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

Product Name Senior Loans
Link to Product Website
Provider Name EAIF (Emerging Africa Infrastructure Fund)
Product Definition Emerging Africa Infrastructure Fund (EAIF) Objectives:


EAIF intends to make a real and lasting impact on the development of sub-Saharan Africa’s infrastructure to facilitate economic growth and so, both directly and indirectly over time, contribute to the alleviation of poverty in the region. More specifically, the Fund has the following objectives:

1) To address the scarcity of long term debt for significant private sector-based infrastructure development through the provision of long term debt finance that can be tailored to suit the typically longer term nature of cash flow profiles arising in infrastructure.

2) To be responsive to market needs by working with all participants (host governments, private sector sponsors and non-governmental organisations alike) to create appropriate financing solutions to meet the challenges of private sector financing in the region, including where possible and appropriate the facilitation of local capital market involvement.

3) To ensure as far as possible that all activity receiving support from the Fund conforms to internationally acceptable environmental and social impact standards.

4) To operate on private sector commercial principles and so demonstrate the viability of long-term commercial lending into sub-Saharan Africa.

5) To increase the size of EAIF and its effectiveness through the additional leverage of further donor money to attract new private sector capital that would otherwise be unlikely to be made available to the region.

Products offered by EAIF:

EAIF offers a range of debt financing products in the form of loans or guarantee instruments, but principally senior debt. This section sets out the specific products offered.

Senior Debt Products:

US$ and EUR Loans: Senior loans up to a maximum amount of US$36 million (or equivalent) may be provided on a stand alone basis or with one or more co-lenders, either through a predetermined “club” or in a “syndicated” transaction structured and negotiated by one or more lead arranger(s). EAIF will consider both a lead role in such transactions or joining a club/syndicate arranged by other acceptable institutions.

Local Currency Senior Loans: On an exceptional basis, EAIF may offer local currency senior loans to investee companies provided that the foreign exchange exposure can be suitably hedged or otherwise covered.

Mezzanine / Equity related Products: EAIF may offer subordinated loans or mezzanine finance to borrowers where such financing is required and provided that they can show sufficient robustness and stability of cashflow to support investment in such higher risk instruments. The term of such instruments will reflect the relevant risk profile.

Other Products: EAIF may also offer bridge financing on customary terms and on the basis that such financing will be converted into a term loan consistent with EAIF's Investment Policy.

Further underwriting facilities may be offered, provided that, where the extent of such underwriting exceeds EAIF's credit limits, there is a clear ability to sell-down the excess.

Product Type Co-financing
Defined Risks Covered n.a.
Eligible Form of Investments n.a.
Eligible Currency of Underlying Investment Covered by this Product Both local and foreign currency
Eligible Countries & Regions n.a.
More on Eligible Countries
Eligible Applicants n.a. More on Eligible Applicants
Eligible Sector No Specific Sector
Maximum Tenor 10+ to 15 years
More on Maximum Tenor
Max. Absolute Amount (USD) 0 to 50 MM
More on Maximum Absolute Amount
Max. % of Project Costs Covered Max./under 25%
Max. % of Export Content Covered Max./under 50%
Fees Market-based
Fees are set at a commercial rate to reflect the risk taken and are decided on a project-by-project basis.
More on Fees
Other Conditions Sovereign Counterguarantee: No
Anti-Corruption and Governance Standards: Yes
Environmental standards: Yes
Social standards (incl. Human Rights Standards; Labor Rights Standards): Yes
Others:
Source(s) n.a.
For more information, contact Nick Rouse
Email: nick.rouse@frontiermarketsfm.com
Phone: +44 20-3 145 8600

Orli Arav
Email: orli.arav@frontiermarketsfm.com
Phone: +44 20-3 145 8610
Attachments n.a.
Additional Links www.emergingafricafund.com/policy-and-procedures/eaifs-procedures.aspx
www.emergingafricafund.com/news/indor ... ertilizer-and-chemicals-limited-.aspx
www.emergingafricafund.com/about-us/presentations.aspx
www.emergingafricafund.com/about-us/fund-structure.aspx
www.emergingafricafund.com/policy-and-procedures/investment-policy.aspx
Deals As at Sep 2012, EAIF has invested over USD 750 million into 41 projects. Some of the companies in which EAIF has invested have been more successful than expected (particularly in the telecoms sector) and have been able to prepay early. This leaves EAIF with a current committed amount of US$435 million.

Expected deals to date cover several sectors ranging from Telecoms to Power and Transport to greenfield Cement Production.

Provider Name EAIF (Emerging Africa Infrastructure Fund)
Institution Type PUBLIC: Multilateral Development Bank
Ownership http://www.emergingafricafund.com/about-us/fund-structure.aspx
Head Office Frontier Markets Fund Managers c/o Standard Bank Plc 20 Gresham Street London EC2V 7JE
Provider Home Country United Kingdom
Rating n.a.
Main Risk Mitigation Products n.a.
Attachments n.a.
Additional Links www.emergingafricafund.com/useful-links.aspx
Entered On: 03/14/2008 at 12:11 PM
Updated On: 05/21/2013 at 09:04 AM