· PDF fileThe financing was arranged by FMO and Transcapital, with participations from GuarantCo and ICF. Investec Bank participated with a further ZAR 120m of mezzanine financing

GuarantCoTransaction Portfolio

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Table of ContentsAfrica

Celtel Kenya 4ALAF Ltd 5Mabati Rolling Mills 6Celtel Chad 7Home Finance Guarantors Africa 8SA Taxi Finance I 9Spencon 10Tower Aluminium Group Ltd 11Kalangala Infrastructure Services 12Kalangala Renewables 13Cameroon Telecommunications Ltd 14Kaluworks Ltd 15Quantum Terminals Ltd 16SA Taxi Finance II 17Riley Packaging Uganda 18Rack Centre Ltd 19Zenith Bank Plc 20

Cameroon Telecommunications Ltd II 21

AsiaShriram I 23Wataniya Palestine 24Calcom Cement 25Ackruti City Limited/ Hubtown 26Shriram II 27Kumar Urban Development Ltd 28Au Financiers Ltd 29Pakistan Mobile Communications Limited 30Softlogic Finance 31Thai Biogas Energy Company 32

GuarantCo in Africa

CELTEL KENYA

KES 725 million partial credit guarantee to credit enhance alocal bond issue as part of a larger financing package for thesecond mobile telecommunications provider in Kenya.

Developmental Benefit

Celtel Kenya needed to restructure itsbalance sheet by exchanging costlyforeign currency shareholder loans withlocal currency debt. This allowed thecompany to run a more capital-efficientand competitive business and expand itsnetwork. This helped to reduce tariffs,thus making mobile services affordable toa greater proportion of the population.

Transaction Overview

Date: December 2005 Country: Kenya

GuarantCo Guaranteed Amount: Kenya Shillings (KES) 725 million (USD 12 million)

Total Transaction size: KES 3.5 billion

Financing Partners: FMO, DEG

GuarantCo Additionality:

As part of its initiative to maximise local currency financing, Celtel Kenya sought to raise Kenyan Shillingdebt from the local capital market. However, in order to place debt in the local capital market, Celtel Kenyaneeded to obtain credit enhancement from an AAA-rated institution. GuarantCo’s involvement enabledFMO to arrange and underwrite the required credit enhancement for the debt issuance.

The facility provided a major boost to the Kenyan capital market due to the demonstration effect of aprivate sector non-financial institution’s successful bond listing.

4

ALAF LIMITEDTZS 6.5 billion partial credit guarantee made available toprovide credit enhancement for a bond issue to finance theexpansion of a steel plant in Tanzania


The Safal group is one of the biggestproducers of steel roofing in Africa, widelyused in affordable housing. The proposedinvestment in their Tanzanian plantintroduced new and more affordableproduct lines, besides improving quality ofexisting production, thus providing accessto better quality housing products to lowand middle income households.


Date: June 2007 Country: Tanzania

GuarantCo Guaranteed Amount: Tanzania Shillings (TZS) 6.5 billion (USD 5.1 million)

Total Project Cost: TZS 37.3 billion

Financing Partner: IFC


The Safal Group proposed to partly fund its proposed new product line in Tanzania by local currencybonds, but needed credit enhancement to be able to access the local capital market. GuarantCo and IFC’sguarantee, covering 75% of the bond amount, was critical for Safal to begin the process of issuing thebonds.

The guarantee was agreed by IFC and GuarantCo in 2007 but was not in the end required as Alafeventually managed to access the bond market without credit enhancement in 2009. However, theavailability of the guarantee played an important role in catalysing the investment 2 years earlier thanwould have otherwise been possible as Safal was prepared to inject its equity portion up front knowing thedebt portion was secure. It is a feature of GuarantCo’s support that no early penalties are charged forcancellation, thus encouraging clients to graduate to purely commercial finance at the earliest opportunity.

5

MABATI ROLLING MILLSKES 750 million partial credit guarantee made available toprovide credit enhancement for a bond issue to finance theexpansion of a steel plant in Kenya


The Safal group is one of the biggestproducers of steel roofing in Africa, widelyused in affordable housing. MRM is theirflagship operation in E Africa. Demand forsteel roofing has been growing, in linewith the rapid growth in housing activity inthe region. The new capacity at Safal’sKenya plant will enable them to meet thegrowing demand while continuallyimproving product quality.


Date: June 2007 Country: Kenya

GuarantCo Guaranteed Amount: Kenyan Shillings (KES) 750 million (USD 9.7 million)

Total Project Cost: KES 3 billion

Financing Partners: IFC


The Safal Group proposed to partly fund its proposed plant capacity expansion in Kenya by local currencybonds, but needed credit enhancement to be able to access the local capital market. GuarantCo and IFC’sguarantee, covering 75% of the bond amount, was critical for Safal to begin the process of issuing thebonds.

The availability of the guarantee in 2007, while not eventually required, played an important role incatalysing the investment 18 months earlier than would have otherwise been possible. Safal’s access toKenya’s domestic capital market without a guarantee, a significant and welcome sign of increased marketsophistication, was facilitated by GuarantCo and IFC’s timely support. GuarantCo was then able to recycleits capacity for other projects in the region.

6

CELTEL CHADXAF 3.5 billion partial credit guarantee for Afriland Bank toprovide additional lending to the leading mobiletelecommunications provider in Chad


The link between mobile phone use anddevelopment has been widelydocumented, particularly in Africa. Thefurther network expansion, partiallyfinanced by the GuarantCo covered loan,has helped expand the network into morerural areas. Celtel Chad leads the way inexpanding the mobile network, so formany areas this will be the first time theyhave had access to a mobile services. Inaddition, the ability to roam over a largerproportion of the country is particularlyuseful for Chad as it has a significantnomadic population.


Date: October 2007 Country: Chad

GuarantCo Guaranteed Amount: CFA Franc (XAF) 3.5 billion (USD 8 million)

Total Transaction size: XAF 14.8 billion

Beneficiaries & Financing Partners: Afriland First Bank, FMO


In line with Celtel policy to increase local currency financing, Celtel Chad sought additional CFA financingfor capital expenditure and to refinance USD shareholder loans. The joint guarantee by FMO andGuarantCo enabled Afriland First Bank to increase its loan beyond its normal lending cap to meet CeltelChad’s full debt requirements.

