guarantco portfolio presentation - limited release may 2014

GuarantCo

Transaction Portfolio

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Table of Contents

Africa

Celtel Kenya 4

ALAF Ltd 5

Mabati Rolling Mills 6

Celtel Chad 7

Home Finance Guarantors Africa 8

SA Taxi Finance I 9

Spencon 10

Tower Aluminium Group Ltd 11

Kalangala Infrastructure Services 12

Kalangala Renewables 13

Cameroon Telecommunications Ltd 14

Kaluworks Ltd 15

Quantum Terminals Ltd 16

SA Taxi Finance II 17

Asia

Shriram I 19

Wataniya Palestine 20

Calcom Cement 21

Ackruti City Limited/ Hubtown 22

Shriram II 23

Kumar Urban Development Ltd 24

Au Financiers Ltd 25

Pakistan Mobile Communications Limited 26

Softlogic Finance 27

Thai Biogas Energy Company 28

GuarantCo in Africa

CELTEL KENYA

KES 725 million partial credit guarantee to credit enhance a

local bond issue as part of a larger financing package for the

second mobile telecommunications provider in Kenya.

Developmental Benefit

Celtel Kenya needed to restructure its

balance sheet by exchanging costly

foreign currency shareholder loans with

local currency debt. This allowed the

company to run a more capital-efficient

and competitive business and expand its

network. This helped to reduce tariffs,

thus making mobile services affordable to

a greater proportion of the population.

Transaction Overview

Date: December 2005 Country: Kenya

GuarantCo Guaranteed Amount: Kenya Shillings (KES) 725 million (USD 12 million)

Total Transaction size: KES 3.5 billion

Financing Partners: FMO, DEG

GuarantCo Additionality:

As part of its initiative to maximise local currency financing, Celtel Kenya sought to raise Kenyan Shilling

debt from the local capital market. However, in order to place debt in the local capital market, Celtel Kenya

needed to obtain credit enhancement from an AAA-rated institution. GuarantCo’s involvement enabled

FMO to arrange and underwrite the required credit enhancement for the debt issuance.

The facility provided a major boost to the Kenyan capital market due to the demonstration effect of a

private sector non-financial institution’s successful bond listing.

4

ALAF LIMITED

TZS 6.5 billion partial credit guarantee made available to

provide credit enhancement for a bond issue to finance the

expansion of a steel plant in Tanzania


The Safal group is one of the biggest

producers of steel roofing in Africa, widely

used in affordable housing. The proposed

investment in their Tanzanian plant

introduced new and more affordable

product lines, besides improving quality of

existing production, thus providing access

to better quality housing products to low

and middle income households.


Date: June 2007 Country: Tanzania

GuarantCo Guaranteed Amount: Tanzania Shillings (TZS) 6.5 billion (USD 5.1 million)

Total Project Cost: TZS 37.3 billion

Financing Partner: IFC


The Safal Group proposed to partly fund its proposed new product line in Tanzania by local currency

bonds, but needed credit enhancement to be able to access the local capital market. GuarantCo and IFC’s

guarantee, covering 75% of the bond amount, was critical for Safal to begin the process of issuing the

bonds.

The guarantee was agreed by IFC and GuarantCo in 2007 but was not in the end required as Alaf

eventually managed to access the bond market without credit enhancement in 2009. However, the

availability of the guarantee played an important role in catalysing the investment 2 years earlier than

would have otherwise been possible as Safal was prepared to inject its equity portion up front knowing the

debt portion was secure. It is a feature of GuarantCo’s support that no early penalties are charged for

cancellation, thus encouraging clients to graduate to purely commercial finance at the earliest opportunity.

5

MABATI ROLLING MILLS

KES 750 million partial credit guarantee made available to

provide credit enhancement for a bond issue to finance the

expansion of a steel plant in Kenya


The Safal group is one of the biggest

producers of steel roofing in Africa, widely

used in affordable housing. MRM is their

flagship operation in E Africa. Demand for

steel roofing has been growing, in line

with the rapid growth in housing activity in

the region. The new capacity at Safal’s

Kenya plant will enable them to meet the

growing demand while continually

improving product quality.


Date: June 2007 Country: Kenya

GuarantCo Guaranteed Amount: Kenyan Shillings (KES) 750 million (USD 9.7 million)

Total Project Cost: KES 3 billion

Financing Partners: IFC


The Safal Group proposed to partly fund its proposed plant capacity expansion in Kenya by local currency

bonds, but needed credit enhancement to be able to access the local capital market. GuarantCo and IFC’s

guarantee, covering 75% of the bond amount, was critical for Safal to begin the process of issuing the

bonds.

The availability of the guarantee in 2007, while not eventually required, played an important role in

catalysing the investment 18 months earlier than would have otherwise been possible. Safal’s access to

Kenya’s domestic capital market without a guarantee, a significant and welcome sign of increased market

sophistication, was facilitated by GuarantCo and IFC’s timely support. GuarantCo was then able to recycle

its capacity for other projects in the region.

