GuarantCo provides guarantees to lenders to support local currency finance for infrastructure projects in low-income countries, promoting domestic infrastructure financing and capital market development.
GuarantCo offers partial guarantees which serve as credit enhancements to facilitate local debt instruments. Guarantees for single transactions currently range from the local currency equivalent of US$5 million to US$30 million, although the upper limit is expected to rise over the next two years to US$50m.GuarantCo's two key objectives are to encourage domestic financing of infrastructure services and to promote local capital market development.
Well functioning capital markets are vital to facilitate private sector investment, and to deliver necessary infrastructure projects that improve service coverage and quality. Capacity building in local markets will enable projects to eventually be refinanced with reduced support from GuarantCo.