7

HOME FINANCE GUARANTORS AFRICAUSD 5 million Stop-Loss Insurance for HFGA, who will reinsureCollateral Replacement Indemnities that facilitate access to homeloans by low and lower middle income households


Access to affordable home loans is amajor obstacle to economicdevelopment for most low and lowermiddle income families in developingcountries. Many families are unable tobuy or improve a home because oflimited access to finance. There islender reluctance to enter this marketdue to the inability of borrowers toprovide sufficient down-payments andresulting perceived default risk.At the same time, few developerschoose to build low cost housingbecause there is no prospect ofpotential buyers raising finance.

HLGC’s business model has workedwell in South Africa for 20 years andHFGA, with GCo’s help, aims toreplicate this success in sub SaharanAfrica.


Date: September 2010 Country: Ghana, Kenya, Rwanda, Uganda and Malawi

GuarantCo Guaranteed Amount: USD 5 million equivalent in local currencies

Total Project Cost : N/A

Beneficiaries & Financing Partners: HFGA, Home Loan Guarantee Company (HLGC), various local insurance companies


HFGA is introducing innovative home loan protection products to new markets in conjunction with localinsurance companies in order to stimulate local banks to widen access to finance. HLGC, who has set upHFGA based on their successful South African model, is a not for profit social enterprise and has notaccumulated sufficient reserves to fully capitalise HFGA. HFGA therefore faced difficulty meeting regulators’minimum capital requirements without backing from GuarantCo. Given the pioneering nature of HFGA’swork, such backing is not available from either commercial insurers or even dfi’s. The initial USD 5m facilitymay be increased depending on demand.

Additional technical assistance funds are being used for a capacity building programme with local insurersand banks and to help provide financial literacy training for borrowers. An output based aid programme isalso being considered that will provide targeted subsidies to make Collateral Replacement Indemnitiesaffordable to the lowest income quartile of households.

8

SA TAXI FINANCE IZAR 139 million partial credit guarantee of the senior trancheof SA Taxi Finance’s loan program


Date: September 2010 Country: South Africa

GuarantCo Guaranteed Amount: ZAR 139 million (USD 20 million)

Total Transaction Size: ZAR 760 million

Beneficiaries & Financing Partners: FMO, Investec, ICF Debt Pool


SA Taxi were seeking to syndicate a ZAR 1,700m senior tranche out of a total ZAR 1,925m loan program.A reduced risk appetite in the international and local market meant that an initial ZAR 635m was placedwith the DFI community. The financing was arranged by FMO and Transcapital, with participations fromGuarantCo and ICF. Investec Bank participated with a further ZAR 120m of mezzanine financing.

South Africa, being an upper middle income country, would not normally qualify for support fromGuarantCo. However, given the pro-poor nature of the financing and SA Taxi’s inability to access the localmarkets following the financial crisis, GuarantCo obtained special approval from its shareholders tosupport the financing.


The South African taxi (minibus) industryemploys an estimated 150,000 taxis andmany more individuals, directly andindirectly. The industry is a critical part ofthe country’s transportation network,especially in the disadvantaged suburbanareas. 78% of all non private journeys inS Africa are made in minibus taxis.SA Taxi Group, the leader in taxi finance,has provided seed capital to at least19,500 broad based black SMMEs (all ofwhom are previously disadvantagedindividuals).SA Taxi is also critical to thegovernment’s Recap program that aimsto improve the operations and regulationof the previously chaotic and at-timesviolent minibus taxi industry. The Recapprogram will also result in improvedemission norms and passenger safetystandards.

9

SPENCON USD 15 million performance bond guarantee facility for a local east African construction company


Performance Bonds are a prerequisite forcarrying out any construction project in Africaand they are the most significant financialbottleneck for the company. Large constructioncontracts, often donor funded, are regularlyawarded to international constructioncompanies, at 15 – 25% higher prices, becauselocal companies cannot furnish the fullperformance bonds required.

GuarantCo’s facility will help lower the cost ofinfrastructure in the target countries by enablinggreater competition and local private sectorparticipation. There will be continued expansionand employment for over 800 permanentSpencon staff and over 3,700 semi skilledpersonnel across East Africa.


Date: October 2010 Country: Uganda, Kenya, Tanzania

GuarantCo Guaranteed Amount: USD 15 million equivalent in local currencies

Total Transaction size : USD 30 million equivalent in local currencies

Beneficiaries & Financing Partners: Standard Chartered Bank


Spencon is a mid sized local civil works contractor headquartered in Nairobi specialising in the water,roads and power sectors. They were having trouble obtaining additional performance bond lines fromtheir banks in order to bid for and execute projects in East Africa. Standard Chartered, their mainbanker, was unable to provide the full requirement of USD 30 million, largely due to bank regulations onsingle obligor limits. GuarantCo’s guarantee made it possible for Standard Chartered to offer the fulladditional facility required.

10

TOWER ALUMINIUM GROUP LIMITEDPartial credit guarantees totalling NGN 2.21 billion to creditenhance the maiden bond issue of the largest manufacturer ofaluminium roofing in West Africa


GuarantCo’s support for Tower has had astrong demonstration effect, helping buildfurther capacity in the embryonic Nigeriancapital markets. It has also stretched thetenor to 7 years from the typical 5 years forprevious corporate bonds, which is a crucialstep toward meeting the requirements offuture infrastructure related bond issueswhere longer tenor is essential.

Following a request for assistance,GuarantCo is also working with the NigerianSecurities & Exchange Commission to setup training and mentoring of their staff.

