GuarantCo · EAIF provides long-term, mainly對 hard currency loans in Africa whilst GuarantCo offers local currency guarantees to banks and bond investors. We are a contin\൧ent
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Enabling long-term infrastructure finance in local currency Quarter 2 2019 GuarantCo
Enabling long-term infrastructure finance in local currencyQuarter 2 2019
GuarantCo
Who we are
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Our owners
GuarantCo is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden through the
PIDG Trust and the Netherlands, through FMO and the PIDG Trust.
Presenter
Presentation Notes
We are funded by five governments. UK is the largest funder (80%). The Dutch government invests through the FMO whilst the other governments invest through the PIDG Trust.
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Our fund managerCardano Development
Cardano Development took over management of GuarantCo in May 2016.
Committed to helping frontier economies develop and prosper by introducing innovative financial risk management products and services to make people and businesses active in the local real economy more resilient and protected against risk.
Focuses on developing innovative financial risk management solutions that are practical and can be scaled-up.
Cardano Development Group has incubated and grown the following funds:
TCX contributes to reducing currency risks by hedging these risks in frontier markets.
Frontclear provides guarantees to enhance (interbank) collateralised trading in frontier economies.
ILX is a frontier market credit solution fund to provide investors with cost-effective access to syndicated DFI-loans and support DFIs in mobilising private capital.
BIX Capital stimulates the use of impact certificates for essential household products in developing countries.
The Water Finance Facility mobilises domestic investment into climate compatible water sector projects through the local bond market.
Presenter
Presentation Notes
The Cardano Development Group took over management of GuarantCo in May 2016. The Group has incubated and grown a number of funds which are all very specialized and diverse: TCX contributes to reducing currency risks by hedging these risks in frontier markets. Frontclear provides guarantees to enhance collateralized trading in frontier economies. BIX Capital sells household appliances, mainly in Kenya and Nigeria, pre-funding carbon credits. ILX improves the functioning of development finance by creating a managed investment vehicle to assist institutional investors to participate in development finance. They are funded by the Dutch pension funds. The Water Finance Facility is fully funded by the Dutch government. They will provide a bond in Kenya for pension funds to fund water facilities and are currently looking to expand to other countries in Africa and SEA. The focus is on developing innovative financial risk management solutions that are practical and can be scaled-up.
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Where GuarantCo fits in the Private Infrastructure Development Group
OperationConstructionEarly stage development
Technical assistanceTAF grants support PIDG companies at any stage of the project lifecycle.
DevCo helps fund PPP advisory services to governments, delivered through the World Bank Group’s IFC.
Concept
Technical Assistance Facility (TAF)
DevCo
The Emerging Africa Infrastructure Fund (EAIF)
GuarantCo
Project preparationInfraCo Africa and InfraCo Asia originate, develop, structure, invest and manage projects. They can make equity investments in innovative and pioneering projects, or to remedy the absence of capital.
Debt, guarantees and mezzanineEAIF provides long-term foreign currency loans in sub-Saharan Africa.
GuarantCo provides local currency guarantees to banks and bond investors to develop capital markets.
Financial close Commercial operation
Able to hold equity stakes during construction and operationInfraCo Africa
InfraCo Asia
Presenter
Presentation Notes
GuarantCo is part of the Private Infrastructure Development Group as are the Technical Assistance Fund (TAF), DevCo, InfraCo Africa, InfraCo Asia and the Emerging Africa Infrastructure Fund. Different companies are involved in the various project stages from concept to early stage development, construction and operation. Technical assistance is provided by the TAF and DevCo. TAF grants support the work of PIDG companies at any stage of the cycle including feasibility studies and viability gap funding. DevCo helps fund PPP advisory services to governments delivered through the World Bank Group’s IFC. The two InfraCo’s, Africa and Asia, manage the project preparation. They originate, develop, structure, invest and manage projects. They have the ability to make equity investments in innovative and pioneering projects or to remedy the absence of capital. Debt, guarantees and mezzanine is managed by both the Emerging Africa Infrastructure Fund (EAIF) and GuarantCo. EAIF provides long-term, mainly hard currency loans in Africa whilst GuarantCo offers local currency guarantees to banks and bond investors. We are a contingent credit solutions facility and mainly invest in local currency which makes us unusual as it is more difficult to do. In certain instances i.e. in highly volatile countries, we invest in USD but our focus is on local financing.