6

CELTEL CHAD

XAF 3.5 billion partial credit guarantee for Afriland Bank to

provide additional lending to the leading mobile

telecommunications provider in Chad


The link between mobile phone use and

development has been widely

documented, particularly in Africa. The

further network expansion, partially

financed by the GuarantCo covered loan,

has helped expand the network into more

rural areas. Celtel Chad leads the way in

expanding the mobile network, so for

many areas this will be the first time they

have had access to a mobile services. In

addition, the ability to roam over a larger

proportion of the country is particularly

useful for Chad as it has a significant

nomadic population.


Date: October 2007 Country: Chad

GuarantCo Guaranteed Amount: CFA Franc (XAF) 3.5 billion (USD 8 million)

Total Transaction size: XAF 14.8 billion

Beneficiaries & Financing Partners: Afriland First Bank, FMO


In line with Celtel policy to increase local currency financing, Celtel Chad sought additional CFA financing

for capital expenditure and to refinance USD shareholder loans. The joint guarantee by FMO and

GuarantCo enabled Afriland First Bank to increase its loan beyond its normal lending cap to meet Celtel

Chad’s full debt requirements.

7

HOME FINANCE GUARANTORS AFRICA

USD 5 million Stop-Loss Insurance for HFGA, who will reinsure

Collateral Replacement Indemnities that facilitate access to home

loans by low and lower middle income households


Access to affordable home loans is a

major obstacle to economic

development for most low and lower

middle income families in developing

countries. Many families are unable to

buy or improve a home because of

limited access to finance. There is

lender reluctance to enter this market

due to the inability of borrowers to

provide sufficient down-payments and

resulting perceived default risk.

At the same time, few developers

choose to build low cost housing

because there is no prospect of

potential buyers raising finance.

HLGC’s business model has worked

well in South Africa for 20 years and

HFGA, with GCo’s help, aims to

replicate this success in sub Saharan

Africa.


Date: September 2010 Country: Ghana, Kenya, Rwanda, Uganda and Malawi

GuarantCo Guaranteed Amount: USD 5 million equivalent in local currencies

Total Project Cost : N/A

Beneficiaries & Financing Partners: HFGA, Home Loan Guarantee Company (HLGC), various local

insurance companies


HFGA is introducing innovative home loan protection products to new markets in conjunction with local

insurance companies in order to stimulate local banks to widen access to finance. HLGC, who has set up

HFGA based on their successful South African model, is a not for profit social enterprise and has not

accumulated sufficient reserves to fully capitalise HFGA. HFGA therefore faced difficulty meeting regulators’

minimum capital requirements without backing from GuarantCo. Given the pioneering nature of HFGA’s

work, such backing is not available from either commercial insurers or even dfi’s. The initial USD 5m facility

may be increased depending on demand.

Additional technical assistance funds are being used for a capacity building programme with local insurers

and banks and to help provide financial literacy training for borrowers. An output based aid programme is

also being considered that will provide targeted subsidies to make Collateral Replacement Indemnities

affordable to the lowest income quartile of households.

8

SA TAXI FINANCE I

ZAR 139 million partial credit guarantee of the senior tranche

of SA Taxi Finance’s loan program


Date: September 2010 Country: South Africa

GuarantCo Guaranteed Amount: ZAR 139 million (USD 20 million)

Total Transaction Size: ZAR 760 million

Beneficiaries & Financing Partners: FMO, Investec, ICF Debt Pool


SA Taxi were seeking to syndicate a ZAR 1,700m senior tranche out of a total ZAR 1,925m loan program.

A reduced risk appetite in the international and local market meant that an initial ZAR 635m was placed

with the DFI community. The financing was arranged by FMO and Transcapital, with participations from

GuarantCo and ICF. Investec Bank participated with a further ZAR 120m of mezzanine financing.

South Africa, being an upper middle income country, would not normally qualify for support from

GuarantCo. However, given the pro-poor nature of the financing and SA Taxi’s inability to access the local

markets following the financial crisis, GuarantCo obtained special approval from its shareholders to

support the financing.


The South African taxi (minibus) industry

employs an estimated 150,000 taxis and

many more individuals, directly and

indirectly. The industry is a critical part of

the country’s transportation network,

especially in the disadvantaged suburban

areas. 78% of all non private journeys in

S Africa are made in minibus taxis.

SA Taxi Group, the leader in taxi finance,

has provided seed capital to at least

19,500 broad based black SMMEs (all of

whom are previously disadvantaged

individuals).

SA Taxi is also critical to the

government’s Recap program that aims

to improve the operations and regulation

of the previously chaotic and at-times

violent minibus taxi industry. The Recap

program will also result in improved

emission norms and passenger safety

standards.

9

SPENCON

USD 15 million performance bond guarantee facility for a local east

African construction company


Performance Bonds are a prerequisite for

carrying out any construction project in Africa

and they are the most significant financial

bottleneck for the company. Large construction

contracts, often donor funded, are regularly

awarded to international construction

companies, at 15 – 25% higher prices, because

local companies cannot furnish the full

performance bonds required.