Tower produces aluminium roofing, acomponent of low cost housing. It offersadvantages over steel roofing, lasting 5times longer, at prices affordable to lowincome families in Nigeria and other parts ofWest Africa


Date: September 2011 Country: Nigeria

GuarantCo Guaranteed Amount: NGN 2.21 Billion (USD 14.7 million equivalent)

Total bond issue : NGN 4.63 Billion (Tranche A: NGN 3.63 Billion and Tranche B: NGN 1 Billion)

Beneficiaries & Financing Partners: First Trustees Limited (on behalf of investors)


In 2008 Tower Aluminium Group Limited (“Tower”), the largest manufacturer of aluminium roofing in WestAfrica, financed a new factory with USD denominated bank loans. In late 2008, as the full impact of theglobal financial crisis hit Nigeria, the Naira devalued by c 25% against the USD. Tower’s revenues aremostly in Naira and the impact of the devaluation was to significantly increase the cost of servicing its USDfinancial liabilities. The viability of the expanded business was thus impacted severely.

Tower recognised the need to diversify away from relying on the bank market and decided to refinance itsUSD liabilities by issuing a 7 year Naira denominated corporate bond, thus enabling the company to alsoreduce its currency risk and extend the tenor of its debt. Tower was however unable to secure the “A” localrating required to be able to access local pension funds, key investors in the Nigerian corporate bondmarket. GuarantCo was able to use its local AAA rating in Nigeria to credit enhance Tower’s bond issue,thereby making it eligible for pension fund investors. This was the first time such a structure had beenused in Nigeria and there were many regulatory and procedural challenges which could not have beenovercome without GuarantCo’s patient developmental approach.

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KALANGALA INFRASTRUCTURE SERVICESJoint partial credit guarantee totalling USD 2.2 million coveringpart of the financing for two new ferries, a road rehabilitation andcertain water facilities for Bugala Island in Lake Victoria, Uganda


The enhanced infrastructure is required inorder to satisfy the growing and unmetdemand and will be transformative forBugala Island. It is highly unlikely that theexisting dilapidated and unsafe ferry wouldhave been replaced in the foreseeablefuture, nor the water supply systemsinstalled. In addition, the ability for theproject to support the water supply systemsis due to the project’s multi-revenuestreams, diversification and economies ofscale and scope provided by other aspectsof the project. As a stand-alone project,these water schemes are highly challengingto finance and operate.


Date: December 2011 Country: Uganda

GuarantCo Guaranteed Amount: USD 1.8 million

Total note issue : USD12 million (guaranteed tranche USD 5 million)

Beneficiaries & Financing Partners: Nedbank Limited, EAIF and USAID (as co-guarantor)


This is a highly developmental project to bring basic utilities to the largest island in Lake Victoria and hasrequired imaginative financing to attract the debt required to meet the challenging economics. GuarantCoplayed a crucial role over a five year period in underwriting (at times for substantially larger amounts),structuring and executing the finance. This is the first time that GuarantCo has provided a joint guaranteewith USAID and the first time that Nedbank has been the beneficiary of a guarantee from GuarantCo. Inparticular, GuarantCo worked closely with USAID to amend their standard form documentation in order toalign it more appropriately with a project financed structure.

The Kalangala Infrastructure Services project consists of the ownership, financing, upgrade, construction,operation and maintenance of two roll-on roll-off passenger and vehicle ferries, the upgrade of the island’s66km main road from a dirt road to a gravel road, and a series of solar-powered pump based water supplysystems, in each case to serve the population, institutions and businesses of the Island. This project is partof an integrated project with Kalangala Renewables.

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KALANGALA RENEWABLESJoint partial credit guarantee totalling USD 1.4 million coveringpart of the financing for a hybrid solar generation system andassociated transmission and distribution systems for BugalaIsland in Lake Victoria, Uganda


At present there is no operational grid-basedelectricity supply on Bugala Island with mostof the population, schools, institutions andbusinesses on the Island lacking access toreliable and affordable electricity. Theextension of daytime activities, such asstudying, will add to the Island’s productivityand education. More specifically, anticipatedimprovements include the following:

- Decrease in energy costs per kwh- Access to more employment opportunities-Improved literacy due to improved lighting-Reduced time spent on collecting fuel-Better healthcare through improvedmedications and sanitation measures-Improved ability to preserve and marketagricultural products- Improved marketing of the island as atourist destination thereby helping todiversify the Island’s economy.


Date: December 2011 Country: Uganda

GuarantCo Guaranteed Amount: USD 1 million

Total note issue : USD12 million (guaranteed tranche USD 5 million)

Beneficiaries & Financing Partners: Nedbank Limited, EAIF and USAID (as co-guarantor)


GuarantCo played a crucial role over a five year period in underwriting (at times for substantially largeramounts), structuring and executing the finance. This is the first time that GuarantCo has provided a jointguarantee with USAID and the first time that Nedbank has been the beneficiary of a guarantee fromGuarantCo. In particular, GuarantCo worked closely with USAID to amend their standard formdocumentation in order to align it more appropriately with a project financed structure.

Kalangala Renewables consists of a 1.6 MW (nominal) hybrid solar and diesel power generation system,33kv transmission system, low voltage distribution system and the installation of a prepaid meteringsystem to households and businesses on the Island. This project is part of an integrated project withKalangala Infrastructure Services.

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CAMEROON TELECOMMUNICATIONS LIMITEDPartial credit guarantee totalling XAF 20 billion to allow StandardChartered to overcome regulatory single obligor limits andincrease its lending to CamTel to support the roll out of a NationalBroadband Network


GuarantCo’s support for CamTel has helpedimprove the financial viability of the NBNproject by allowing the company to bettermatch its debt service obligations with itsrevenues. It has also stretched the tenor ofthe loan from the typical 3 years to 6 yearswhich further improves the financial viabilityof the NBN project where longer tenor isessential.

World Bank research highlights thatCameroon lags behind the averagebenchmarks for Sub-Saharan Africa forinternet access. Consequently, the NBN is aproject that has significant developmentalvalue to Cameroon as well as the rest of theCentral African region.


