your Corporate Sales team uranium, there has been a focus on address the specific needs of NORD/ developing alternative pillars for recent Structured Finance transacti- LB’s clients in the Asia-Pacific market? economic growth, including energy on in Asia Pacific which was tailored The Corporate Sales team has strong and infrastructure. ties to all our origination and credit Can you provide an example of a to meet the needs of your client? A good recent example of such teams. We have frequent discussions We talk about Structured Finance with existing and potential new clients being our biggest instrument in Here we were able to bring German on their strategy, and exchange structuring know-how was in Japan. Australia. Where do you see potential sovereign funding support to a relevant market intelligence between in the market? German-based sponsor, who was our Asian branches, head office and Our Corporate Sales team works in looking to establish a series of solar other foreign divisions. Listening close collaboration with the bank’s photovoltaic (PV) projects in Japan. carefully to our clients is key to Structured Finance division as they We successfully delivered a project- understanding developments and seek to optimize financing packages to financing solution that was financed potential new opportunities. NORD/LB meet the needs of our clients. The via EUR-denominated loans, and covers numerous different industries Australian market is one where NORD/ swapped into Japanese yen (JPY) and has completed a wide range of LB sees opportunities to differentiate obligations through cross-currency different financing structures. Further- itself against local financial institu- swaps, providing material-cost more, having trading capabilities in tions. Our value proposition in the savings to the client. both Asia and Europe helps us to cover Australian market is not in directly both these time zones more efficiently. competing with domestic offerings. What’s next for NORD/LB and Corpo- Instead, we are complementary, given rate Sales in Asia-Pacific? You also offer products and services our structural expertise in the While some industries such as in Australia. What areas do you renewable energy market, which is shipping are facing difficulties, it is operate in and what is different about based on our >12GW of global experi- still the region where new ideas are that market? ence. We can also differentiate from being brought to life most quickly. The As part of our Asia Strategy we are local banks by offering long-term (i.e. focus on China over the last 15 years is constantly looking into new markets, >15 year) financing solutions to understandable given it is the biggest and Australia has become one of the eliminate refinancing risk, which economy in the region, and therefore a most promising markets for project results from the shorter-term (5-7-year) major driver of success or failure. finance in the region. We are dealing mini-perm debt structures that are However, many smaller Asian with very long tenors and, due to the more traditional in Australia. Through countries have open opportunities international nature of the sector our own balance sheet or through our and sustainable growth figures. The (including developers, contractors partner network, we can deliver these "One Road, One Belt" initiative is one and equipment suppliers), involve- long-term financing solutions via ment with cross-currency financing. Australian-dollar (AUD) floating-rate that might be led by China but stretch The volatility of foreign exchange loans plus interest-rate derivatives, over many other countries. rates over those extended maturity AUD fixed-rate loans, or for the more periods therefore needs to be limited. sophisticated client, euro (EUR)- up and currencies that have not been Projects need cashflows to be denominated loans exchanged into freed for trading can tomorrow stabilized, and derivatives such as AUD through cross-currency swaps. become new business opportunities. example of investment possibilities Markets which have not yet opened cross-currency swaps are a suitable Based on preliminary feedback in the The best way to stay ahead of the way to mitigate these risks. Australian market, we hope to replicate curve on new developments is to keep this structure to deliver value to our a close eye on opportunities through Australia has seen continuous growth other clients operating there. a diverse range of clients and for 23 years in a row. How do you explain this astonishing success, and Each of these instruments can be implemented for the right clients in financial partners in so many different countries. do you think it will continue? the Australian market, and we have Australia's strong economic track been able to appeal to them especial- record has been largely underpinned ly by demonstrating our strong new projects in this dynamic market; by its ability to capitalize on its rich knowledge of how project financing and