GuarantCo partners with Standard Chartered Bank to support Spencon - December 2010
In December 2010 GuarantCo partnered with Standard Chartered Bank to provide a $30m facility to Spencon, a major local civil works contractor founded in 1979 and headquartered in Nairobi, with operations throughout East Africa. Spencon employs over 800 permanent and additional semi skilled personnel across East Africa, and specialises in the water, roads and power sectors.
Spencon, like most other local construction companies, has often been unable to participate in bidding for large construction projects due to an inability to submit adequate Performance/ Bid Bonds, which are prerequisites for bidding for and carrying out any construction project in Africa. This inability is often the result of single obligor limits imposed on banks by regulators.
Unable to get the full required Bid Bond lines of $30m from their main banker Standard Chartered, Spencon approached GuarantCo for assistance. By guaranteeing$15m of the facility GuarantCo helped Standard Chartered overcome their single obligor limits and made it possible for them to offer the full additional facility required.
Large construction contracts in Africa, often donor funded, are regularly awarded to international construction companies, who then subcontract much of the work to local companies like Spencon at rates 15 - 25% below the original contract price. By enabling Spencon to bid for more of such contracts, GuarantCo’s facility will help lower the cost of infrastructure in the target countries and help Spencon to grow.
Spencon Official Website