Date: December 2012 Country: Cameroon

GuarantCo Guaranteed Amount: XAF 20 Billion (USD 20 million equivalent)

Total Project Cost: USD 203 million

Beneficiaries & Financing Partners: Standard Chartered Cameroon SA


Cameroon Telecommunications Limited (“CamTel”) is presently the sole provider of fixed line broadbandin Cameroon which it sells wholesale to internet service providers (ISPs) under the name CamNet. TheNational Broadband Network (“NBN”) project forms a critical part of the Central African Backbone (“CAB”)project that is being developed by the World Bank and African Development Bank and which will linkCameroon, Chad and the Central African Republic to each other, the rest of Africa and the World.

To finance the USD 203 million NBN project cost CamTel secured a USD 168 million export credit facilityfrom China EXIM Bank (“CEXIM”) as the NBN project is to be delivered by Huawei, a Chinese OEM.However as all of CamTel’s revenues are in CFA Francs (“XAF”) the company’s preference was for theremainder of the financing to be denominated in XAF. CamTel approached Standard Chartered CameroonSA (“SCC”) to arrange a XAF debt facility for the remaining financing requirement but SCC found that allthe local banks, including itself, were constrained in lending to CamTel by regulatory single obligor limits inCameroon. To avoid reverting to off-shore hard currency financing for CamTel SCC approachedGuarantCo to provide a partial credit guarantee to help overcome the regulatory single obligor limit and toprovide the required additional XAF financing to CamTel.

14

KALUWORKS LIMITEDKSH 750 million partial credit guarantee to credit enhance themaiden bond issue of the largest manufacturer of aluminium roofingin East Africa


GuarantCo’s support for Kaluworks provideda strong demonstration effect, helping amedium –sized company access the capitalmarkets which typically have only beenavailable to the largest corporates. It hasalso stretched the tenor to 7 years from thetypical 5 years for previous corporate bonds,which is a crucial step toward meeting therequirements of future infrastructure relatedbond issues where longer tenor is essential.

Kaluworks produces aluminium roofing, acomponent of low cost housing. It offersadvantages over steel roofing, lasting 5times longer, at prices affordable to lowincome families in Kenya and other parts ofEast Africa.


Date: December 2012 Country: Kenya

GuarantCo Guaranteed Amount: KSH 750 million (USD 9 million equivalent)

Total Project Cost: USD 35 million

Beneficiaries & Financing Partners: Ropat Trustees Limited (on behalf of the bond investors)


Kaluworks predicts that the aluminium roofing market in East Africa will grow at a CAGR of circa 30% overthe next 5 years and its sales volumes had grown to the point that the company had reached productioncapacity. Kaluworks’ embarked on an expansion programme in 2011 and had raised the majority of thefunding requirement from local banks in the form of a USD medium term loan. To finance the remainingfunding requirement Kaluworks decided to issue a local currency bond to raise KSH 1.0 billion (USD 12million).

The Kenyan bond market is very well established and the Nairobi Stock Exchange (“NSE”) has proved anattractive avenue to raise medium to long term capital for many companies albeit mainly the largercorporate borrowers such as Safaricom and KenGen. As Kaluworks was a medium sized corporate andthe bond was to be unsecured Kaluworks’ local advisors advised the company that it would require creditenhancement via a third-party guarantor to enable it to raise the required amount of debt and tenor itdesired from local investors. GuarantCo was approached to use its AAA local rating to help credit enhancethe bond and enable Kaluworks to raise more debt on the terms necessary to support the feasibility of theproject.

15

QUANTUM TERMINALS LTDGHS 12m partial credit guarantee of long term senior fundingraised by the Quantum Group for the construction andoperation of an LPG loading and storage terminal in Atuabo,Ghana


Ghana suffers from a severe lack of gasindustry infrastructure resulting in lowpenetration of LPG and high usage ofwood and charcoal (taken from largely nonrenewable resources), both of whichproduce high levels of CO2 emissionsrelative to LPG.

With domestic LPG production due to startin 2014, Quantum Terminal’s facilityprovides critical support infrastructure,facilitating the flow of domestic LPG to theend user.

GuarantCo’s support enabled Quantum toraise the required local currency financingcomponent for the project which willcontribute to increasing availability ofaffordable LPG in the country, therebyhelping to lower CO2 emissions and ratesof deforestation.


Date: December 2013 Country: Ghana

GuarantCo Guaranteed Amount: GHS12 million (USD 5.4 million)

Total Transaction Size: USD 10.8 million

Beneficiaries & Financing Partners: Standard Chartered Bank Ghana

GuarantCo Additionality:Quantum Terminals is part of an Oil & Gas trading Group operating in Ghana. The borrower requiredfunding in order to construct an LPG storage and loading terminal in Atuabo, Ghana. The terminal is toprovide key supporting infrastructure for domestic LPG to be produced by the Government ownedAtuabo gas processing plant.

Quantum required both hard and local currency financing for the project in order better match itsrevenue profile. Standard Chartered, the Group’s main banker, was unable to provide the fullrequirement of USD 10.8 million, largely due to Central Bank regulations on single obligor limits.GuarantCo’s guarantee made it possible for Standard Chartered to offer the local currency tranche forthe project alongside the hard currency tranche, thereby helping the company to achieve an optimalcurrency mix in the financing

16

SA TAXI FINANCE IIZAR 150m partial credit guarantee for ZAR 200m additionalfinancing for SA Taxi


Date: December 2013 Country: South Africa

GuarantCo Guaranteed Amount: ZAR 150 million (USD 15 million)

Total Transaction Size: ZAR 200 million

Beneficiaries & Financing Partners: ABSA


To meet additional growth in demand for its specialist leasing product, SA Taxi has anon-going financing requirement. Reduced risk appetite in the international and localmarket meant that an initial round of funding was placed with the DFI community.Through this additional financing, GuarantCo was able to support Absa’s firsttransaction with the Company. The financing was arranged by Transcapital.


