Investment Policy

Key parameters

GuarantCo’s policy and operational guidelines are further detailed below.  In general these guidelines are widely drafted to enable GuarantCo to be as flexible as possible in order to ensure it can provide effective and useful products and can be run on commercial lines:
 

Investment size, cover and tenor

The guarantee cover available from GuarantCo for any single transaction is limited to a minimum local currency equivalent of USD 5 million (although lesser amounts will be considered for highly developmental projects) and a maximum equivalent of USD30 million.  GuarantCo can provide up to 100% cover but this will only be available in limited circumstances and when dictated by the market.  Typically, the financing covered by a guarantee will be up to three times the size of the guarantee (30% to 70% cover), although this can be significantly more for securitisation transactions. 
GuarantCo can cover debt and subordinated or mezzanine financing but not equity.  Maximum tenor is 15 years.  
 

Form of Guarantee

GuarantCo can provide a variety of contingent products including partial credit and partial risk guarantees, first loss guarantees, tenor extension or liquidity guarantees and can provide joint guarantees or counter guarantees as may be required for a particular project.
 

Eligible Countries

GuarantCo is able to support projects in all low income and lower middle income countries in Africa, Asia, Latin and Central America and the Caribbean, as listed in columns I II and III on the “DAC List of ODA Recipients” (see Eligible Countries).  
 

Eligible Companies

GuarantCo can support infrastructure projects developed by the following entities:

  • Special purpose vehicle or project companies 
  • Private operating infrastructure companies 
  • Privatised companies 
  • Parastatals or public corporations 
  • Municipalities.


Eligible sectors

GuarantCo can support projects in the following sectors:

  • Energy supply, including generation, transmission and distribution 
  • Water/waste services 
  • Transportation 
  • Telecommunications 
  • Gas transportation, distribution and storage 
  • Urban infrastructure 
  • Mining, provided the financing is for related infrastructure services with access by third parties 
  • Other activities that impact positively on the development of the relevant country’s basic infrastructure and promote the objectives of GuarantCo, including the manufacturing of components used in infrastructure (such as cement and steel) and infrastructure associated with agribusiness.

In general, GuarantCo will support the construction of new facilities or the expansion or refurbishment of existing facilities.  In addition, GuarantCo can support the refinancing of existing facilities where cross border debt is replaced by local financing.
 

    Social and Environmental Impact

    All of the projects in which GuarantCo invests must adhere to local and international environmental, social and health and safety standards as appraised by Scott Wilson on behalf of GuarantCo. Further information can be found at www.scottwilson.com.