GuarantCo’s facility will help lower the cost of

infrastructure in the target countries by enabling

greater competition and local private sector

participation. There will be continued expansion

and employment for over 800 permanent

Spencon staff and over 3,700 semi skilled

personnel across East Africa.


Date: October 2010 Country: Uganda, Kenya, Tanzania

GuarantCo Guaranteed Amount: USD 15 million equivalent in local currencies

Total Transaction size : USD 30 million equivalent in local currencies

Beneficiaries & Financing Partners: Standard Chartered Bank


Spencon is a mid sized local civil works contractor headquartered in Nairobi specialising in the water,

roads and power sectors. They were having trouble obtaining additional performance bond lines from

their banks in order to bid for and execute projects in East Africa. Standard Chartered, their main

banker, was unable to provide the full requirement of USD 30 million, largely due to bank regulations on

single obligor limits. GuarantCo’s guarantee made it possible for Standard Chartered to offer the full

additional facility required.

10

TOWER ALUMINIUM GROUP LIMITED

Partial credit guarantees totalling NGN 2.21 billion to credit

enhance the maiden bond issue of the largest manufacturer of

aluminium roofing in West Africa


GuarantCo’s support for Tower has had a

strong demonstration effect, helping build

further capacity in the embryonic Nigerian

capital markets. It has also stretched the

tenor to 7 years from the typical 5 years for

previous corporate bonds, which is a crucial

step toward meeting the requirements of

future infrastructure related bond issues

where longer tenor is essential.

Following a request for assistance,

GuarantCo is also working with the Nigerian

Securities & Exchange Commission to set

up training and mentoring of their staff.

Tower produces aluminium roofing, a

component of low cost housing. It offers

advantages over steel roofing, lasting 5

times longer, at prices affordable to low

income families in Nigeria and other parts of

West Africa


Date: September 2011 Country: Nigeria

GuarantCo Guaranteed Amount: NGN 2.21 Billion (USD 14.7 million equivalent)

Total bond issue : NGN 4.63 Billion (Tranche A: NGN 3.63 Billion and Tranche B: NGN 1 Billion)

Beneficiaries & Financing Partners: First Trustees Limited (on behalf of investors)


In 2008 Tower Aluminium Group Limited (“Tower”), the largest manufacturer of aluminium roofing in West

Africa, financed a new factory with USD denominated bank loans. In late 2008, as the full impact of the

global financial crisis hit Nigeria, the Naira devalued by c 25% against the USD. Tower’s revenues are

mostly in Naira and the impact of the devaluation was to significantly increase the cost of servicing its USD

financial liabilities. The viability of the expanded business was thus impacted severely.

Tower recognised the need to diversify away from relying on the bank market and decided to refinance its

USD liabilities by issuing a 7 year Naira denominated corporate bond, thus enabling the company to also

reduce its currency risk and extend the tenor of its debt. Tower was however unable to secure the “A” local

rating required to be able to access local pension funds, key investors in the Nigerian corporate bond

market. GuarantCo was able to use its local AAA rating in Nigeria to credit enhance Tower’s bond issue,

thereby making it eligible for pension fund investors. This was the first time such a structure had been

used in Nigeria and there were many regulatory and procedural challenges which could not have been

overcome without GuarantCo’s patient developmental approach.

11

KALANGALA INFRASTRUCTURE SERVICES

Joint partial credit guarantee totalling USD 2.2 million covering

part of the financing for two new ferries, a road rehabilitation and

certain water facilities for Bugala Island in Lake Victoria, Uganda


The enhanced infrastructure is required in

order to satisfy the growing and unmet

demand and will be transformative for

Bugala Island. It is highly unlikely that the

existing dilapidated and unsafe ferry would

have been replaced in the foreseeable

future, nor the water supply systems

installed. In addition, the ability for the

project to support the water supply systems

is due to the project’s multi-revenue

streams, diversification and economies of

scale and scope provided by other aspects

of the project. As a stand-alone project,

these water schemes are highly challenging

to finance and operate.


Date: December 2011 Country: Uganda

GuarantCo Guaranteed Amount: USD 1.8 million

Total note issue : USD12 million (guaranteed tranche USD 5 million)

Beneficiaries & Financing Partners: Nedbank Limited, EAIF and USAID (as co-guarantor)


This is a highly developmental project to bring basic utilities to the largest island in Lake Victoria and has

required imaginative financing to attract the debt required to meet the challenging economics. GuarantCo

played a crucial role over a five year period in underwriting (at times for substantially larger amounts),

structuring and executing the finance. This is the first time that GuarantCo has provided a joint guarantee

with USAID and the first time that Nedbank has been the beneficiary of a guarantee from GuarantCo. In

particular, GuarantCo worked closely with USAID to amend their standard form documentation in order to

align it more appropriately with a project financed structure.