as a Corporate Sales team we will commodity resource, helped by close for renewables has been achieved in continue our regular discussions on ties to East Asian markets, as well as other offshore markets – for example, clients and projects,thereby helping NORD/LB will therefore continue to look out for new opportunities and its strong financial market environ- in Europe or the US. For these clients, ourselves to understand the trade ment. Following the 2008 financial there is a clear value proposition in rationale, markets and client needs to crisis, and subsequent deterioration creating such structures, enabling provide truly tailor-made solutions. in demand and prices for key them to deliver optimal financing commodities such as iron ore and solutions to their projects. 16 / Focus country: Australia “Australia should be leading the way in solar and storage” An interview with Alexander Lenz, President, Asia Pacific at Conergy How does the Lakeland so- so when paired with storage. We are be leading the way in solar and stor- lar-storage project fit into Co- confident that this will be the first of age, given its climate and low popula- nergy’s Asia-Pacific strategy? many Conergy projects in Australia tion. But Australia faces some unique The Lakeland Solar & Storage project and Asia that combine grid-connect- challenges in its electricity transmission and distribution systems due presents a new chapter for the compa- ed solar and storage over the next ny after several years in development. few years. Since Conergy has one of to its size and dispersed population. Australia provides many opportuni- the industry’s most advanced and Utilities have an obligation to provide ties for large-scale solar and storage complete portfolios of solar services reliable power supply to these remote energy solutions due to the immense and solutions, we will aggressively communities, which quite often re- distances between towns, a strong fo- pursue more solar project develop- quires transmission hundreds of kilo- cus on remote mining and resources, meters from the original generation as well as neighboring island commu- source. This difficulty in distribution nities. All of these factors make it a and transmission causes high supply great case study for large-scale solar costs, unreliable power supplies, and power-quality issues, particularly and storage – either on-grid or off-grid. for communities that sit at the edge In terms of the broader Asian of the grid network (fringe-of-grid). market, this utility-scale solar + bat- While the solar + battery storage tery storage solution is particularly relevant to most markets in South technology is already commercially East Asia – as many countries are available to cater for various applications and scenarios, factors such as grid of islands, they cannot be connected support, integration of intermittent to central grids. This forces these embedded power generators, on- and islands to operate expensive fos- off-grid applications, ancillary services sil-fuel-based power generation plants. A utility-scale solar + battery Conergy archipelagoes made up of thousands frameworks and market operation tools, storage solution is a superior way forward as it will provide reliable for frequency control and provision of spinning reserve, updated regulatory ment and finance opportunities, from as well as a lowering of equipment clean energy at a fraction of the cost early-stage investment through to prices are all required to allow for this of traditional generation plants. construction and long-term asset new technology to be more readily in- management, besides our traditional tegrated into commercial solar design. What’s next for Conergy in both solar EPC and O & M businesses. Australia and Asia Pacific generally? What struck you as different The Lakeland Solar & Storage project What were the main challeng- from conventional approach- is set to demonstrate how utili- es you faced when entering es when working with NORD/ ty-scale renewable energy, combined the Australian market? LB’s Structured Finance team? with storage, can be a reliable and Conergy has been active in Austra- We found the NORD/LB team to be stable source of energy that can lia for more than 10 years, but in a extremely knowledgeable about the seamlessly connect into the grid different segment of the business, solar market and the consequent hur- network, providing communities which was significantly support- dles faced in financing solar projects. We appreciated very much that they with power supply during times of ed by government policies. Now grid faults or outages that may be we’ve entered into utility-scale tend to take a pragmatic approach caused by natural disasters or issues PV power plants, in line with our and showed flexibility in structur- further upstream in the network. regional and global strategy. ing a loan agreement with partial Given Australia’s high levels of sun policy to support renewable energy very