Guarantees

Providing credit solutions to unlock the potential of local capital markets and finance sustainable infrastructure in low-income countries in Africa and Asia.

We offer long-term guarantees that remove obstacles for investors and lenders, both international and domestic. Typically issued in local currency, our guarantees help unlock the loans and bonds needed for essential infrastructure projects. The credit ratings for this solution, GuarantCo, are A1 Moody’s and AA- Fitch, which enable us to leverage the equity from our funders through three-fold blended finance.

Working together

We work largely with private sector borrowers to provide guarantees of between USD 5 and 50 million for a single transaction, with a maximum tenor of 20 years. In certain circumstances we may also support municipalities, sub-nationals and parastatals.

We have a local currency focus to build capacity in local capital markets, however we can operate in hard currency in fragile and conflict-affected areas.

We provide a variety of credit solutions and build bespoke structures to suit the unique requirements of infrastructure projects across many sectors.

For our products we charge a combination of upfront, guarantee and monitoring fees.

We have a limit on guaranteeing of up to 50 percent of the long-term debt position of a company’s balance sheet. Typically, pari-passu security is required alongside all other senior debtors.

Guarantee benefits

Financiers

Can be partial or 100% over a loan or bond to enable financiers to effectively manage risk.

Efficient capital treatment for long dated transactions.

Build capacity in sustainable long-term finance using myriad types of financing solutions.

Borrower / Issuer

Positive signalling.

Access new pools of capital (e.g. local currency loans and bond markets).

Enhance overall return on investments.

Suppliers

Offer more flexible terms.

Opportunity to accelerate mobilising of projects whilst capital is being finalised.

Risk mitigating counterparty risk in event financing is extended.

Types of guarantees

I’ve reworked and removed ‘local currency’ as there are examples of both local/hard currency in each type of guarantee and this is a separate conversation already addressed in the existing copy on the page.

Credit guarantees:

Can be partial or 100% over a loan or bond to enable financiers to effectively manage risk.

Independent power producer
(IPP) guarantees:

Mitigating Power Purchase Agreement (PPA) bankability risk for lenders in providing funding to renewable IPPs.