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Our vision
To become a centre of excellence for local currency credit solutions for infrastructure finance in lower income countries thereby assisting with the alleviation of poverty.
Presenter
Presentation Notes
GuarantCo is unique with our focus on local currencies. Some DFIs also have this opportunity but chose not to do so as it is challenging. We invest in infrastructure in lower income countries with the aim to support the alleviation of poverty.
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Our mission
To become a market-based, recognised provider of contingent credit solutions aimed at enhancing the availability and role of local currency finance for infrastructure projects and developing local capital markets.
Our philosophy is important to what we do through building capacity, developing partnerships and delivering impact. We have limited resources so we need to work in a smart way to deliver the impact that we would like to have. This is not only financially but also the social impact that we are aiming to have. An example is a project we support in Cameroon where we supported CamTel to help improved the financial viability of the National Broadband Network project by allowing the company to better match its debt service obligations with its revenues. We provided significant technical assistance in addition to financing. Although this is not strictly spoken our role, this support has significantly contributed to the success of the project.
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Significant developmental impact on peoples’ lives
50projects in17 countries
235,300jobs created
43.2mpeople with improved access to infrastructure
$6.4bninvestments enabled
Since we were established in 2005, GuarantCo has made a significant impact on the lives of people through the projects that we have provided local currency credit solutions for.
PIDG Annual Review 2018
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Our mandate
The guarantee size available from GuarantCo for a single transaction is between USD 5 million - USD 50 million equivalent in local currency. The maximum tenor is 15 years.
GuarantCo can provide a variety of contingent products as may be required for a particular project including:
Mobilise private sector funding into infrastructure in Africa and Asia
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We use blended finance
Public sector investorsEquity + Debt
( FMO / Owners )
Guarantee capacity enabled by leverage
of 3x capital(Moody’s and Fitch Ratings)
Guarantee capacity of USD 1 billion
Private sector investment mobilised
USD 4.4 billion
USD 1 of public investment mobilises USD 5 of private sector investment
$30MILLION
$327MILLION $1.1
BILLION
*As per Q1 2019
Presenter
Presentation Notes
We use blended finance on all our projects, provided by funding from our government owners. Blended finance is the strategic use of development finance and philanthropic funds to mobilise private capital flows to emerging and frontier markets creating positive results for both investors and communities. Our equity for our public sector investors is leveraged three times as agreed by our Board and enabled through our Moody’s and Fitch ratings which give us a $1.1 billion guarantee capacity. For every $1 of public money, we have mobilised $5 of Private Sector Investment. To date, we have mobilised private sector investment of $4.4 billion.
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We are building a track record
1st Leverage facility appliedIncreases guarantee
capacity to USD 146m
1st one PIDG project GuarantCo, EAIF and InfraCo Africa combine on Kalangala project in Uganda
Provides 1st co-guaranteewith US AID in Uganda
Provides 1st guaranteefor Standard Chartered Bank
Change in Fund Managerto GMC Limited, part of Cardano Development
1st Leverage facility cancelledBeneficiaries rely solely on
GuarantCo’s standalonecredit ratings
Strategicpartnership signedwith LSE to support developing markets’ local currency bond
issuance
1st transactionof InfraCredit Nigeria as operations commence
Since our inception in 2005, we have built many partnerships with: Leading lenders and investors such as Standard Chartered Nomura and Nedbank Sponsors, issuers and borrowers including Seven Energy, Mobilink and Calcom And strategic partners e.g. InfraCredit, FMO, Power Africa and US Aid To build our networks to enhance our reach and expertise which potentially open up future business opportunities.
