RISK MITIGATION: What are Updates & Proposals on Risk Mitigation Products?

Product Name Partial Credit Guarantee
Link to Product Website
Provider Name IFC (International Finance Corporation)
Product Definition A partial credit guarantee represents a promise of full and timely debt service payment up to a predetermined amount. Typically, the sum that IFC pays out under the guarantee covers creditors irrespective of the cause of default. The guarantee amount may vary over the life of the transaction based on the borrower’s expected cash flows and creditors’ concerns regarding the stability of these cash flows.

IFC tailors guarantees to meet the needs of both borrower and creditors. They are structured to reduce the probability of default of the debt instrument and increase the recovery if default occurs. In general, IFC’s objective is to offer the minimum amount of guarantee necessary to facilitate a successful transaction.

Partial guarantees can be either in local currency (for domestic transactions) or foreign currency (for cross-border transactions). Local currency partial guarantees are most applicable for a company or project that has local currency revenues but lacks access to local currency financing of the desired tenor. A partial guarantee can help the client better match assets and liabilities by obtaining local currency financing, mitigating the foreign exchange risk that would arise from borrowing in foreign currency.

Cross-border partial guarantees are best for a client company that cannot access international markets on its own because of the high-risk premium associated with the country in which it is domiciled. With a cross-border partial guarantee a client may gain access to international markets by mitigating the sovereign risk associated with the borrowing.

Product Type Partial Credit Guarantee
Defined Risks Covered Comprehensive Risk
More on Risks Covered
Eligible Form of Investments Bonds
Bank Loans
Non-Bank Loans
Shareholder Loans
More on Eligible Investments
Eligible Currency of Underlying Investment Covered by this Product Both local and foreign currency
Eligible Countries & Regions
Afghanistan   Albania   Algeria  
Angola   Antigua and Barbuda   Argentina  
Armenia   Azerbaijan   Bahamas  
Bahrain   Bangladesh   Barbados  
Belarus   Belize   Benin  
Bhutan   Bolivia   Bosnia and Herzegovina  
Botswana   Brazil   Bulgaria  
Burkina Faso   Burundi   Cambodia  
Cameroon   Cape Verde   Central African Republic  
Chad   Chile   China  
Colombia   Comoros   Congo, Democratic Republic of  
Congo, Republic of   Costa Rica   Croatia  
Cyprus   Czech Republic   Djibouti  
Dominica   Dominican Republic   East Timor  
Ecuador   Egypt   El Salvador  
Equatorial Guinea   Eritrea   Estonia  
Ethiopia   Fiji   Gabon  
Gambia   Georgia   Ghana  
Greece   Grenada   Guatemala  
Guinea Bissau   Guyana   Haiti  
Honduras   Hungary   India  
Indonesia   Iran, Islamic Republic   Israel  
Ivory Coast   Jamaica   Jordan  
Kazakhstan   Kenya   Kiribati  
Korea, Republic of    Kuwait   Kyrgyz Republic  
Lao PDR   Latvia   Lebanon  
Lesotho   Liberia   Lithuania  
Macedonia   Madagascar   Malawi  
Malaysia   Maldives   Mali  
Malta   Marshall Islands   Mauritania  
Mauritius   Mexico   Micronesia  
Moldova   Mongolia   Montenegro  
Morocco   Mozambique   Myanmar  
Namibia   Nepal   Nicaragua  
Niger   Nigeria   Oman  
Pakistan   Palau   Panama  
Papua New Guinea   Paraguay   Peru  
Philippines   Poland   Romania  
Russian Federation   Rwanda   Samoa  
Saudi Arabia   Senegal   Serbia  
Seychelles   Sierra Leone   Slovak Republic  
Slovenia   Solomon Islands   Somalia  
South Africa   Sri Lanka   St. Kitts and Nevis  
St. Lucia   Sudan   Swaziland  
Syrian Arab Republic   Tajikistan   Tanzania  
Thailand   Togo   Tonga  
Trinidad and Tobago   Tunisia   Turkey  
Turkmenistan   Uganda   Ukraine  
United Arab Emirates   Uruguay   Uzbekistan  
Vanuatu   Venezuela   Vietnam  
Yemen   Zambia   Zimbabwe  
More on Eligible Countries
Eligible Applicants MIXED (PUBLIC-PRIVATE): Private Joint Ventures (51% or more private-owned)
PRIVATE: All
Eligible Sector Electricity Generation: Conventional Thermal (coal, gas, oil-fired)
Electricity: Transmission
Electricity: Distribution
Maximum Tenor Over 20+ years
Max. Absolute Amount (USD) Over 350+ MM
Max. % of Project Costs Covered 100%
Max. % of Export Content Covered Over 85+%
Fees Market-based
n.a.

Other Conditions Sovereign Counterguarantee: No
Anti-Corruption and Governance Standards: Yes link
Environmental standards: Yes link
Social standards (incl. Human Rights Standards; Labor Rights Standards): Yes link
Others:
Source(s) n.a.
For more information, contact
Structured Finance Department, IFC (International Finance Corporation)
Email: structuredfinance@ifc.org
Attachments n.a.
Additional Links n.a.
Deals Municipality of Guatemala City Project, Guatemala, 2006
City of Johannesburg, South Africa, 2004
Sociedad Acueducto, Alcantarillado y Aseo de Barranquilla, Colombia, 2003
Tlalnepantla Municipal Water Conservation, Mexico, 2003
TelecomAsia, Thailand, 2003
Bharti Telecom, India, 2000

Provider Name IFC (International Finance Corporation)
Institution Type PUBLIC: Multilateral Development Bank
Ownership 179 member countries
Head Office 2121 Pennsylvania Avenue, NW, Washington, DC, 20433
Provider Home Country United States
Rating n.a.
Main Risk Mitigation Products IFC Partial Credit Guarantee
IFC Single Asset Risk-Share
IFC Portfolio Risk Sharing Facility
IFC Guarantee Offshore Liquidity Facility
Attachments n.a.
Additional Links www1.ifc.org/wps/wcm/connect/CORP_EXT ... FC_External_Corporate_Site/About+IFC/
www.ifc.org/projects
www.ifc.org/ifcext/media.nsf/Content/Home
www.ifc.org/ifcext/cexwebreg.nsf/contact?openform
Entered On: 06/29/2007 at 01:06 PM
Updated On: 02/09/2012 at 04:22 PM