GuarantCo’s vision is to become a centre of excellence for local currency guarantees in low income countries. In order to meet this vision, GuarantCo provides:
- Risk mitigation instruments to credit enhance local currency debt issuance by the private, municipal and parastatal infrastructure sectors in lower income countries throughout the world; and
- Funds for technical assistance to develop and structure transactions that could include a contingent product provided by GuarantCo or to support local capacity building and capital market development (through the Technical Assistance Facility (“TAF”)).
Reasoning behind GuarantCo
GuarantCo was conceived to help address and overcome existing constraints in the supply of local currency debt financing to infrastructure projects and to help match the demand for local medium and long-term funding.
The GuarantCo concept came from the Private Infrastructure Development Group (“PIDG”) which is a multi-donor, member-managed organisation. Current PIDG members include: the UK Department for International Development (“DFID”), the Swiss State Secretariat for Economic Affairs (“SECO”), the Netherlands Ministry of Foreign Affairs (“DGIS”), the Swedish International Development Cooperation Agency (“Sida”), the World Bank, the Austrian Development Agency (“ADA”), Irish Aid, Kreditanstalt für Wiederaufbau ("KfW"), and the Australian Agency for International Development (AusAid).
GuarantCo is a Mauritian company owned indirectly by the PIDG members through the PIDG Trust and, in the case of DGIS, through FMO (the Dutch development finance company). GuarantCo is run and managed on a commercial basis by Frontier Markets Fund Managers Limited (“FMFML”), which is a private limited liability company established in Mauritius by its shareholders: Standard Bank Group, FMO and Emerging Markets Partnership ("EMP"). FMFML has primary responsibility for the overall management and supply of advisory services to GuarantCo under an exclusive long term Contract. See also GuarantCo's Structure.
The advisers to FMFML are Frontier Markets Fund Managers, who are responsible for originating, structuring and negotiating transactions, the selection and recommendation of investments to the Board of GuarantCo, the monitoring of GuarantCo’s portfolio and the development of GuarantCo’s products.