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London Stock Exchange partnership
GuarantCo signed an agreement with the LSE in presence of the UK Secretary of State for DFID, Priti Patel on 31st March 2017.
“This collaboration with GuarantCo is part of the London Stock Exchange’s commitment to fostering the development of emerging and frontier capital markets.
Efficient capital markets are key to raising finance for companies from these economies and it’s our hope that this partnership will encourage and facilitate further development local currency debt markets, building on our experience as the global leader for international RMB and Indian rupee bond markets.”Nikhil Rathi,CEO London Stock Exchange plc.
Presenter
Presentation Notes
The partnership aims to achieve: Unlock new sources of capital to support infrastructure finance in emerging market economies. Support the growth of domestic capital markets through cooperation on capacity building and if needed, by enabling dual-listings of local currency bonds on the LSE markets, Help global investors gain access to local currency debt opportunities in emerging markets. GuarantCo participates in various LSE events including Nigeria and Kenya Day and round tables. We also listed bonds which we guaranteed including the Quantum Terminals corporate bond and the Sindicatum green bonds (INR and PHP) at the end of 2018.
How guarantees work
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How our guarantees work
Presenter
Presentation Notes
This chart shows two basic transaction structures: a guarantee over a local currency loan and a guarantee over a local currency bond. We do both. You can see that they are similar but the guarantee beneficiary differs – the lender in a loan structure and the bond agent on behalf of the bondholders in the bond structure.. There are two key legal agreements: guarantee agreement and recourse agreement. The recourse agreement gives GuarantCo its right to re-claim from the borrower should the guarantee be called. It contains all of GuarantCo commercial and policy requirements in the reps, covenants and events of default. The reporting requirements are very important to the PIDG. The policy requirements relating to E&S and ABC are non negotiable as these are PIDG conditions of funding.
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Criteria DescriptionGuarantee size USD 5-50 million in local currency equivalent.
Currency Local currency focus.Hard currency guarantees possible in fragile and conflict affected areas.
Tenor Up to 15 years.
Guarantee types Non-payment guarantee covering all risks.On-demand guarantee, not an insurance product.Principal and interest coverage.First loss, second loss, co-guarantee.EPC contractor guarantee.Innovative structures possible to solve liquidity constraints, tenor mismatch or funding timing constraints.
Clients Borrowers must be private sector entities although in certain cases also municipalities / sub-nationals and parastatals can be supported.
Security Typically pari passu security required alongside all other senior debtors.
Other key terms Limit on guaranteeing up to 50 percent of the long-term debt position of a company’s balance sheet.Upfront fee, guarantee fees, monitoring fees.English law.
Environmental and social standards
IFC Performance Standards.
Investment policyKey guarantee terms
Presenter
Presentation Notes
These are our standard transaction requirements – mainly stipulated in our Guarantee Policy and Investment Guidelines.
Portfolio overview
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Current portfolioBy countryCountry %
Bangladesh 1.7%
Cameroon 2.1%
Gabon 7.3%
Ghana 10.3%
India 28.5%
Kenya 10.1%
Mali 0.9%
Nepal 3.2%
Nigeria 16.5%
Pakistan 4.0%
Philippines 2.6%
South Africa 0.5%
Sri Lanka 0.5%
Tanzania 0.2%
Thailand 1.6%
Uganda 0.3%
Vietnam 9.8%
1COUNTRIES7
Countries with active projects
Countries eligible for funding
As per Q3 2018 data
Presenter
Presentation Notes
You can see here that we currently operate in 17 countries but also that we have lots of scope. We have a good regional spread in Africa and South East Asia and you can also see that 2/3 of our book is in four countries.: Nigeria, India, Gabon and Ghana. Our largest exposures are in the countries with the largest populations, such as Nigeria and India, and we are now looking to deepen our presence in countries where we only have single transaction. We need critical mass to achieve our mission and this can be achieved by focusing on countries with large populations and expanding our presence in the other countries where presently we only have a single transaction.
