Technical assistance

TAF

GuarantCo

Providing local currency guarantees for infrastructure financing and providing dollar-denominated guarantees in fragile and conflict-affected countries

Projects that reached financial close in 2016

Ghana Early Power

Kenya KOOBA Datacentre

Nigeria Accugas Limited

Nigeria Mixta Real Estate Plc (“Mixta Nigeria”)

Nigeria InfraStructure Credit Guarantee Company Limited (InfraCredit)

Mali Albatros Energie Mali SA

 

Projects that became operational in 2016

Cameroon Cameroon Telecommunication Limited

Cameroon Cameroon Telecommunication Limited II

Nigeria Rack Centre

Pakistan Fatima Fertilizer Company Limited

Pakistan Pakistan Mobile Telecommunications Limited (Mobilink)

Sri Lanka Softlogic Finance

South Africa South Africa Development Finance Company III

Uganda Kalangala Infrastructure Services

Uganda Kalangala renewables

Achievements in 2016

GuarantCo closed six guarantees, with a total exposure of $191.9m.

In Mali GuarantCo provided a local currency guarantee to support the development of a 90MW oil-fired power station, which will add around 10% to the country’s total generation capacity. The project is the first IPP to be developed in the post-conflict country for a decade.

In Nigeria GuarantCo’s guarantee for a local currency bond will support the development of some 5,000 affordable homes during the next six years. The bond was the first of its kind in Nigeria.

Other notable highlights

GuarantCo progressed its strategy to build a $1bn portfolio by 2020, boosting the development impact it generates.

A new office and associated hires were agreed for Singapore and new appointments were made at the Nairobi office, supplementing GuarantCo’s capacity to work on the ground in its target countries. These offices will co-locate with InfraCo Asia and InfraCo Africa respectively in 2017.

GuarantCo was delighted to receive new funding support from the Government of Australia, which will underpin the expansion of its work to the poorest regions of south and south-east Asia. GuarantCo’s capital was further enhanced by the approval of a £40m callable capital facility from UK aid.

GuarantCo's growth was also underpinned by the appointment of GuarantCo Management Company Ltd – a subsidiary of Cardano Development – as its new fund manager following a competitive retender process. Cardano Development's specialism in currency risk will support GuarantCo's unique work to mobilise local currency finance for infrastructure in challenging frontier markets.

During 2016 GuarantCo was able – thanks to its strong credit ratings – to dispense with its previous counter-guarantee facility and replace it with a more appropriate stand-by facility from FMO. This reduced costs, enabled greater flexibility in its operations and was a crucial step in accessing commercial insurance.

2017 and Beyond

Currency volatility, transfer and conversion concerns, coupled with falling commodity prices, are driving governments and businesses to look to domestic financing options, particularly for infrastructure.

GuarantCo expects to build on this momentum, collaborating with other entities to mobilise more local currency financing for infrastructure. This work has already begun in Nigeria, where GuarantCo helped launch InfraCredit, the country’s first local currency-focussed guarantor. In 2017 it will explore options for replication of the scheme in south Asia.

By supporting local developers and entrepreneurs to access sources of domestic capital, GuarantCo’s work will help build capacity and capability within local markets.

GuarantCo will also undertake an innovative new partnership with the London Stock Exchange to progress efforts to encourage global investment in local currency bonds for infrastructure.

Annual Report 2016

DevCo

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Annual Report 2016

Annual Report 2016

Annual Report 2016

Annual Report 2016