The Kalangala Infrastructure Services project consists of the ownership, financing, upgrade, construction,

operation and maintenance of two roll-on roll-off passenger and vehicle ferries, the upgrade of the island’s

66km main road from a dirt road to a gravel road, and a series of solar-powered pump based water supply

systems, in each case to serve the population, institutions and businesses of the Island. This project is part

of an integrated project with Kalangala Renewables.

12

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KALANGALA RENEWABLES

Joint partial credit guarantee totalling USD 1.4 million covering

part of the financing for a hybrid solar generation system and

associated transmission and distribution systems for Bugala

Island in Lake Victoria, Uganda


At present there is no operational grid-based

electricity supply on Bugala Island with most

of the population, schools, institutions and

businesses on the Island lacking access to

reliable and affordable electricity. The

extension of daytime activities, such as

studying, will add to the Island’s productivity

and education. More specifically, anticipated

improvements include the following:

- Decrease in energy costs per kwh

- Access to more employment opportunities

-Improved literacy due to improved lighting

-Reduced time spent on collecting fuel

-Better healthcare through improved

medications and sanitation measures

-Improved ability to preserve and market

agricultural products

- Improved marketing of the island as a

tourist destination thereby helping to

diversify the Island’s economy.


Date: December 2011 Country: Uganda

GuarantCo Guaranteed Amount: USD 1 million

Total note issue : USD12 million (guaranteed tranche USD 5 million)

Beneficiaries & Financing Partners: Nedbank Limited, EAIF and USAID (as co-guarantor)


GuarantCo played a crucial role over a five year period in underwriting (at times for substantially larger

amounts), structuring and executing the finance. This is the first time that GuarantCo has provided a joint

guarantee with USAID and the first time that Nedbank has been the beneficiary of a guarantee from

GuarantCo. In particular, GuarantCo worked closely with USAID to amend their standard form

documentation in order to align it more appropriately with a project financed structure.

Kalangala Renewables consists of a 1.6 MW (nominal) hybrid solar and diesel power generation system,

33kv transmission system, low voltage distribution system and the installation of a prepaid metering

system to households and businesses on the Island. This project is part of an integrated project with

Kalangala Infrastructure Services.

13



CAMEROON TELECOMMUNICATIONS LIMITED

Partial credit guarantee totalling XAF 20 billion to overcome

regulatory single obligor limits and increase its lending to CamTel

to support the roll out of a National Broadband Network


GuarantCo’s support for CamTel has helped

improve the financial viability of the NBN

project by allowing the company to better

match its debt service obligations with its

revenues. It has also stretched the tenor of

the loan from the typical 3 years to 6 years

which further improves the financial viability

of the NBN project where longer tenor is

essential.

World Bank research highlights that

Cameroon lags behind the average

benchmarks for Sub-Saharan Africa for

internet access. Consequently, the NBN is a

project that has significant developmental

value to Cameroon as well as the rest of the

Central African region.


Date: December 2012 Country: Cameroon

GuarantCo Guaranteed Amount: XAF 20 Billion (USD 20 million equivalent)

Total Project Cost: USD 203 million

Beneficiaries & Financing Partners: Standard Chartered Cameroon SA


Cameroon Telecommunications Limited (“CamTel”) is presently the sole provider of fixed line broadband

in Cameroon which it sells wholesale to internet service providers (ISPs) under the name CamNet. The

National Broadband Network (“NBN”) project forms a critical part of the Central African Backbone (“CAB”)

project that is being developed by the World Bank and African Development Bank and which will link

Cameroon, Chad and the Central African Republic to each other, the rest of Africa and the World.

To finance the USD 203 million NBN project cost CamTel secured a USD 168 million export credit facility

from China EXIM Bank (“CEXIM”) as the NBN project is to be delivered by Huawei, a Chinese OEM.

However as all of CamTel’s revenues are in CFA Francs (“XAF”) the company’s preference was for the

remainder of the financing to be denominated in XAF. CamTel approached Standard Chartered Cameroon

SA (“SCC”) to arrange a XAF debt facility for the remaining financing requirement but SCC found that all

the local banks, including itself, were constrained in lending to CamTel by regulatory single obligor limits in

Cameroon. To avoid reverting to off-shore hard currency financing for CamTel SCC approached

GuarantCo to provide a partial credit guarantee to help overcome the regulatory single obligor limit and to

provide the required additional XAF financing to CamTel.

14

KALUWORKS LIMITED

KSH 750 million partial credit guarantee to credit enhance the

maiden bond issue of the largest manufacturer of aluminium roofingin East Africa


GuarantCo’s support for Kaluworks provided

a strong demonstration effect, helping a

medium –sized company access the capital

markets which typically have only been

available to the largest corporates. It has

also stretched the tenor to 7 years from the

typical 5 years for previous corporate bonds,

which is a crucial step toward meeting the

requirements of future infrastructure related

bond issues where longer tenor is essential.

Kaluworks produces aluminium roofing, a

component of low cost housing. It offers

advantages over steel roofing, lasting 5

times longer, at prices affordable to low

income families in Kenya and other parts of

East Africa.