The South African taxi (minibus) industry isestimated at over 200,000 taxis and hascreated more than 400,000 sustainable jobsdirectly. The industry is a critical part of thecountry’s transportation network, especiallyin the disadvantaged suburban areas, andaccounts for over 80% of all public transporttrips

17

RILEY PACKAGING UGANDA LIMITEDUSD 8.4m partial credit guarantee of long term seniorfunding raised by the Riley Packaging for the constructionand operation of an waste paper recycling plant in Kyagwe,Uganda


Like many of its neighbours, Uganda haslittle to no recycling system in place.Waste paper is mostly disposed of throughdumping (both at landfill sites and illegallyin public areas) or burnt. As economicdevelopment continues, production of suchwaste will only increase.

The introduction of a waste recycling plantwill not only benefit the business throughincreased use of cost effective recycledpaper, but also introduce and increaseawareness of recycling programmes inUganda, with plans to extend schemes intoneighbouring countries.

GuarantCo’s support enabled Riley toraise the required financing component forthe project, which will contribute toimproved recycling practices in Uganda,and reducing the use of virgin paper inEast Africa’s largest packaging business.


Date: September 2014 Country: Uganda


Total Transaction Size: USD 18 million

Beneficiaries & Financing Partners: Standard Chartered Bank

GuarantCo Additionality:Riley Packaging is part of Corpack Africa, East Africa’s largest packaging production group. Theborrower required funding in order to construct a 120 tonne per day waste paper recycling plant to belocated in Kyagwe, Uganda. The plant will supply recycled paper to the other parts of the CorpackGroup, contributing to reduced use of virgin paper in the business.

Riley required a loan facility to fund the construction of the plant. GuarantCo’s guarantee made itpossible for Standard Chartered, the banker to the company, to offer the full loan facility for the tenorrequired for the business.

18

RACK CENTRE LIMITEDUSD 9.35m guarantee of a 5 year USD 11 million project loanto Rack Centre Limited for the expansion of the first Tier IIIdata centre in Nigeria.


The lack of cost and energy efficient ICTinfrastructure is a major constraint to doingbusiness in in Nigeria. Rack Centre willexpand the availability of highquality/availability ICT infrastructure whichis critical for ICT systems. This improvesprivate sector connectivity and publicsector competitiveness.

Vendor neutral datacentres play a similarrole to major airport hubs. In the same wayas multiple airlines interconnect and offeraccess to any destination, the vendorneutral datacentre acts as a hub for manyInternet Service Providers, providingchoice and resilience. As such they form acritical part ICT infrastructure; RackCentre’s development will help to developthe sector and improve services tobusinesses in Nigeria.





Beneficiaries & Financing Partners: Standard Chartered Bank (SCB)

GuarantCo Additionality:Rack Centre is the first vendor neutral data centre in Nigeria designed to the UpTime Institute’s Tier IIIstandard. Exponential growth in demand for data storage in Nigeria led Rack Centre to seek to expandits existing capacity, and consequently the bank approached Standard Chartered for a USD 11 millionloan to fund the expansion project.

Due to single obligor limits, SCB approached GuarantCo to provide a partial credit guarantee of up toUSD 9.35 million to enable them to extend the required 5 year USD 11 million loan. The loan will enableRack Centre to double its existing data storage capacity and to refinance existing short term debt withmore appropriate longer tenor financing.

The intervention of GuarantCo enabled SCB to provide the entire loan facility required by the client,enabling the expansion of the facility and extending the tenor profile of the businesses’ debt, allowingRack Centre to better manage its asset and liability profile.

19

ZENITH BANK PLCUSD 22.5m guarantee of a 5 year USD 90 million on-lendingfacility to Zenith Bank, used to finance a number of projectscritical to the newly privatised power generation companiesand distribution companies in Nigeria.


A lack of power is one of Nigeria’s biggestbarriers to economic growth andconsequently poverty alleviation.

Significant investments is needed to boostcurrent infrastructure levels and grow thenetwork to optimum capacity but access tofunding is a key constraint for allparticipants in the power sector.

The on-lending facility provided to Zenithfocussed on supporting the capitalexpenditure programmes of the distributionand generation companies in Nigeria,helping them to fund priority projectsrequired to stabilise existing powerinfrastructure and create a strong basefrom which incremental growth could takeplace.





Beneficiaries & Financing Partners: Standard Chartered Bank, USAID

GuarantCo Additionality:The Nigerian power sector requires considerable investment, but funding for infrastructure is limited.Zenith Bank is one of the largest banks in Nigeria and had both the reach and capacity to identify theright power sector borrowers and projects to fund, but required financial support to fund such projects.

The on-lending facility provided to Zenith was focussed on supporting the capital expenditureprogrammes of newly privatised power generation and distribution companies in Nigeria. The support ofUSAID and GuarantCo was critical to enabling Standard Chartered to provide a facility of this size (USD90 million) to Zenith, which consequently facilitated development of critical infrastructure in the powersector.

The intervention of USAID and GuarantCo also provided additional benefit to the proposed financing byextending tenor from the commercial market out by a further 2 years for a total tenor of 5 years.

20

CAMEROON TELECOMMUNICATIONS LIMITED IIPartial credit guarantee totalling XAF 6 billion to allow StandardChartered to overcome regulatory single obligor limits andincrease its lending to fund Camtel’s expansion of the existingEVDO CDMA wireless network


GuarantCo’s support for Camtel hashelped improve the financial viability ofthe EVDO project by allowing thecompany to better match its debtservice obligations with its revenues.

World Bank research highlights thatCameroon lags behind the averagebenchmarks for Sub-Saharan Africa forinternet access. The EVDO is a projectis expected to contribute to increasinginternet penetration rates in the country.Mobile operators in the country will alsopurchase bandwidth from Camtel,hence the project will help the overallsector develop in Cameroon.


Date: December 2014 Country: Cameroon

GuarantCo Guaranteed Amount: XAF 6 Billion (USD 12 million equivalent)

Total Project Cost: USD 18.9 million

Beneficiaries & Financing Partners: Standard Chartered Cameroon SA


Cameroon Telecommunications Limited (“Camtel”), whilst completing the implementation of theNBN project funded via the first Camtel transaction, decided to expand capacity and functionality inthe existing EVDO CDMA network. The resultant increase in capacity and coverage of its highspeed wireless broadband service will enhance Camtel’s quality of service and is expected toincrease Camtel’s subscribers by more than 600,000.