pleased to see that they shared The lack of a strong and stable merchant exposure. We were also irradiance and vast amount of unin- generation earlier on in this segment a similar motivation as Conergy to habited land areas, it makes a lot of has been a barrier to entering the break into the Australian market sense to embrace solar – even more Australian market. Australia should with a large storage + PV project. bridging asia/ 17 Economic Viewpoint Australia The Australian economy has done well for a really long time. And the fundamentals still look very good. An analysis by NORD/LB research. • Exports are very important to the Australian economy, meaning that further economic integration across the Asia Pacific region would deliver clear benefits. However, currently Australian exports seem to be overly dependent on China. In this context the rising share of exports to ASEAN countries, as well as to the US and India, have to be seen as a positive step towards a more diversified structure. • Unsurprisingly, the main focus of Australian foreign economic policy is on creating bilateral free-trade agreements (FTAs), especially those that remove agricultural duties and export subsidies in order to provide Australian agricultural products with access to overseas markets. NORD/LB • There certainly are some risks for the Australian economy. Slower growth in China could become a problem, meaning that investors should closely monitor economic activity in the Australian commodity sector to ascertain potential risk. In contrast, Torsten Windels, residential construction could be a bright spot of the economy moving forward. Chief Economist NORD/LB • Central bankers in Sydney seem to be quite confident that lower interest rates will support economic growth within Australia. The somewhat-weaker Australian dollar (AUD) will also help. However, it is important not to overestimate the impact of this devaluation on Australian exports. • Inflation is not currently a problem, although rising house prices could change this. However, Reserve Bank of Australia (RBA) officials seem to believe that the inflation risk from the real estate market has diminished recently. • In August the RBA decided to cut the cash rate by 25bps, putting some pressure on the AUD. Central bankers in Sydney plan to improve the growth prospects of the Australian economy by lowering short-term interest rates. Essentially, monetary policymakers have recently started to fear downside risks to the economy "Down Under". Further easing in 2017 therefore seems to be likely. The RBA will probably prefer to use a combination of rate cuts and unconventional monetary-policy measures to manage risk. Major export destinations of Australian products China Japan ASEAN South Korea EU-28 USA India 0 2014/2015 2013/2014 10 20 30 40 Source: Australian Bureau of Statistics NORD/LB 18 / Deals Panamax: Creative solutions for challenging changes Slow steaming has changed global shipping. In an exciting project NORD/LB helped high-speed Panamax container ships cope with decreasing demand. Current tonnage overcapacity means that the overall point of being the largest ships capable of passing shipping industry has been in a critical financial situa- through the old canal. tion for several years. Shipping operators are therefore NORD/LB has a long track record of generating under immense pressure to reduce operational costs creative, tailor-made solutions for its clients – be it in where possible. These include methods such as slow Germany, Europe or Asia. In a recent project NORD/LB steaming to reduce fuel costs or delivering greater econ- supported an innovative and technically sophisticated omies of scale by reducing unit costs (i.e. lower costs per Panamax container ship conversion concept implement- TEU or ton) by phasing larger-size vessels. At the same ed by our client, NSB Niederelbe Schiffahrtsgesellschaft time the industry faces a significant change in trad- mbH & Co. KG in Buxtehude, Germany (NSB). NSB antici- ing patterns due to the recent opening of the widened pated the massive change in the shipping industry’s re- Panama Canal, which means that much larger ships can quirements in today’s market – especially the decreasing now pass through it. However, this development has demand for the classic Panamax container ship design had a considerable impact on classic Panamax contain- and the urgent need to significantly reduce operational er ships, which have basically lost their unique selling costs – and thus developed a unique technical solution. bridging asia / 19 portfolio and expertise in retrofitting ships, giving them a new lease of life. Through the project, the vessels were successfully converted from ca. 4,900 TEU to ca. 6,300 TEU. Additionally, the three new wide-beam-like designs are much more fuel efficient due to improved flow conditions, and thus could all attract a fully debt service-covering, long-term charter with one of the world’s top container lines. In