Date: December 2012 Country: Kenya

GuarantCo Guaranteed Amount: KSH 750 million (USD 9 million equivalent)

Total Project Cost: USD 35 million

Beneficiaries & Financing Partners: Ropat Trustees Limited (on behalf of the bond investors)


Kaluworks predicts that the aluminium roofing market in East Africa will grow at a CAGR of circa 30% over

the next 5 years and its sales volumes had grown to the point that the company had reached production

capacity. Kaluworks’ embarked on an expansion programme in 2011 and had raised the majority of the

funding requirement from local banks in the form of a USD medium term loan. To finance the remaining

funding requirement Kaluworks decided to issue a local currency bond to raise KSH 1.0 billion (USD 12

million).

The Kenyan bond market is very well established and the Nairobi Stock Exchange (“NSE”) has proved an

attractive avenue to raise medium to long term capital for many companies albeit mainly the larger

corporate borrowers such as Safaricom and KenGen. As Kaluworks was a medium sized corporate and

the bond was to be unsecured Kaluworks’ local advisors advised the company that it would require credit

enhancement via a third-party guarantor to enable it to raise the required amount of debt and tenor it

desired from local investors. GuarantCo was approached to use its AAA local rating to help credit enhance

the bond and enable Kaluworks to raise more debt on the terms necessary to support the feasibility of the

project.

15

QUANTUM TERMINALS LTD

GHS 12m partial credit guarantee of long term senior funding

raised by the Quantum Group for the construction and

operation of an LPG loading and storage terminal in Atuabo,

Ghana


Ghana suffers from a severe lack of gas

industry infrastructure resulting in low

penetration of LPG and high usage of

wood and charcoal (taken from largely non

renewable resources), both of which

produce high levels of CO2 emissions

relative to LPG.

With domestic LPG production due to start

in 2014, Quantum Terminal’s facility

provides critical support infrastructure,

facilitating the flow of domestic LPG to the

end user.

GuarantCo’s support enabled Quantum to

raise the required local currency financing

component for the project which will

contribute to increasing availability of

affordable LPG in the country, thereby

helping to lower CO2 emissions and rates

of deforestation.


Date: December 2013 Country: Ghana

GuarantCo Guaranteed Amount: GHS12 million (USD 5.4 million)

Total Transaction Size: USD 10.8 million

Beneficiaries & Financing Partners: Standard Chartered Bank Ghana


Quantum Terminals is part of an Oil & Gas trading Group operating in Ghana. The borrower required

funding in order to construct an LPG storage and loading terminal in Atuabo, Ghana. The terminal is to

provide key supporting infrastructure for domestic LPG to be produced by the Government owned

Atuabo gas processing plant.

Quantum required both hard and local currency financing for the project in order better match its

revenue profile. Standard Chartered, the Group’s main banker, was unable to provide the full

requirement of USD 10.8 million, largely due to Central Bank regulations on single obligor limits.

GuarantCo’s guarantee made it possible for Standard Chartered to offer the local currency tranche for

the project alongside the hard currency tranche, thereby helping the company to achieve an optimal

currency mix in the financing

16

SA TAXI FINANCE II

ZAR 150m partial credit guarantee for ZAR 200m additional

financing for SA Taxi


Date: December 2013 Country: South Africa

GuarantCo Guaranteed Amount: ZAR 150 million (USD 15 million)

Total Transaction Size: ZAR 200 million

Beneficiaries & Financing Partners: ABSA


To meet additional growth in demand for its specialist leasing product, SA Taxi has an

on-going financing requirement. Reduced risk appetite in the international and local

market meant that an initial round of funding was placed with the DFI community.

Through this additional financing, GuarantCo was able to support Absa’s first

transaction with the Company. The financing was arranged by Transcapital.


The South African taxi (minibus) industry is

estimated at over 200,000 taxis and has

created more than 400,000 sustainable jobs

directly. The industry is a critical part of the

country’s transportation network, especially

in the disadvantaged suburban areas, and

accounts for over 80% of all public transport

trips

17

GuarantCo in Asia

SHRIRAM I

INR 900 million partial credit guarantee of the mezzanine

tranche of a truck finance receivables securitisation in India


Shriram finances small truck owner-

operators who would otherwise have to

borrow from unlicensed money lenders.

The finance enables thousands of poor

truck drivers to purchase their own

vehicles rather than remaining

employees.

The mezzanine guarantee was a product

not available from Indian investors. This

intervention enabled a much larger capital

markets transaction to be completed

without which Shriram would have

reduced its support to the sector.

The Shriram group is one of the corporate

leaders in HIV awareness and reduction

programmes. The Shriram Transport

business is essential to the programmes,

as the company has unrivalled access to

truck drivers to run health and education

programs.