To finance the USD 18.9 million EVDO project, Camtel approached Standard Chartered Bank(“SCB”) for a medium term loan of USD 18.9 million (equivalent in XAF). SCB was constrained byits regulatory single obligor limit in Cameroon and could only extend USD 6.9m of the requiredfunding before hitting its single obligor limit. GuarantCo’s guarantee allowed Standard Chartered tooffer the full amount of the financing in local currency; hard currency financing would havenegatively impacted the financial viability of the project and thus GuarantCo’s interventionfacilitated full XOF funding and minimised potential fx risk for the business.

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GuarantCo in Asia

SHRIRAM IINR 900 million partial credit guarantee of the mezzanine tranche of a truck finance receivables securitisation in India


Shriram finances small truck owner-operators who would otherwise have toborrow from unlicensed money lenders.The finance enables thousands of poortruck drivers to purchase their ownvehicles rather than remainingemployees.

The mezzanine guarantee was a productnot available from Indian investors. Thisintervention enabled a much larger capitalmarkets transaction to be completedwithout which Shriram would havereduced its support to the sector.

The Shriram group is one of the corporateleaders in HIV awareness and reductionprogrammes. The Shriram Transportbusiness is essential to the programmes,as the company has unrivalled access totruck drivers to run health and educationprograms.


Date: December 2008 Country: India

GuarantCo Guaranteed Amount: INR 900m (USD 19 million)

Total Transaction Size: INR 21 billion

Beneficiaries & Financing Partners: Deutsche Bank, FMO


Deutsche were seeking to syndicate an INR 2,036 million mezzanine tranche in a securitisation of truckfinance receivables but were struggling as there was no investor appetite for mezzanine debt in India.GuarantCo, in collaboration with FMO, was able to guarantee the mezzanine tranche thereby enabling thesuccessful securitisation.

GuarantCo and FMO’s facility helped demonstrate the commercial viability of mezzanine guarantees in thenascent Indian securitisation market and today Shriram is able to get such guarantees from private sectorbanks. GuarantCo and FMO’s intervention helped this transition to more sophisticated financial products,thus building additional capacity in the local capital markets

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WATANIYA PALESTINE TELECOMUSD 10 million partial risk guarantee of two Palestinian banks lending to a start-up mobile telecommunications operator in the Palestinian Territories


Mobile phone penetration in Gaza and theWest Bank was a relatively low 29% in2008 as the service was poor. WPT hasintroduced high quality communicationsservices at affordable prices. Increasedcompetition is expected to lead to lowertariffs and reliable services for consumerswhich will reduce the cost of doingbusiness in all sectors. Given therestrictions on movement for Palestinians,good mobile telecommunications areeven more critical for social and economicdevelopment than elsewhere.

The single largest private sectorinvestment in Palestine, WPT willdemonstrate to other investors that theinvestment climate has improved and thatother infrastructure projects are possible.


Date: January 2009 Region: Palestinian Territories, West Bank

GuarantCo Guaranteed Amount: USD 10 million

Total Project cost: USD 145 million

Beneficiaries & Financing Partners: Bank of Palestine, Commercial Bank of Palestine


By providing a guarantee, GuarantCo enabled Wataniya Palestinian Telecom (“WPT”) to access USD 25mof financing from two local banks, the Bank of Palestine and Commercial Bank of Palestine. WPT waskeen to involve as much financial support from the Palestinian banking sector as possible. BoP and CBoPhave substantial USD deposits (Palestine doesn’t have its own currency) and were enthusiastic to supportthis major investment. However local bank regulations limited the amount they could lend without aguarantee. Offshore financing also came from overseas lenders including IFC, Standard Bank andEricsson Credit (the latter two partially guaranteed by EKN, the export credit agency of Sweden)

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CALCOM CEMENT INR 1,120 million partial credit guarantee of two Indian banks’lending to a new cement plant in Assam, India.


The project will create the largest cementproduction facility in the North-East regionof India which suffers from a chroniccement production deficit. It will help bringdown the abnormally high cement pricesin the region by reducing the substantialcost of freight that suppliers currently bearfor cement brought in from mainlandIndia.

It is also the largest single private sectorinfrastructure investment in the NorthEast. Besides providing employment andincreasing economic activity in thetroubled region, the project will supportother infrastructure projects such ashousing, roads and hydropower therebymultiplying the developmental benefit.


Date: September 2009 Country: India

GuarantCo Guaranteed Amount: INR 1,120million (USD 25 million)

Total Project Cost: INR 4,076 million

Beneficiaries & Financing Partners: HDFC Bank, Axis Bank, Cordiant Capital


Although the economic and security situation in the north-east region of India has vastly improved in therecent past, Indian banks are still cautious lending to projects in the region. HDFC Bank, the lead arranger,was struggling with syndication of the project debt. GuarantCo’s guarantee enabled the additionalfinancing required for the project to achieve financial close.

The amount required was above GuarantCo’s normal maximum exposure so INR 480m of the total INR1,120m was syndicated by GuarantCo to Cordiant Capital, a Montreal based Emerging Market fundmanager, thus leveraging in further private sector support.

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ACKRUTI CITY LIMITED/ HUBTOWNINR 940 million partial credit guarantee for lending to several slum redevelopment projects in Mumbai, India.


Nearly half of Mumbai’s 15 millioninhabitants live in slums. They havelimited access to basic amenities likeclean water and sanitation and have nosecurity of tenure.

GuarantCo’s support is helping to re-house up to 30,000 families in small butpermanent flats with access to cleanwater, sanitation, electricity and clearlegal title. This will greatly improve livingconditions and the life chances of childrenin particular. Unlike many schemes, theinitiative is voluntary and community led.

Such is the high value of land in Mumbaithat developers are prepared to providefree, quality housing on the same site toslum communities, in exchange forpermission to develop & sell part of thefreed up land.