turn, this led to a material improvement of the borrowing entities’ financial situation. Conversion costs: the cost of the widening was $10 million per vessel, or $30 million in total. Financing for the project was shared equally, with NORD/LB providing new financing for 50% of the total cost, and the remainder provided by investors, who were attracted by a convincing (equity) story based on the conversion concept. After widening, all three ships offered lower unit costs through their higher load capacity and higher fuel efficiency due to the new design, meaning they can now successfully NORD/LB compete with state-of-the-art ship designs in their class. NSB’s patented ship-widening concept Award-winning project NSB received an award for the best maritime industry inno- From 2005 to 2007 NORD/LB financed three 4,900 TEU vation of 2015 at the European Marine Engineering Confer- classic Panamax container ships for NSB. At the time these ence in Amsterdam. In June 2016 Marine Money Internation- were state-of-the-art, high-speed Panamax designs with a al gave NORD/LB the 2015 wild card deal of the year award comfortable, 3.5-year, debt service-covering charter attached for the financing of the project. as non-recourse project finance. Due to the very challenging environment, all three borrowing SPCs had to cope both with very weak charter markets and a sustainable slow-steaming environment after the expiry of their initial charters. This led to a gradual deterioration of the borrowing entities’ financial situation and finally a very severe liquidity situation. So, how to tackle the problem? To solve the issue, as well as to increase the overall competitiveness of these ships, NSB developed its innovative and patented ship-widening concept. Despite the obviously large technical risks, the widening of a Panamax container ship was successfully achieved for the first time through strong collaboration between all the parties involved in the project. Higher load capacity and significantly increased fuel efficiency Widening involved docking each of the vessels, cutting it into four parts, separating each part, inserting pre-fabricated new segments, each made of 4,200 tons of steel, and finally re-assembling all of the components. The conversion included fitting the vessels with a bulbous bow more suitable for slower, optimal speeds, as well as a new, improved propeller. To carry this out the ships were brought to the drydock of China’s Huarun Dockyard (HRDD) and complete- in the areas which undergo the least mechanical stress. The widening also helped NSB to enlarge its already-strong NORD/LB ly cut open, from prow to stern. Developed in 2013, NSB’s unique, patented concept is based on cutting the ship open 20 / Splitter news Sandra Reich joins German Desk Former board of management of Hamburg and Hanover Stock Exchange joins NORD/LB In August 2016, Dr. Sandra Reich joined NORD/LB’s Singapore branch as Head of German Desk, Singapore. Her appointment is part of the bank’s strategy of focusing on its core purpose – assisting German companies doing business within Asia. NORD/LB is in the process of expanding its SME businesses with German companies in Asia. The Singapore branch acts as a competence center in Asia-Pacific outside China for the company’s credit and financing business with include project financing in energy and infrastructure, ship and aircraft financing, and corporate and market sales. With a staff of 80 at the Singapore branch, as well as 20 NORD/LB NORD/LB’s German SME clients. Further key business areas employees in Shanghai, NORD/LB is the leading German Landesbank in Asia. Jia Wei Toh joins Credit Asset Management Unit First member of newly formed Credit Asset Management unit joins. NORD/LB is working to become a provider of credit-based investment products, specifically alternative assets. A key pillar in this strategy was the establishment of the Credit Asset Management (KAM) unit, which was launched last October. KAM functions as a group-wide competence center, responsible for the marketing of alternative assets to institutional clients, as well as having active control After joining the Singapore branch as a director in October 2016, Ms Jia Wei Toh is the first KAM team member on the ground in Asia Pacific. With more than 10 years of experience, she was previously at ANZ, working on the loan syndications team, where she was responsible for the execution and distribution of primary syndicated loans, ranging from corporate loans to structured project/asset finance and M&A transactions in South and Southeast Asia, as well as in the Middle East. Before ANZ, Jia Wei was with DBS, where she supported the execution and distribution of loan transactions across multiple countries and industries. NORD/LB and optimization of NORD/LB's credit book. bridging asia / 21 12 May: New Singapore branch officially opens NORD/LB’s representative office in Singapore has served as a regional hub since it opened in 