Date: December 2008 Country: India

GuarantCo Guaranteed Amount: INR 900m (USD 19 million)

Total Transaction Size: INR 21 billion

Beneficiaries & Financing Partners: Deutsche Bank, FMO


Deutsche were seeking to syndicate an INR 2,036 million mezzanine tranche in a securitisation of truck

finance receivables but were struggling as there was no investor appetite for mezzanine debt in India.

GuarantCo, in collaboration with FMO, was able to guarantee the mezzanine tranche thereby enabling the

successful securitisation.

GuarantCo and FMO’s facility helped demonstrate the commercial viability of mezzanine guarantees in the

nascent Indian securitisation market and today Shriram is able to get such guarantees from private sector

banks. GuarantCo and FMO’s intervention helped this transition to more sophisticated financial products,

thus building additional capacity in the local capital markets

19

CALCOM CEMENT

INR 1,120 million partial credit guarantee of two Indian banks’

lending to a new cement plant in Assam, India.


The project will create the largest cement

production facility in the North-East region

of India which suffers from a chronic

cement production deficit. It will help bring

down the abnormally high cement prices

in the region by reducing the substantial

cost of freight that suppliers currently bear

for cement brought in from mainland

India.

It is also the largest single private sector

infrastructure investment in the North

East. Besides providing employment and

increasing economic activity in the

troubled region, the project will support

other infrastructure projects such as

housing, roads and hydropower thereby

multiplying the developmental benefit.


Date: September 2009 Country: India

GuarantCo Guaranteed Amount: INR 1,120million (USD 25 million)

Total Project Cost: INR 4,076 million

Beneficiaries & Financing Partners: HDFC Bank, Axis Bank, Cordiant Capital


Although the economic and security situation in the north-east region of India has vastly improved in the

recent past, Indian banks are still cautious lending to projects in the region. HDFC Bank, the lead arranger,

was struggling with syndication of the project debt. GuarantCo’s guarantee enabled the additional

financing required for the project to achieve financial close.

The amount required was above GuarantCo’s normal maximum exposure so INR 480m of the total INR

1,120m was syndicated by GuarantCo to Cordiant Capital, a Montreal based Emerging Market fund

manager, thus leveraging in further private sector support.

20

ACKRUTI CITY LIMITED/ HUBTOWN

INR 940 million partial credit guarantee for lending to several slum

redevelopment projects in Mumbai, India.


Nearly half of Mumbai’s 15 million

inhabitants live in slums. They have

limited access to basic amenities like

clean water and sanitation and have no

security of tenure.

GuarantCo’s support is helping to re-

house up to 30,000 families in small but

permanent flats with access to clean

water, sanitation, electricity and clear

legal title. This will greatly improve living

conditions and the life chances of children

in particular. Unlike many schemes, the

initiative is voluntary and community led.

Such is the high value of land in Mumbai

that developers are prepared to provide

free, quality housing on the same site to

slum communities, in exchange for

permission to develop & sell part of the

freed up land.


Date: November 2009 Country: India

GuarantCo Guaranteed Amount: INR 940 million (out of initial financing of INR3.9 bn)

Total Project Cost : INR 55 billion

Beneficiaries & Financing Partners: Deutsche Bank, FMO, Cordiant Capital, ICF Debt Pool


This 5 year project financing facility provides Ackruti City Limited (since renamed to Hubtown Ltd) with

early stage funding that was not available from other sources. Most slums exist illegally on municipal land

and thus banks approached by slum dwellers and developers are not able to receive pledge of the land as

security. The process of acquiring ownership rights over the land is lengthy and not without risk. Ambiguity

in the application of local regulations prohibiting acquisition of land further adds to the local banks

discomfort.

Frontier Markets Fund Managers played an active role in structuring the financing and GuarantCo’s partial

credit guarantee enabled the facility to be increased by over 40%, thus helping it achieve critical size.

21

SHRIRAM II

INR 916 million partial credit guarantee of Tier II capital

raising by Shriram


Shriram finances small truck owner-

operators who would otherwise have to

borrow from unlicensed money lenders.

The finance enables thousands of poor

truck drivers to purchase their own

vehicles rather than remaining employees.

Shriram’s core business of commercial

vehicle finance continues its strong growth.

Shriram is also now seeking to expand its

products to finance other small

infrastructure equipment servicing India’s

growing infrastructure requirements.


Date: September 2010 Country: India

GuarantCo Guaranteed Amount: INR 916 million (USD 20 million)

Total Transaction Size: INR 2,250 million



Shriram needs to continually raise additional capital in line with the rising demand for its truck loans.

Deutsche Bank were seeking to syndicate INR 2,500 million of Tier II capital to allow Shriram to expand

their financing operations. Such capital issues compete with higher yielding assets for scarce capital in

India, making obtaining reasonably priced capital funds a challenge

GuarantCo and FMO’s participation enabled Shriram to raise the capital at affordable rates which can

be used to leverage much larger borrowings from commercial lenders

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KUMAR URBAN DEVELOPMENT LTD

INR 920 million partial credit guarantee to help finance the largest

slum redevelopment project in Pune, India


Like most major Indian cities, a large

proportion of Pune’s population lives in

slums. They have no security of tenure and

have limited access to basic amenities like

clean water and sanitation.