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Current portfolioBy sector
Power / energy supply Transportation
Digital communications
infrastructure
Gas transportation, distribution and
storage
Oil transportation, distribution and
storage Social
infrastructure
Agriculture-supporting
infrastructure
Manufacturing related to
infrastructure Multi-sector
Bangladesh • • • • • • • • •
Cameroon • • • • • • • • •
Gabon • • • • • • • • •
Ghana • • • • • • • • •
India • • • • • • • • •
Kenya • • • • • • • • •
Mali • • • • • • • • •
Nepal • • • • • • • • •
Nigeria • • • • • • • • •
Pakistan • • • • • • • • •
Philippines • • • • • • • • •
South Africa • • • • • • • • •
Sri Lanka • • • • • • • • •
Tanzania • • • • • • • • •
Thailand • • • • • • • • •
Uganda • • • • • • • • •
Vietnam • • • • • • • • •
Multi Country • • • • • • • • • Total
Total (USD m) $241.7 $127.6 $14.2 $56.2 $17.6 $101.4 $15.6 $65.6 $154.3 $794.1
Total current exposure ( % ) 30.4% 16.1% 1.8% 7,1% 2.2% 12.8% 2% 8.3% 19.4% 100%
Presenter
Presentation Notes
Our current portfolio shows the diversity of our operations: 17 countries, 9 sectors. As you can see, our largest exposure, with approximately 30% percent, is currently in the energy sector where we have projects in almost half of the countries in which we operate. As per Q2 2019, 67% of our energy projects were renewable. In the last column from the right (Multisector) there are two $50m transactions. The African Guarantee Fund, recognized as multi-country, is looking at infrastructure development projects in Kenya and in other African countries. In Nigeria, we helped set up a mini-GuarantCo, called InfraCredit Nigeria, that is locally run and we are still involved by providing guidance and advice. We are very proud that our model now starts to get local recognition. We are hoping to replicate this model in other markets thereby developing local capital markets. Note: This breakdown includes $26m Early Power
Selected transactions
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SindicatumIndia and the Philippines
Developing capital marketsThe guarantee facilitated issuance of first-ever 7 yeartranche and a 10-year PhP tranche, a first for INR and PhP offshore bonds respectively and was recently listed on the London Stock Exchange.
Green standardsBond issued in accordance with:• Green bond principles.• ASEAN Green bond standards.
Promoting rating from Moody’s A1Full credit substitution by GuarantCo.
Promoting financial resilienceProviding local currency finance to reduce currency exchange risk.
Impact
Refinancing for operating solar power plants in India.Construction of new solar and wind power plants in Philippines.
Refinancing of existing debt in INR.Construction finance in PhP.
100 percent guarantee denominated in INR and PhP but settled in USD.
Synthetic local currency bond Issued by Sindicatum, a developer / owner / operator of renewable power plants in South and Southeast Asia (176MW in portfolio as of Nov 2017).
USD 60mGreen bond
EnergyFinance
Presenter
Presentation Notes
Sindicatum Renewable Energy Company approached GuarantCo for assistance in refinancing USD debt into long-term local currency funding to help reduce currency risk for its projects. GuarantCo credit-enhanced the first 7 year offshore INR denominated green bond for Sindicatum in 2017, totalling USD 40 million, which was sold to a number of international asset managers. By utilising an innovative and first of its kind structure developed for this project, we were able to reduce currency risk for the developer and attract funding from international institutional investors. The transaction will also have significant demonstration effect in attracting institutional investors to invest in future bond issues supporting infrastructure in Asia. The three brownfield renewable energy projects financed with the bond proceeds generate a total capacity of 50MW which will improve quality of service for an estimated total of 106,000 people. The three projects also employ just over 100 people. This is a great example of our solution focused approach. Moody’s highlighted this project as one of the most innovative in the market. They rated the Green Bond A1 and Fitch AA-. The strength of GuarantCo’s guarantee was responsible for the strong rating which also made it feasible for institutional investors to subscribe to the Green Bond. It has created lots of interest in GuarantCo in India and as a result have many infrastructure bond requests from this country.