1994. Since then NORD/LB has seen enormous growth within On May 12, 2016 the new office was officially opened. Asia. This trend accelerated further after 2013, when the Approximately 80 Singaporeans, including regional bank expanded in its core business segments of aviation clients and partners, attended the reception. Special finance, shipping finance, renewable energy finance, guests were Dr. Michael Witter, Ambassador of the Federal Republic of Germany to Singapore, and Dr. Gunter Dunkel, region. To complement this growth NORD/LB has invested Chairman of the Management Board & Group CEO of in Singapore, recently relocating to new offices within a NORD/LB, who both made speeches, celebrating the move building which matches our sustainable business ideals. and the bank’s success in the region. NORD/LB German corporates and markets, and corporate sales in the Lower Saxony delegation visits Singapore branch In August state secretary Daniela Behrens paid a visit to NORD/LB's Singapore branch. The Ministry for Economics, Labour and Transport of NORD/LB’s Singapore Branch was honored to host a lunch Lower Saxony and the Hannover Chamber of Industry and and presentation for the delegation at its office. The Commerce organized a trade delegation to Indonesia and delegation’s theme and mission were, "How to successfully Singapore between August 21st-27th. Daniela Behrens, establish business in Singapore/the ASEAN region" , and State Secretary at the Ministry, was accompanied by the event covered current developments of Singapore’s politicians from the Lower Saxony state parliament, port and opportunities in autonomous driving. Members representatives of chambers of industry and commerce, of the German Embassy in Singapore and the Singapore and executives from companies based in Lower Saxony. German Chamber of Commerce also attended the lunch. 22 / Splitter news Annual Oktoberfest Celebration NORD/LB Singapore branch celebrates traditional German beer fest. seminar at its office. A total of 125 clients from Shipping, Oktoberfest celebration held at Paulaner Bräuhaus Aviation, Structured Finance, German Desk, Corporate Singapore, NORD/LB’s Singapore branch held a Markets Sales and Markets Sales joined us for the evening. NORD/LB On September 30, 2016, in conjunction with the annual NORD/LB – a global leader in renewable energies It is now official: NORD/LB Norddeutsche Landesbank ranks among the world's leading institutions when it comes to financing renewable energy projects. A new index compiled by the prestigious international trade NORD/LB has been active in the financing of renewable en- publication IJ Global – Project Finance & Infrastructure Jour- ergy projects since the early 1990s, taking a pioneering, lead- nal places NORD/LB in fourth place worldwide in the "Mandat- ing role very early on in the sector’s growth. It announced ed Lead Arranger Renewables" category. Twenty-fifteen saw in 2015 that its financing volume in renewable energies had NORD/LB take the role of mandated lead arranger (MLA) in 41 grown by around 27 percent to EUR 8.2 billion within the transactions, with a total financing volume of USD 1.9 billion. last three years. At 73.5 percent, wind energy accounts for MLA refers to those banks with lead responsibility for struc- the majority of the financing operations, with solar energy turing and arranging the syndicated financing of a project. making up a further 15.5 percent. Imprint Bridging Asia German Banking – Financial Solutions by NORD/LB Asia Publisher Norddeutsche Landesbank - Girozentrale 138 Market Street CapitaGreen #36-03 Singapore 048946 Responsible for the editorial content Olaf-Alexander Wiedemann Dr. Stephan Popp Concept & editing Westend Medien GmbH Wagnerstraße 26 40212 Dusseldorf Dr. Michael Siemer Picture editing & graphics Sebastian Michailidis This magazine has been printed on paper that has been certified in accordance with the criteria of the Forest Stewardship Council® (FSC®). Disclaimer The content of this magazine has been researched and collated with the utmost care. However, NORD/LB accepts no liability for the correctness, completeness and topicality of the information supplied by Bridging Asia. The mere use of the content of this magazine shall not give rise to any contractual relationship between the user and NORD/ LB. The statements made in the magazine are no substitute for advice on a specific case. / 23 Your Northern Gateway into Germany ‘ With a history dating back over two centuries, NORD/LB is one of Germany‘s top banking groups in terms of diversified access to funding sources and a flourishing domestic capital markets franchise. Combining general retail and specialist wholesale focus into a successful business model for the German Landesbank sector, NORD/LB is honoured to have helped a growing share of premier covered bond issuers worldwide to deepen their distribution in the largest fixed income investment market of the European continent. www.nordlb.com