GuarantCo’s support is helping to re-house

more than 5,000 families in small but

permanent flats. These are provided for free

on the same site by KUDL in anticipation of

profits from development & sale of freed up

land. The flats will have clean water,

sanitation, electricity and clear legal title,

which will greatly improve living conditions

and the life chances of children in particular.

Tenants are helped to set up housing

societies to take over the running and

maintenance of their new buildings with an

endowment from KUDL.


Date: March 2011 Country: India

GuarantCo Guaranteed Amount: INR 920 million (out of initial financing of INR 2.5bn)

Total Project Cost : INR 24 bn



Following the success of the slum redevelopment scheme in Mumbai, the state government decided to

extend the scheme to other cities in the state, including Pune, a neighbouring city of Mumbai. KUDL’s

project is the first large scale slum redevelopment project under the scheme in Pune.

Commercial slum redevelopment projects typically require only initial seed funding, after which they are

self financing from the stage payments made by buyers of the commercial property element. However,

local banks avoid this seed funding i) discouraged by central bank regulators from lending for property

development and ii) put off by the complex social and environmental issues involved with slum re-

housing. The absence of a track record of successfully implemented projects in Pune made it even

tougher for the pioneering KUDL project to raise financing.

Given the lack of funding, KUDL began implementation of the project from their own resources,

completing only 10% of the project in the first 3 years. The 5 year project financing facility provided by

GuarantCo, DB & FMO will allow KUDL to complete the balance rehabilitation in the next 3 years

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Au FINANCIERS (INDIA) LTD

USD 20 million equivalent partial credit guarantee for long

term senior debt raised by Au Financiers (AuF)


AuF provides financing predominantly for

small entrepreneurs engaged in

commercial passenger/ goods transport

services in rural and semi urban areas of

India. Over 50% of AuF’s portfolio is in

Rajasthan, one of India’s poorest states.

These small entrepreneurs play an

important role in the provision of

transportation services in rural and semi

urban India, but are unable to get financing

from banks due to their lack of credit

history and small loan sizes. Such small

entrepreneurs are usually lowly paid

employees working in the transportation

sector, and AuF’s financing provides them

an opportunity for social and economic

mobility by owning their own vehicles or

other productive assets.

The facility provided will help AuF provide

c. 15,000 small loans, directly benefitting c.

22,000 people and indirectly benefitting

many more


Date: March 2013 Country: India

GuarantCo Guaranteed Amount: Up to the INR equivalent of USD 20 million

Total Transaction Size: Up to the INR equivalent of USD 60 million

Beneficiaries & Financing Partners: FMO, CDC Group


AuF is a rapidly growing company, reflecting the underserved nature of its core market. Besides

growing its core business of transportation services financing, AuF is also diversifying into providing

financing for housing and small business enterprises (usually linked to the transportation sector).

AuF’s debt requirements grow in line with its portfolio growth, and its strong track record and good

portfolio quality has meant it has been able to raise financing from Indian banks and financial

institutions when required. However to ensure that its funding arrangements keep pace with its growth

plans, AuF needed to diversify its sources of funding. The facility provided by GuarantCo, FMO and

CDC Group will provide AuF with stable long term funds with which it can continue providing affordable

loans to small entrepreneurs.

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http://www.aufin.in/index.php

http://www.aufin.in/index.php

PAKISTAN MOBILE COMMUNICATIONS LIMITED

PKR 980 million partial credit guarantee to credit enhance an

Islamic bond issue


Date: December 2013 Country: Pakistan

GuarantCo Guaranteed Amount: PKR 980 million (USD 9.2 million)

Total Transaction Size: PKR 8 billion (USD 75 million)

Beneficiaries & Financing Partners: Multiple investors


Pakistan Mobile Communications Limited (“PMCL”) is seeking to expand its network into currently

underserved rural areas thereby enabling access to telecommunication services for a wider proportion of

the population. To fund this capital expenditure PMCL decided to issue a local currency Islamic bond,

known as a Sukuk, of up to Pakistan Rupees (“PKR”) 8 billion (USD 75 million). Given the limited size of

the corporate bond market in Pakistan PMCL was constrained by existing investors having reached their

regulatory limits either in terms of exposure to PMCL or the telecommunications sector.

GuarantCo helped existing investors overcome their regulatory limits and also, by improving PMCL’s local

credit rating from AA- to AAA enabled conservative new Islamic investors to invest. The Sukuk was

structured as a "Service Ijara", the first time this structure has been used in Pakistan, thus helping build

new products and capacity in the local capital markets. Such innovations are an important element of

GuarantCo’s mission as it works to open up domestic markets to support essential infrastructure finance.


PMCL’s expansion into currently

underserved rural areas helps

democratise an important driver of

economic growth and inclusion.