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InfraCreditNigeria
USD 1.1bn
Guarantee capacity
$30mLeverage facility
USD 327mEquity
USD 50mCallable capital
USD 150mEquity
USD 1.1bn
Guarantee capacityx5
x3
Moody’s andFitch Ratings
Agusto & Co and GCR
Leverage
Leverage
Public sector investors
Public sector invests USD 16.7 million in GuarantCo which is leveraged 3x to provide USD 50 million guarantee to an InfraCredit.
This USD 50 million guarantee will be leveraged 20x to help InfraCredit mobilise up to USD 1 billion of guarantee capacity in local currency and therefore leverages the original investment made by the public sector up to 60x.
Presenter
Presentation Notes
We did our first bond in Nigeria in 2011 which was the first ever local currency bond in the country. Regulators in Nigeria had never dealt with this before and it took them 18 months to approve. We then also had to convince investors as this was a first for them too. However, when we had everyone on board, we closed the Tower Aluminium USD 14.7 million bond in four weeks. We built up experience in the market and wanted to explore whether we could set up a mini-GuarantCo in Nigeria as the market is big and we did not have the capacity to meet the demand we could see. We set up a feasibility study through TAF (Technical Assistance Fund), another PIDG company, which showed that it would make sense to set up InfraCredit Nigeria. This was set up in 2015 and, although stand-alone, we are still closely involved in providing advice to support building capacity and scaling up. They became operational in March 2017 and did their first transaction in December 2017 with 15 pension funds investing. This transaction, for local power developer, Viathan, was the first ever 10 year corporate bond in Nigeria and was over-subscribed. Over 80% of the investor base were local pension funds and insurance companies, most of whom have never invested in infrastructure before. This slide demonstrate that InfraCredits get much higher local ratings which is why this model makes so much sense and is successful. We are now looking to replicate in Pakistan, where we signed an Memorandum Of Understanding with Karandaaz Pakistan to set up the Pakistan Credit Enhancement Facility (PCEF) in September 2018, and potentially in Kenya too. More information: GuarantCo acted as one of the founding sponsors for InfraCredit providing grant funding, capacity and experience to bring InfraCredit from concept to reality. The unusual nature of InfraCredit means that there are few, if any, commercial entities that would be willing to provide such a facility as that provided by GuarantCo, particularly for a start-up guarantee company. GuarantCo’s involvement allowed InfraCredit to start operations and which will allow for further growth as it builds its own experience and track record. GuarantCo’s involvement also helped to credit enhance InfraCredit’s capital structure and achieve a higher credit rating, thereby increasing its attractiveness to borrowers and bond investors/banks that will invest in infrastructure through bonds covered by InfraCredit. The leverage provided by GuarantCo provides for a more efficient capital structure that will facilitate a viable business and allow InfraCredit to achieve its long term aim of attracting private sector investors. GuarantCo’s support will allow InfraCredit to mobilise pension and insurance funds to help to meet the significant infrastructure funding needs of Nigeria (beyond the capacity of the Nigerian Government and banking markets to fund in isolation). It will also allow InfraCredit to open up infrastructure bonds as an asset class to pension funds, helping to diversify fund portfolios heavily concentrated in Nigerian Government securities. InfraCredit will facilitate access to the corporate bond market to first time issuers, providing them access to long term financing more appropriate for funding infrastructure. Subsequent bond refinancing of infrastructure linked bank debt will also will enable banks to more efficiently recycle their capital for new infrastructure loans.
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Mixta Real EstateNigeria
Developing capital marketsFull credit substitution by GuarantCo enabled local pension funds and insurance companies to invest.
Affordable housing developmentProcess used to build affordable houses.
Promoting financial resilienceProviding local currency finance to reduce currency exchange risk.
Potential for replicationAfrican local currency bond fund investing in a second tranche.
Impact
Development of affordable houses and infrastructure for land plots.
Issued by Mixta Real Estate, an affordable housing developer focused on North and West Africa.
NGN 7.5bBond
Urban infrastructureFinance
Presenter
Presentation Notes
Mixta Nigeria is a leading real estate development company in Nigeria. The company has a strong track record and diverse real estate portfolio, with operations spanning the residential, commercial, retail and leisure sectors of the Nigerian real estate industry. In order to raise longer term financing for the development of its affordable housing strategy, The series 1 tranche, issued in 2017, was for NGN 4.5 billion and the series 2 tranche A bond, issued in 2018, was for NGN 3 billion. Alongside the series 2 tranche A bond, Mixta also raised an additional NGN 2.3 billion through an unguaranteed tranche B in which African Local Currency Bond Fund was a cornerstone investor. Without GuarantCo’s support, Mixta Nigeria’s local bond rating would have been below the minimum threshold required by local insurance companies and pension funds to invest in corporate bonds. Consequently, Mixta Nigeria turned to GuarantCo to provide a 100% credit guarantee the bond, which was eventually issued with a local AAA rating. As Mixta Nigeria’s revenues are in NGN, a key requirement for the company was to secure local currency funding. Consequently, GuarantCo’s local currency guarantee was instrumental. It is estimated that nearly 5,000 affordable houses will be built with the proceeds of the bonds guaranteed by GuarantCo and as a result nearly 25,000 lower income people will have access to housing in Nigeria. Mixta Nigeria anticipates that the rapid population growth in Nigeria, combined with a high rate of urbanization, will further increase aggregate demand for housing. Mixta is confident that it has the capacity to not only improve conditions for the lower middle class, but also to create a “snowball” effect, over time increasing the affordability of housing at all levels in Nigeria. The bond was recognised as “Social Development Bond” of the year in 2017.
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Bridge PowerGhana
Innovation project financingFacilitates rapid deployment of infrastructure.
Release baseload powerDiversifies Ghana’s power portfolio and reduces load shedding.
Gas infrastructureLPG storage can be leveraged for increasing LPG use in domestic markets.
Cleaner power sourceHelps to reduce reliance on diesel and HFO.
Impact
Financing for greenfield LPG power plant storage facility.
Vendor financing allows construction to begin ahead of senior debt closing.
100% payment guarantee to contractor if senior debt not available by commercial operation date.
Issue to Mekta, EPC contractor to Bridge Power (200MW greenfield IPP).
USD 50mPayment guarantee
Urban infrastructureFinance
Presenter
Presentation Notes
Bridge Power is a 200MW LPG fired power project in Ghana. GuarantCo provided a USD 50m payment guarantee to the EPC contractor Metka as part of a vendor financing package. The issuance of the EPC contractor payment guarantee enables the project to start construction ahead of senior debt being finalised, thereby allowing the project to reach completion sooner and start delivering critical power to the grid. This is another a great example of the innovative approach we take to helping projects come to fruition. The structure can be replicated across the globe for any sector that utilises EPC contractors and ultimately helps reduce project execution timelines, which is a chronic problem across infrastructure projects in emerging markets.
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Lower SoluNepal
Boosting power supplyDeliver sustainable power to 4 million people and increase country’s generation capacity by 11%.
Alignment with national development plansSupports objective to become a net exporter of power in the medium to long term.
Job creationEnabling the provision of 1,000 direct and indirect jobs (up to 30% women during construction and operation).
Developing capital markets and promoting financial resilienceIncreasing acceptance of long tenor local financing and providing a template for future projects.
Impact
Construction of a 82MW run-of-river hydro power project, the first plant in Nepal.
90% partial Credit Guarantee for the senior financing by local currency lenders with a maximum tenor of 16.5 years.
NPR 2.78bGuarantee
EnergyFinance
Presenter
Presentation Notes
GuarantCo provided a NPR 2,785m ($28.2m equivalent) guarantee for Essel Clean Solu (ECS) Hydropower Private Limited, to support the financing of the Lower Solu project in the Solukhumbu district in Nepal. The project comprises an 82 MW run-of-river hydroelectric power plant that will provide electricity to an estimated 3-4 million people and will help to alleviate the current power shortages in the country. It is the largest private sector energy project in Nepal, the first Independent Power Producer in the country financed by both international and domestic financiers and the first project financing involving an independent financial guarantor. Construction works at the project site started in March 2015 and the project is expected to be operational in 2019. With one of the largest untapped hydropower resources in the world (estimated at >80,000 MW), Nepal has the means to become a significant exporter of electricity, but currently imports power and has one of the world’s lowest per capita electricity generation and consumption rates. The development of Nepal’s hydropower sector has been held back by, among other factors, a lack of financing. ECS’s success in tying up financing, particularly from local banks with GuarantCo’s guarantee, is expected to pave the way for others to follow. ECS is sponsored by a consortium of Nepalese and Indian investors, led by Essel Infraprojects Ltd, India and Clean Developers Pvt Ltd, Nepal, who were awarded the right to develop the Lower Solu project in a competitive bidding process. Due to the favourable geographical conditions of the project location, the project is able to operate without the need for a large dam or long tunnel, resulting in a relatively small environmental footprint. The project has created over 1,000 jobs during construction and operations and has resulted in significant development of the project area. A skills training programme has been undertaken to maximise local employment The Lower Solu project will add around 11 percent to Nepal’s electricity capacity and will reduce the severe electricity shortage in the country, which sees 12-16 hour daily power cuts in winter months. The project is the largest private sector plant in Nepal, and the first project to have both local and international debt. The project is also the first in Nepal to involve an international financial guarantor and introduces Nepalese banks to long tenor project finance, incorporating international best practices. The project is expected to have a significant demonstration impact for future projects.
Why work with us?
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Why partner with GuarantCo?
Borrower/Issuer
Positive signaling.
Access new pools of capital (e.g. local currency loans and bond markets).
Enhance overall return on investments.
Suppliers(EPC, equipment etc.)
Offer more flexible terms.
Opportunity to accelerate mobilising of projects whilst capitalis being finalised.
Risk mitigating counterparty risk in event financing is extended.
Financier
Risk transfer (instead of risk mitigation) counterparty risk to AA- / A1 entity.
Efficient capital treatment for long dated transactions.
Build capacity in sustainable long-term finance using myriad types of financing solutions.
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GuarantCo’s funding
*As per Q1 2019 exchange rates
Callable capital
GBP 40million
(USD 52 million*)
Share capital
USD 312million
GBP 90million
Committed funding
USD 10.25million
SECO funding from a total ofUSD 15 million committed.
(4.75 million disbursed in 2017)
DFID future callable capital.(Fully disbursed by 2020)
GuarantCo has a track record of periodic equity injections
provided by its owners.
GuarantCo is part of PIDG, with over USD 2.4 billion
of total funding.(As at 31st December 2017. Includes owner funding and
other funding sources)
GuarantCo has no debt on its balance sheet.
Leverage multiple:
The Board allows for leverage up to 3 times equity plus
FMO standby facility (USD 30 million) and callable capital.
Moody’s and Fitch’s ratings of GuarantCo also allow for
leverage of 3 times.
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Guarantee transaction process
Origination Conduct preliminary assessment of deal including
