MICROCAPITAL BRIEF: GuarantCo to Re-guarantee up to $74m in Infrastructure-related Transactions by African Guarantee Fund for Small and Medium-sized Enterprises (SMEs)

The Kenya-based African Guarantee Fund for Small and Medium-sized Enterprises (AGF) recently accepted a re-guarantee facility of USD 74 million from GuarantCo, a member of the UK-based Private Infrastructure Development Group (PIDG) that reduces risk for lenders to infrastructure projects in low-income countries. AGF will use the facility to support lenders in disbursing “larger local-currency transactions for SMEs [small and medium-sized enterprises] involved in infrastructure” projects such transportation improvements and utility construction.

AGF was founded in 2012 by the African Development Bank; the Nordic Development Fund, the development finance institution of five Nordic countries; and the international development agencies of Denmark, France and Spain. Since 2012, it has issued guarantees totaling USD 690 million in support of USD 729 million in lending to 7,600 SMEs in Africa.

GuarantCo, which is based in the UK, provides local-currency guarantees supporting infrastructure in developing countries worldwide. It has issued guarantees totaling USD 900 million since it was founded in 2005. PIDG’s members are the World Bank Group’s International Finance Corporation, the Australian government’s Department of Foreign Affairs and Trade, and the institutions controlled by six European countries. It has participated in projects valued at a total of USD 31 billion since 2002.

Sources and additional resources

GuarantCo press release
http://guarantco.com/media-centre/guarantco-and-agf-sign-deal

Private Infrastructure Development Group
http://www.pidg.org/

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