| Product Name |
Partial Credit Guarantee
Link to Product Website |
| Provider Name |
AfDB (African Development Bank)
|
| Product Definition |
Partial Credit Guarantees (PCGs) cover a portion of scheduled repayments of private loans or bonds against all risks. PCGs could be utilized to support mobilization of private funds for project finance, financial intermediation and policy- based finance.
a. Project Finance. PCGs can be used for both public sector and private sector investment projects, especially in infrastructure. These guarantees can be used to encourage the extension of maturity and improvement in market access. The guarantee could cover the principal for bullet maturity bonds, or later maturity principal payments of amortizing syndicated loans. (Example of MTN in Box 1)
b. Financial Intermediation. Institutions such as Banks can use PCGs to support the mobilization of long-term resources from both international and domestic capital markets. The ADB guarantee can be structured to cover the bullet principal repayment on a bond, or later maturities of a syndicated loan. PCGs for financial intermediaries can also be used from the financial sector development perspective to help deepen domestic money and capital markets. In this context, the Bank can also guarantee short and medium term instruments such as commercial paper issued by both private and public financial institutions. |
| Product Type |
Partial Credit Guarantee
|
| Defined Risks Covered |
Comprehensive Risk
|
| Eligible Form of Investments |
Bonds
Bank Loans
Non-Bank Loans
Shareholder Loans
|
| Eligible Currency of Underlying Investment Covered by this Product
| Both local and foreign currency
|
| Eligible Countries & Regions |
| Algeria |
Angola |
Benin |
| Botswana |
Burkina Faso |
Burundi |
| Cameroon |
Cape Verde |
Central African Republic |
| Chad |
Comoros |
Congo, Democratic Republic of |
| Congo, Republic of |
Djibouti |
Egypt |
| Equatorial Guinea |
Eritrea |
Ethiopia |
| Gabon |
Gambia |
Ghana |
| Guinea |
Guinea Bissau |
Ivory Coast |
| Kenya |
Lesotho |
Liberia |
| Madagascar |
Malawi |
Mali |
| Mauritania |
Mauritius |
Morocco |
| Mozambique |
Namibia |
Niger |
| Nigeria |
Rwanda |
Sao Tome and Principe |
| Senegal |
Seychelles |
Sierra Leone |
| Somalia |
South Africa |
Sudan |
| Swaziland |
Tanzania |
Togo |
| Tunisia |
Uganda |
Zambia |
| Zimbabwe |
|
| Eligible Applicants |
All
|
| Eligible Sector |
n.a. |
| Maximum Tenor |
15+ to 20 years
|
| Max. Absolute Amount (USD) |
0 to 50 MM
|
| Max. % of Project Costs Covered |
25+% to 50%
|
| Max. % of Export Content Covered |
Max./under 50%
|
| Fees |
Fixed
o front-end fees: no front-end fees for public sector borrowers and 1% of possible max exposure under guarantee for NSG
o standby fee: 0.75% for public sector borrowers and 1.0% for NSG.
o guarantee fee: lending spread (for AfDB loans) + risk premium associated with particular guarantee structure
o appraisal fee: fees for private sector projects to cover legal and other expenses incurred by the bank during initiation, appraisal, and underwriting process
|
| Other Conditions |
Sovereign Counterguarantee: No
Anti-Corruption and Governance Standards: No
Environmental standards: Yes
Social standards (incl. Human Rights Standards; Labor Rights Standards): No
Others:
|
| Source(s) |
n.a. |
| For more information, contact |
Director, Private Sector Services Department, AfDB (African Development Bank)
Email: private-sector@afdb.org
Phone: 216 71 850 270
|
| Attachments |
Financial Products Brochure - June 2005.PDF
Bank Policy on Guarantees.PDF
|
| Additional Links |
n.a.
|
| Deals |
n.a. |
|
| Provider Name |
AfDB (African Development Bank)
|
| Institution Type |
PUBLIC: Multilateral Development Bank
|
| Ownership |
77 member countries |
| Head Office |
African Development Bank Angle des trois rues: Avenue du Ghana, Rue Pierre de Coubertin, Rue Hedi Nouira
BP. 323 1002
Tunis Belvedère |
| Provider Home Country |
Tunisia |
| Rating |
Aaa/AAA/AAA |
| Main Risk Mitigation Products |
Partial Credit Guarantee (AfDB)
Policy-Based Guarantee (AfDB)
Sub-sovereign Finance (AfDB) |
| Attachments |
n.a.
|
| Additional Links |
|
| Entered On: |
11/02/2007 at 03:31 PM |
| Updated On: |
06/04/2009 at 02:17 PM |
