GuarantCo, part of the Private Infrastructure Development Group (PIDG), has closed its first syndication transaction via the credit insurance market with leading Lloyd’s (re)insurer Canopius, which was arranged by specialist CPRI broker BPL Global.
The transaction involved the use of a non-payment insurance policy covering exposure on a GuarantCo portfolio transaction.
The transaction is a significant first for GuarantCo and the Private Infrastructure Development Group as the transaction mobilises a new form of private sector support for its projects. The credit insurance market represents a significant and growing source of capacity with which GuarantCo can share the credit risks associated with growing its portfolio. In turn, relieving the potential cost of these risks from GuarantCo’s balance sheet, via its credit insurance policy with Canopius, will provide unleveraged capacity to grow GuarantCo’s portfolio and support the company’s pursuit of its strategic and developmental impact objectives. As a result of the syndication, GuarantCo will be able to guarantee larger transactions whilst managing its single sector, geography and obligor limits, and make a further contribution to bridging the infrastructure financing gap in lower income countries across Africa and Asia.
This pathfinder transaction clearly demonstrates to the insurance market the viability of supporting GuarantCo’s impact driven transactions and is a major stepping stone towards a deeper relationship with the insurance sector, which we hope will ultimately help to address the major infrastructure financing needs in Africa and Asia.
Layth Al-Falaki, CEO at GuarantCo, said: