Wednesday 8th July Biogas and Sustainable Finance: Taking a Systems Approach to Funding success
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Biogas and Sustainable Finance: Taking a Systems Approach to Funding success Wednesday 8th July #WorldBiogasSummit21
Systemic business model innovation
New patterns of relationship,
impact, value creation, and
investment
Biogas and Sustainable Finance: Taking a Systems Approach to Funding success
Justin Goldstein
Vice President
Goldman Sachs
#WorldBiogasSummit21
Biogas and Sustainable Finance: Taking a Systems Approach to Funding success
Dr Timothy Afful-Koomson
Chief Climate Finance Officer
African Development Bank
#WorldBiogasSummit21
GuarantCo Enabling long-term infrastructure finance in local currency Quarter 1 2021
Who we are
Enabling infrastructure development
In lower income countries in Africa and Asia through the provision of long-term local currency credit solutions
HIGHLY RATED SIGNIFICANT IMPACT OUR MANDATE OUR PRODUCTS
AA- A1 55 43m Mobilise private sector funding into
infrastructure in Africa and Asia.
GuarantCo can provide a variety of credit
solutions as required for a particular project
Fitch Moody’s projects in people with improved The guarantee cover available from including: partial credit, tenor extension,
22 countries access to infrastructure GuarantCo for a single transaction is liquidity extension, EPC contractor and
235K $5.6bn
between USD 5 million to USD 50 portfolio guarantees. In addition, GuarantCo
AAA AAA million equivalent in local currency.
The maximum tenor is 15 years.
can provide other solutions depending on
individual project requirements.
Bloomfield Pacra jobs created investments
since 2005 enabled
Our philosophy Our funders
GuarantCo is funded by the governments
Build capacity of the United Kingdom, Switzerland,
Australia and Sweden through the PIDG GuarantCo is part of the Private Infrastructure
Trust, the Netherlands through FMO and Development Group (PIDG) alongside the
Develop partnerships the PIDG Trust, France through a stand-by Technical Assistance Fund (TAF), DevCo, InfraCo
facility and Global Affairs Canada through Africa, InfraCo Asia and the Emerging Africa
a repayable facility and Global Affairs Infrastructure Fund (EAIF). GuarantCo’s activities
Deliver impact Canada through a repayable facility. are managed through GuarantCo Management
Company by the Cardano Development Group.
7Our fund manager
Cardano Development
Cardano Development, through its subsidiary
GuarantCo Management Company, took over
management of GuarantCo in May 2016. ILX is an emerging market credit fund to provide BIX Capital stimulates the use of impact
investors with cost-effective access to syndicated DFI- certificates for essential household
Cardano Development is committed to helping loans and support DFIs in mobilising private capital. products in developing countries.
frontier economies develop and prosper, by
introducing innovative financial risk management
products and services to make people and
businesses in local economies more resilient and
protected against risk.
The Water Finance Facility mobilises large-scale TCX contributes to reducing
With around €5 billion assets under management private investment financing for water and currency risks by hedging these
and €1.2 billion capital under management, sanitation services in developing countries. risks in frontier markets.
predominantly sourced from international
development finance institutions, the company
supports five funds with ongoing management
services and corporate governance oversight.
In addition to GuarantCo, Cardano Development has
incubated and grown the following funds: Frontclear provides guarantees to
enhance inter-banking collateralised
trading in frontier economies.
8Where GuarantCo fits in the Private Infrastructure Development Group
Financial close Commercial operation
Concept Early stage development Construction Operation
Technical Assistance
DevCo
InfraCo Africa
Able to hold equity stakes during construction and operation
InfraCo Asia
The Emerging Africa Infrastructure Fund (EAIF)
GuarantCo
Technical assistance Project preparation Debt, guarantees and mezzanine
PIDG Technical Assistance grants support PIDG InfraCo Africa and InfraCo Asia originate, develop, EAIF provides long-term foreign currency loans in sub-
companies at any stage of the project lifecycle. structure, invest and manage projects. They can Saharan Africa.
DevCo helps fund PPP advisory services to governments, make equity investments in innovative and GuarantCo provides local currency guarantees to banks
delivered through the World Bank Group’s IFC. pioneering projects, or to remedy the absence of and bond investors to develop capital markets.
capital.
9Our vision
To become a centre of excellence for local currency
credit solutions for infrastructure finance in lower
income countries thereby assisting with the
alleviation of poverty.
10Our mission
To become a market-based, recognised provider of
contingent credit solutions aimed at enhancing the
availability and role of local currency finance for
infrastructure projects and developing local capital markets.
11Our philosophy
Build capacity Develop partnerships Deliver impact
12Significant developmental impact on people’s lives
Since we were established in
2005, GuarantCo has made a
57 *
transactions in
45
million people with improved
significant impact on the lives 22 countries access to infrastructure
of people through the
transactions for which we have
provided local currency credit
solutions.
234
thousand jobs
5.8 **
USD billion investments
created enabled
In 2019 PIDG harmonised the basis for calculating metrics across the group. For GuarantCo this meant recognising
impact from financial close rather than recourse agreement. Cumulative totals have been restated to reflect this change.
Since GuarantCo was established in 2005:
* 51 financially closed and 6 recourse agreements
** 5.8 billion = Total Investment Commitments and 4.9 billion = Private Sector Investments
Source: PIDG Annual Review 2020
13Our mandate
Mobilise private sector funding into infrastructure in Africa and Asia
The guarantee size available from GuarantCo can provide a variety of
GuarantCo for a single transaction is credit solutions as required for a
between USD 5 million - USD 50 million particular project including:
equivalent in local currency. The maximum
• Partial credit guarantees
tenor is 20 years.
• Tenor extension guarantees
• Liquidity extension guarantees
• EPC contractor guarantees
• Portfolio guarantees
In addition, GuarantCo can provide
other solutions depending on individual
project requirements.
14We have established a track record of innovation and growth
Total run-rate portfolio size (USD)
2005 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Nairobi Singapore
GuarantCo incorporated as 1st Local currency 1st Local currency 1st Local currency 1st Local currency 1st local currency office opens office opens 1st local currency 1st dual-currency 1st NSE and LSE
a Mauritian company and securitisation corporate bond bond in Sri Lanka & project financing project financing Corporate bond in guarantee in green Kenyan
tender launched for a new in India in Nigeria sukuk in Pakistan in Nepal in Cameroon Vietnam and Ghana Bangladesh bond listing for
fund manager Acorn
1st Leverage facility applied 1st Leverage facility cancelled
increases guarantee beneficiaries rely solely on
1st guarantees 1st guarantee 1st guarantee
capacity to USD 146m GuarantCo’s standalone
of synthetic local in Jordan in Madagascar
credit ratings
currency green bond and Tanzania
AAA AAA 1st transaction in India
1st Local currency Provides 1st co-guarantee RATED RATED of InfraCredit Nigeria as
bond issue by with US AID in Uganda operations commence
Celtel Kenya PACRA 1st co-financing
Bloomfield Change in Fund Manager
Provides 1st guarantee Pakistan to GMC Limited, with Asian
West Africa
for Standard Chartered Bank part of Cardano Development
Co guarantee platform Bank
Development
A1 MoU signed with African
RATED Strategic Development Bank
partnership signed
with LSE to support
1st one PIDG project GuarantCo, Moody’s
EAIF and InfraCo Africa combine developing markets’
on Kalangala project in Uganda local currency bond 1st LSE bond listings
AA- issuance
for Quantum Terminals
RATED
and Sindicatum
Fitch Ratings
15How guarantees work
How our guarantees work
17Investment policy
Key guarantee terms
Criteria Description
Guarantee size USD 5-50 million in local currency equivalent.
Currency Local currency focus.
Hard currency guarantees possible in fragile and conflict affected areas.
Tenor Up to 20 years.
Guarantee types Partial credit guarantees
Tenor extension guarantees
Liquidity extension guarantees
EPC contractor guarantees
Portfolio guarantees
Beneficiaries Private sector infrastructure debt providers – project finance, corporate debt, mezz debt, bonds etc.
Clients Borrowers must be private sector entities although in certain cases also municipalities / sub-nationals and parastatals can be supported.
Security Typically pari passu security required alongside all other senior debtors.
Other key terms Limit on guaranteeing up to 50 percent of the long-term debt position of a company’s balance sheet.
Upfront fee, guarantee fees, monitoring fees.
English law.
Environmental and IFC Performance Standards.
social standards
18Portfolio overview
Current portfolio Q1 2021
Country % By country
Bangladesh 7.3%
Gabon 3.1%
Ghana 9.4%
India 15.1%
Jordan 4.9%
Kenya 3.4%
Madagascar 1.1%
Malawi 3.9%
Mali 0.9%
Multi-country (Africa) 3.0%
Multi-country (others) 5.8%
19
Nepal 2.7%
Nigeria 6.1%
Pakistan 14.7%
Philippines 2.6%
South Africa 0.1%
COUNTRIES
Tanzania 5.8% Countries with active projects*
Thailand 1.5%
Countries eligible for funding
Togo 3.3%
Uganda 0.2%
Vietnam 9.1%
As per Q1 2021 data *Plus two multi-country projects
20Current portfolio
By sector
Digital communications Gas transportation, Oil transportation, Manufacturing related to
Power / energy supply Transportation infrastructure distribution and storage distribution and storage Social infrastructure infrastructure Multi-sector
Bangladesh
Gabon
Ghana
India
Jordan
Kenya
Madagascar
Malawi
Mali
Multi-country (Africa)
Multi-country (others)
Nepal
Nigeria
Pakistan
Philippines
South Africa
Tanzania
Thailand
Togo
Uganda
Vietnam
Total (USD m) $292.1 $122.5 $49.0 $15.5 $11.9 $150.7 $42.5 $253.3 $937.4
Total current exposure (%) 31.2% 13.1% 5.2% 1.7% 1.3% 16.1% 4.5% 27.0% 100%THANK YOU
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