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

Product Name Loan
Link to Product Website
Provider Name PROPARCO (de Promotion et de Participation pour la Coopération Economique) - France
Product Definition PROPARCO proposes a wide range of loan (€2 to 100 M per transaction) products to its clients :

1. Senior loans
2. Junior loans
3. Mezzanine debt
4. Subordinated loans

PROPARCO offers its customers several types of loan:

1. Loans proposed directly to investors with or without bank guarantees or restricted covenants,
2. Project loans are in most cases co-financed with other bilateral or multilateral financial institutions,
3. Loans are offered to financial institutions in several different forms and are adapted to market needs and the specific requirements of the institution,
4. Framework agreements define the terms and conditions and authorise the utilisation of a loan for projects that have been pre-approved by the Company,
5. Delegated credit lines, which provide medium and long-term resources, and which may be drawn down in tranches, are adapted based on the needs of the customer.
6. Refinancing credit lines.

Loans are denominated in Euros, US dollars or South African rands and may also be issued in other currencies. They may have maturities of up to fifteen years with a capital repayment grace period when appropriate.

PROPARCO's Lending Activity:

PROPARCO’s products are complementary to those of local or international private banks. Indeed, the mission of development institutions, including PROPARCO, is to be niche players by providing financial products that are often neglected by the private sector. Their activities can consequently vary enormously from one market to another.

In addition to cofinancing or joint risk-sharing mechanisms with other European development agencies, since 2007 PROPARCO has benefitted from a sub-participation agreement with AFD which allows it to increase its lending capacity. PROPARCO can consequently provide loans ranging between €5M and €100M (the average amount is €13M) , with maturities of between five and twenty years.

In order to support a client over such a long period, PROPARCO needs to be able to adjust its lending operations which consequently include mechanisms to reduce or extend maturities depending on exogenous parameters (commodity prices, rainfall , etc.). This need for flexible tools has led PROPARCO to develop a wide range of loan products which now include senior loans, subordinated or participation loans and an increasing number of junior products.

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 All
More on Eligible Countries
Eligible Applicants All
Eligible Sector No Specific Sector
Maximum Tenor 10+ to 15 years
Max. Absolute Amount (USD) 100+ to 250 MM
Max. % of Project Costs Covered Max./under 25%
Max. % of Export Content Covered Max./under 50%
Fees Market-based

Other Conditions Sovereign Counterguarantee: No
Anti-Corruption and Governance Standards: No
Environmental standards: Yes link
Social standards (incl. Human Rights Standards; Labor Rights Standards): No
Source(s) n.a.
For more information, contact
Email: proparco@proparco.fr
Phone: + 33 1 53 44 31 08
Attachments n.a.
Additional Links n.a.
Deals n.a.

Provider Name PROPARCO (de Promotion et de Participation pour la Coopération Economique) - France
Institution Type PUBLIC: Multi-donor Initiative
Ownership Owned by Agence Française de Développement (AFD), French financial organizations, International financial organizations, French companies, and Funds and ethical foundations.
Head Office 151, rue Saint Honoré 75001 Paris
Provider Home Country France
Rating n.a.
Main Risk Mitigation Products Equity Investment
Project Support Facilities
Attachments n.a.
Additional Links
Entered On: 10/31/2008 at 02:13 PM
Updated On: 05/08/2013 at 03:54 PM