London, March 31 2017
GuarantCo has signed a Memorandum of Understanding (MoU) today at London Stock Exchange, the signing was witnessed by the UK Secretary of State for International Development Priti Patel.
GuarantCo will partner with London Stock Exchange to help global investors gain access to local currency debt opportunities in frontier and emerging markets. The demand for capital from the private sector is growing in frontier and emerging markets driven by high rates of economic development. Both GuarantCo and London Stock Exchange are committed to supporting the growth of domestic capital markets through cooperation on capacity-building and by enabling dual-listings of local currency bonds on the London Stock Exchange’s markets, as a means of introducing offshore investors, and thereby greater liquidity, into frontier and emerging markets.
GuarantCo Chairman Andy Bainbridge said: "I am delighted that GuarantCo's expertise in providing credit enhancement to emerging and frontier market issuers raising local currency debt and London Stock Exchange's expertise in providing issuers access to debt markets, trading platforms and global investors is being combined through this partnership to help bring together debt issuers from frontier and emerging markets and investors that are seeking to access debt opportunities in those markets."
The relationship will help unlock new sources of capital to support infrastructure finance in emerging and frontier markets in poorest areas of Sub-Saharan Africa and South and South-East Asia.
"This collaboration with GuarantCo is part of London Stock Exchange's commitment to fostering the development of emerging and frontier capital markets. Efficient capital markets are key to raising finance for companies from these economies and it’s our hope that this partnership will encourage and facilitate further development local currency debt markets, building on our experience as the global leader for international RMB and Indian rupee bond markets" said Nikhil Rathi, CEO London Stock Exchange plc.
The MoU signing took place along-side the launch of London Stock Exchange Group’s inaugural ‘Companies to Inspire Africa’ report. The report features a range of African businesses in the private sector, spanning 42 countries and 7 sectors.
To read London Stock Exchange Group’s press release, please visit http://www.lseg.com/mediacentre/press-releases
For more information about the report, please visit lseg.com/inspireafrica
GuarantCo is part-of the Private Infrastructure Development Group (PIDG), and provides local currency solutions to local or regional financial institutions and bond investors, to help infrastructure projects raise debt finance.
Primarily, this is through guarantees denominated in local currency, although GuarantCo can provide dollar-denominated guarantees in fragile and conflict-affected states and provided the business case supports such financing
GuarantCo is one-of-a-kind – the only local currency guarantee facility in the world targeting infrastructure in frontier markets.
GuarantCo is funded by the UK (DFID), Switzerland (SECO), Sweden (Sida), the Netherlands (DGIS through FMO) and Australia (DFAT).
The Private Infrastructure Development Group (PIDG) encourages and mobilises private investment in infrastructure in the frontier markets of sub-Saharan Africa, south and south-east Asia, to help promote economic development and combat poverty. Since 2002, PIDG has supported 133 infrastructure projects to financial close and provided 265 million people with access to new or improved infrastructure. PIDG is a multilateral organisation, funded by donors from seven countries (UK, Switzerland, Australia, Norway, Sweden, Netherlands, Germany) and the World Bank Group.
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Unique Public - Private partnership model combines equity from four European Governments, private sector management, and credit enhancement from Barclays Bank Plc and KfW
In late 2009, GuarantCo joined FMO, Deutsche Bank and Cordiant Capital in a $US65m equivalent facility in rupees for Ackruti City Limited (ACL), to rehabilitate up to 30,000 families currently living in Mumbai slums. GuarantCo’s share was just over 30%.
In September 2010 GuarantCo joined Investec, FMO and the Infrastructure Crisis Facility (ICF) in providing a ZAR 760m facility to a South African Finance Company (SAFCO) (names and other details withheld due to confidentiality reasons).