Pakistan’s mobile phone sector is highly

competitive with very low tariffs – leaving

operators often reluctant to invest in new

capacity. As Pakistan’s leading mobile

phone operator, PMCL is best placed to

bear the considerable capital costs

involved with rural expansion.

GuarantCo, together with the PIDG

Technical Assistance Facility, is currently

evaluating an existing PMCL scheme to

provide remote text based educational

support to women and girls with a view to

funding further roll out in the most

inaccessible regions of NW Pakistan.

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SOFTLOGIC FINANCE

LKR 1.4 billion credit guarantee of long term senior funding

raised by Softlogic Finance


Softlogic finances small commercial

vehicle owner-operators and other

transport linked businesses, most of

whom would otherwise not have access to

formal financing from banks.

The demand for Softlogic’s loan/ lease

products is rapidly rising due to Sri Lanka’s

strong economy, but raising funding to

meet such growth is challenging.

GuarantCo’s support enables Softlogic to

raise affordable long term finance for the

benefit of its customers. The facility will

also help in the development of Sri Lanka’s

debt capital markets by increasing the

acceptability of credit enhanced

instruments.


Date: December 2013 Country: Sri Lanka

GuarantCo Guaranteed Amount: LKR 1.4bn (USD 10.5 million)

Total Transaction Size: LKR 1.4bn

Beneficiaries & Financing Partners: Various local investors, pensions funds and mutual funds


Softlogic needs to continually raise long term funding in line with the rising demand for its commercial

vehicle and other loans. However, due to the limitations of the Sri Lankan market, it is able to access

only short term, relatively expensive funding, which puts pressure on its profitability and also leads to

Asset / Liability mismatches.

In order to access Sri Lanka’s debt capital markets, the best source for long term finance for it, Softlogic

requires GuarantCo’s assistance. The facility of LKR 1.4bn provided to Softlogic enables it to raise 5-

year affordable funds through a pioneering credit enhanced Non Convertible Debenture issuance

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WATANIYA PALESTINE TELECOM

USD 10 million partial risk guarantee of two Palestinian

banks lending to a start-up mobile telecommunications

operator in the Palestinian Territories


Mobile phone penetration in Gaza and the

West Bank was a relatively low 29% in

2008 as the service was poor. WPT has

introduced high quality communications

services at affordable prices. Increased

competition is expected to lead to lower

tariffs and reliable services for consumers

which will reduce the cost of doing

business in all sectors. Given the

restrictions on movement for Palestinians,

good mobile telecommunications are

even more critical for social and economic

development than elsewhere.

The single largest private sector

investment in Palestine, WPT will

demonstrate to other investors that the

investment climate has improved and that

other infrastructure projects are possible.


Date: January 2009 Region: Palestinian Territories, West Bank

GuarantCo Guaranteed Amount: USD 10 million

Total Project cost: USD 145 million

Beneficiaries & Financing Partners: Bank of Palestine, Commercial Bank of Palestine


By providing a guarantee, GuarantCo enabled Wataniya Palestinian Telecom (“WPT”) to access USD 25m

of financing from two local banks, the Bank of Palestine and Commercial Bank of Palestine. WPT was

keen to involve as much financial support from the Palestinian banking sector as possible. BoP and CBoP

have substantial USD deposits (Palestine doesn’t have its own currency) and were enthusiastic to support

this major investment. However local bank regulations limited the amount they could lend without a

guarantee. Offshore financing also came from overseas lenders including IFC, Standard Bank and

Ericsson Credit (the latter two partially guaranteed by EKN, the export credit agency of Sweden)

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THAI BIOGAS ENERGY COMPANY

THB 425m credit guarantee of long term senior loan provided

by ICBC Thailand


TBEC’s plants clean waste water from

various agri-factories, generating biogass

in the process. The biogas is partly

supplied to the agri-factories to meet their

energy needs, replacing polluting coal/

diesel or HFO. The rest of the biogas is

used to produce electricity for supply to the

local grid.

TBEC’s plants reduce local air and water

pollution, provide renewable energy &

electricity, and help in mitigating climate

change through methane capture.

The guarantee facility introduces ICBC

Thailand to mid-size renewable energy

financing, which could encourage it to

provide more of such loans in the future.


Date: April 2014 Country: Thailand

GuarantCo Guarantee Amount: THB 425m (USD 13.5 million)

Total Transaction Size: THB 425m (USD 13.5m)

Beneficiaries & Financing Partners: ICBC Thailand


Thai Biogas Energy Company (“TBEC”) won contracts to build and operate two biogas plants in south

Thailand. However, its debt requirements for the two plants were too small for the project finance

departments of local banks, and too complex for the banks’ corporate banking departments. It therefore

required GuarantCo’s assistance in raising the needed finance.

The facility enabled TBEC to raise the long term, affordable financing it required for the two plants, and

further develop its plans for expansion in to poorer neighbouring countries. The expansion will be

further helped and accelerated by a Viability Gap Funding grant sanctioned by the PIDG Technical

Assistance Facility..

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guarantco portfolio presentation - limited release may 2014

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