Date: November 2009 Country: India

GuarantCo Guaranteed Amount: INR 940 million (out of initial financing of INR3.9 bn)

Total Project Cost : INR 55 billion

Beneficiaries & Financing Partners: Deutsche Bank, FMO, Cordiant Capital, ICF Debt Pool


This 5 year project financing facility provides Ackruti City Limited (since renamed to Hubtown Ltd) withearly stage funding that was not available from other sources. Most slums exist illegally on municipal landand thus banks approached by slum dwellers and developers are not able to receive pledge of the land assecurity. The process of acquiring ownership rights over the land is lengthy and not without risk. Ambiguityin the application of local regulations prohibiting acquisition of land further adds to the local banksdiscomfort.

Frontier Markets Fund Managers played an active role in structuring the financing and GuarantCo’s partialcredit guarantee enabled the facility to be increased by over 40%, thus helping it achieve critical size.

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SHRIRAM IIINR 916 million partial credit guarantee of Tier II capitalraising by Shriram


Shriram finances small truck owner-operators who would otherwise have toborrow from unlicensed money lenders.The finance enables thousands of poortruck drivers to purchase their ownvehicles rather than remaining employees.

Shriram’s core business of commercialvehicle finance continues its strong growth.Shriram is also now seeking to expand itsproducts to finance other smallinfrastructure equipment servicing India’sgrowing infrastructure requirements.


Date: September 2010 Country: India

GuarantCo Guaranteed Amount: INR 916 million (USD 20 million)

Total Transaction Size: INR 2,250 million



Shriram needs to continually raise additional capital in line with the rising demand for its truck loans.Deutsche Bank were seeking to syndicate INR 2,500 million of Tier II capital to allow Shriram to expandtheir financing operations. Such capital issues compete with higher yielding assets for scarce capital inIndia, making obtaining reasonably priced capital funds a challenge

GuarantCo and FMO’s participation enabled Shriram to raise the capital at affordable rates which canbe used to leverage much larger borrowings from commercial lenders

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KUMAR URBAN DEVELOPMENT LTDINR 920 million partial credit guarantee to help finance the largestslum redevelopment project in Pune, India


Like most major Indian cities, a largeproportion of Pune’s population lives inslums. They have no security of tenure andhave limited access to basic amenities likeclean water and sanitation.

GuarantCo’s support is helping to re-housemore than 5,000 families in small butpermanent flats. These are provided for freeon the same site by KUDL in anticipation ofprofits from development & sale of freed upland. The flats will have clean water,sanitation, electricity and clear legal title,which will greatly improve living conditionsand the life chances of children in particular.

Tenants are helped to set up housingsocieties to take over the running andmaintenance of their new buildings with anendowment from KUDL.


Date: March 2011 Country: India

GuarantCo Guaranteed Amount: INR 920 million (out of initial financing of INR 2.5bn)

Total Project Cost : INR 24 bn



Following the success of the slum redevelopment scheme in Mumbai, the state government decided toextend the scheme to other cities in the state, including Pune, a neighbouring city of Mumbai. KUDL’sproject is the first large scale slum redevelopment project under the scheme in Pune.

Commercial slum redevelopment projects typically require only initial seed funding, after which they areself financing from the stage payments made by buyers of the commercial property element. However,local banks avoid this seed funding i) discouraged by central bank regulators from lending for propertydevelopment and ii) put off by the complex social and environmental issues involved with slum re-housing. The absence of a track record of successfully implemented projects in Pune made it eventougher for the pioneering KUDL project to raise financing.

Given the lack of funding, KUDL began implementation of the project from their own resources,completing only 10% of the project in the first 3 years. The 5 year project financing facility provided byGuarantCo, DB & FMO will allow KUDL to complete the balance rehabilitation in the next 3 years

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Au FINANCIERS (INDIA) LTDUSD 20 million equivalent partial credit guarantee for longterm senior debt raised by Au Financiers (AuF)


AuF provides financing predominantly forsmall entrepreneurs engaged incommercial passenger/ goods transportservices in rural and semi urban areas ofIndia. Over 50% of AuF’s portfolio is inRajasthan, one of India’s poorest states.

These small entrepreneurs play animportant role in the provision oftransportation services in rural and semiurban India, but are unable to get financingfrom banks due to their lack of credithistory and small loan sizes. Such smallentrepreneurs are usually lowly paidemployees working in the transportationsector, and AuF’s financing provides theman opportunity for social and economicmobility by owning their own vehicles orother productive assets.

The facility provided will help AuF providec. 15,000 small loans, directly benefitting c.22,000 people and indirectly benefittingmany more


Date: March 2013 Country: India

GuarantCo Guaranteed Amount: Up to the INR equivalent of USD 20 million

Total Transaction Size: Up to the INR equivalent of USD 60 million

Beneficiaries & Financing Partners: FMO, CDC Group


AuF is a rapidly growing company, reflecting the underserved nature of its core market. Besidesgrowing its core business of transportation services financing, AuF is also diversifying into providingfinancing for housing and small business enterprises (usually linked to the transportation sector).

AuF’s debt requirements grow in line with its portfolio growth, and its strong track record and goodportfolio quality has meant it has been able to raise financing from Indian banks and financialinstitutions when required. However to ensure that its funding arrangements keep pace with its growthplans, AuF needed to diversify its sources of funding. The facility provided by GuarantCo, FMO andCDC Group will provide AuF with stable long term funds with which it can continue providing affordableloans to small entrepreneurs.

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http://www.aufin.in/index.php

http://www.aufin.in/index.php

PAKISTAN MOBILE COMMUNICATIONS LIMITEDPKR 980 million partial credit guarantee to credit enhance anIslamic bond issue


Date: December 2013 Country: Pakistan

GuarantCo Guaranteed Amount: PKR 980 million (USD 9.2 million)

Total Transaction Size: PKR 8 billion (USD 75 million)

Beneficiaries & Financing Partners: Multiple investors


Pakistan Mobile Communications Limited (“PMCL”) is seeking to expand its network into currentlyunderserved rural areas thereby enabling access to telecommunication services for a wider proportion ofthe population. To fund this capital expenditure PMCL decided to issue a local currency Islamic bond,known as a Sukuk, of up to Pakistan Rupees (“PKR”) 8 billion (USD 75 million). Given the limited size ofthe corporate bond market in Pakistan PMCL was constrained by existing investors having reached theirregulatory limits either in terms of exposure to PMCL or the telecommunications sector.

GuarantCo helped existing investors overcome their regulatory limits and also, by improving PMCL’s localcredit rating from AA- to AAA enabled conservative new Islamic investors to invest. The Sukuk wasstructured as a "Service Ijara", the first time this structure has been used in Pakistan, thus helping buildnew products and capacity in the local capital markets. Such innovations are an important element ofGuarantCo’s mission as it works to open up domestic markets to support essential infrastructure finance.


PMCL’s expansion into currentlyunderserved rural areas helpsdemocratise an important driver ofeconomic growth and inclusion.Pakistan’s mobile phone sector is highlycompetitive with very low tariffs – leavingoperators often reluctant to invest in newcapacity. As Pakistan’s leading mobilephone operator, PMCL is best placed tobear the considerable capital costsinvolved with rural expansion.

GuarantCo, together with the PIDGTechnical Assistance Facility, is currentlyevaluating an existing PMCL scheme toprovide remote text based educationalsupport to women and girls with a view tofunding further roll out in the mostinaccessible regions of NW Pakistan.

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SOFTLOGIC FINANCELKR 1.4 billion credit guarantee of long term senior fundingraised by Softlogic Finance


Softlogic finances small commercialvehicle owner-operators and othertransport linked businesses, most ofwhom would otherwise not have access toformal financing from banks.

The demand for Softlogic’s loan/ leaseproducts is rapidly rising due to Sri Lanka’sstrong economy, but raising funding tomeet such growth is challenging.

GuarantCo’s support enables Softlogic toraise affordable long term finance for thebenefit of its customers. The facility willalso help in the development of Sri Lanka’sdebt capital markets by increasing theacceptability of credit enhancedinstruments.


Date: December 2013 Country: Sri Lanka

GuarantCo Guaranteed Amount: LKR 1.4bn (USD 10.5 million)

Total Transaction Size: LKR 1.4bn

Beneficiaries & Financing Partners: Various local investors, pensions funds and mutual funds

GuarantCo Additionality:Softlogic needs to continually raise long term funding in line with the rising demand for its commercialvehicle and other loans. However, due to the limitations of the Sri Lankan market, it is able to accessonly short term, relatively expensive funding, which puts pressure on its profitability and also leads toAsset / Liability mismatches.

In order to access Sri Lanka’s debt capital markets, the best source for long term finance for it, Softlogicrequires GuarantCo’s assistance. The facility of LKR 1.4bn provided to Softlogic enables it to raise 5-year affordable funds through a pioneering credit enhanced Non Convertible Debenture issuance

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THAI BIOGAS ENERGY COMPANYTHB 425m credit guarantee of long term senior loan providedby ICBC Thailand


TBEC’s plants clean waste water fromvarious agri-factories, generating biogas inthe process. The biogas is partly suppliedto the agri-factories to meet their energyneeds, replacing polluting coal/ diesel orHFO. The rest of the biogas is used toproduce electricity for supply to the localgrid.

TBEC’s plants reduce local air and waterpollution, provide renewable energy &electricity, and help in mitigating climatechange through methane capture.

The guarantee facility introduces ICBCThailand to mid-size renewable energyfinancing, which could encourage it toprovide more of such loans in the future.


Date: April 2014 Country: Thailand

GuarantCo Guarantee Amount: THB 425m (USD 13.5 million)

Total Transaction Size: THB 425m (USD 13.5m)

Beneficiaries & Financing Partners: ICBC Thailand

GuarantCo Additionality:Thai Biogas Energy Company (“TBEC”) won contracts to build and operate two biogas plants in southThailand. However, its debt requirements for the two plants were too small for the project financedepartments of local banks, and too complex for the banks’ corporate banking departments. It thereforerequired GuarantCo’s assistance in raising the needed finance.

The facility enabled TBEC to raise the long term, affordable financing it required for the two plants, andfurther develop its plans for expansion in to poorer neighbouring countries. The expansion will befurther helped and accelerated by a Viability Gap Funding grant sanctioned by the PIDG TechnicalAssistance Facility.

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ESSEL CLEAN SOLU HYDROPOWERNPR 2750m credit guarantee of long term senior loansprovided by various Nepalese banks


The Lower Solu project will add c. 11% toNepal’s electricity capacity, and will reducethe severe electricity shortage in thecountry, which sees 12-16 hour dailypower cuts in winter months.

The project is the largest private sectorplant in Nepal, and the first project to haveboth local and international debt. Theproject is also the first in Nepal to involvean international financial guarantor.

The transaction also introduces Nepalesebanks to long tenor project finance,incorporating international best practices.The project is thus also expected to have asignificant demonstration impact for futureprojects


Date: Dec 2014 Country: Nepal

GuarantCo Guarantee Amount: NPR 2,750m (USD 28.2 million)

Total Transaction Size: USD 191m

Beneficiaries & Financing Partners: Prime Commercial Bank, Nepal SBI Bank, Prabhu Bank, Siddhartha Bank, and HIDCL

GuarantCo Additionality:Essel Clean Solu Hydropower Ltd (“ECS”) won a tender to develop the 82 MW Lower Solu Run-of-the-river hydropower project, and targeted funding it with a mix of local and foreign currency debt. However,the local banking system in Nepal lacked the capacity to extend, without credit support, the 16.5 yr c.USD 30m equivalent local currency debt that the project required in order to align the currency profilesof its revenues and debt obligations.

GuarantCo’s credit guarantees, covering 90% of the local banks’ exposures, enabled ECS to raise therequired local currency funding and achieve financial close in a timely manner.

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Documents

· PDF fileThe financing was arranged by FMO and Transcapital, with participations from GuarantCo and ICF. Investec Bank participated with a further ZAR 120m of mezzanine financing