GuarantCo, part of the Private Infrastructure Development Group (PIDG), has provided a portfolio guarantee of JOD 24.8 million (c. USD 35 million) to Capital Bank of Jordan, for a portfolio of JOD 88.6 million (c. USD 125 million), as the first bank in the country to close such a transaction. It will enable the bank to grow its infrastructure portfolio which is aligned with the PIDG 2023 – 2030 strategy focused on climate adaptation and mitigation transactions.
The announcement happened on the sidelines of the visit of the Jordanian Minister of Investment Ms. Kholoud Saqqaf to the UK to promote Jordan as an investment destination. It was made at the Embassy of Jordan in the UK in the presence of the minister of investment and the Jordanian ambassador to the UK Mr. Manar Dabbas.
With a growing climate infrastructure financing gap, Jordan’s Nationally Determined Contribution (NDC), a climate action plan to cut emissions and adapt to climate impact, is now aiming to reduce emissions by 31 percent compared to a business as usual scenario, which is an increase from 14 percent set out in its initial NDC. While the Government of Jordan is expected to invest 5 percent of the financing requirement for these goals, 95 percent is expected to be mobilised through the private sector.
Through the portfolio guarantee, GuarantCo’s transaction enables Capital Bank of Jordan to continue providing infrastructure finance to further invest in Paris aligned, sustainable infrastructure. GuarantCo hopes that the demonstration effect of the transaction can catalyse similar guarantees across the region to enable continued financing of climate adaptation and mitigation infrastructure finance.
The transaction will make a direct contribution to SDG 9.1: Develop quality, reliable, sustainable and resilient infrastructure to support economic development and human well-being and 8.5: Achieve full and productive employment and decent work for all women and men.
Ms. Kholoud Saqqaf, Jordanian Minister of Investment, said:
“Today’s partnership announcement between GuarantCo and Capital Bank of Jordan is a testament to Jordan’s commitment to fostering sustainable infrastructure development and attracting vital investments. As we work to promote Jordan as an attractive investment destination on the global stage, this collaboration aligns perfectly with Jordan’s ten-year economic modernisation vision and Jordan’s Nationally determined contribution. By mobilising private sector investment in climate-aligned projects, we are not only advancing our economic goals but also contributing to the global effort to combat climate change. This transaction exemplifies the power of strategic partnerships in driving positive change and unlocking opportunities for sustainable growth.”
Layth Al-Falaki, Chief Executive Officer of GuarantCo, said:
“We are delighted to close our first transaction with Capital Bank of Jordan and our second transaction in the country. This transaction is fully aligned with our climate adaptation and mitigation ambitions as outlined in the recently launched PIDG 2023 – 2030 strategy. The increase in infrastructure project financing unlocked from this portfolio guarantee, combined with volumes from potential similar guarantees replicating this transaction in the region, will lead to a much needed infrastructure improvement to the benefit of local people.”
Jamal AlQudah, Group Financial Institutions Director at Capital Bank of Jordan, said:
“With this partnership and the portfolio guarantee from GuarantCo, we are taking a significant step toward enhancing the infrastructure landscape in Jordan. This will also contribute to fulfilling our commitment to sustainable and climate-resilient infrastructure, aligned with the aspirations of our nation. We look forward to expanding this model to other regions where we operate, furthering the positive impact on communities and economies.”
About GuarantCo
GuarantCo mobilises private sector local currency investment for infrastructure projects and supports the development of financial markets in lower income countries across Africa and Asia. GuarantCo is part of the Private Infrastructure Development Group (PIDG) and is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. Since 2005, GuarantCo has enabling USD 6.2 billion of total investment and USD 5.2 billion of private sector investment, giving 45.2 million people improved access to infrastructure and creating around 229,000 jobs. GuarantCo’s activities are managed by GuarantCo Management Company which is part of Cardano Development www.guarantco.com
About PIDG
The Private Infrastructure Development Group (PIDG) is an innovative infrastructure project developer and investor which mobilises private investment in sustainable and inclusive infrastructure in sub-Saharan Africa and south and south-east Asia. PIDG investments promote socio-economic development within a just transition to net zero emissions, combat poverty and contribute to the Sustainable Development Goals (SDGs). PIDG delivers its ambition in line with its values of pioneering, partnership, safety, inclusivity and urgency.
PIDG offers Technical Assistance for upstream, early-stage activities and concessional capital; its project development arm – which includes InfraCo Africa and InfraCo Asia – invests in early-stage project development and project and corporate equity. PIDG credit solutions include EAIF (the Emerging Africa Infrastructure Fund), one of the first and more successful blended debt fund in low-income markets; GuarantCo, its guarantee arm that provides credit enhancement and local currency solutions to de-risk projects; and a growing portfolio of local credit enhancement facilities, which unlocks domestic institutional capital for infrastructure financing.
Since 2002, PIDG has supported 211 infrastructure projects to financial close, which provided an estimated 222 million people with access to new or improved infrastructure. PIDG is funded by the governments of the United Kingdom, the Netherlands, Switzerland, Australia, Sweden, Germany and the IFC. www.pidg.org
About Capital Bank Group
Capital Bank Group is considered one of the top financial institutions operating in the Jordanian and regional markets, with assets of approximately JOD 7.6 billion, while the total equity is nearly JOD 728 million.
Capital Bank Group includes Capital Bank, which since its inception in 1995, has grown to become one of the top financial institutions in Jordan, offering the Jordanian market a comprehensive set of commercial and investment banking services and solutions tailored to the needs of retail and corporate clients alike.
In 2005, Capital Bank (Jordan) purchased majority shares of the National Bank of Iraq (61.85%), which enabled NBI to develop its products and services, strengthen its foothold and enhance financial inclusion at the country level, support export activities and provide all services to Jordanian companies operating In Iraq. In 2021, the National Bank of Iraq continued to realize its expansion strategy by launching its first branch in the Kingdom of Saudi Arabia to provide financial and trade services to its corporate clients.
As for Capital Investments, it is a wholly owned subsidiary of Capital Bank established in 2006 and is set as a regional leader in providing comprehensive investment banking services that include asset management, brokerage as well as corporate financial advisory. The company serves a diverse array of local, regional, and international clientele, including major corporations, government entities, and high-net-worth individuals through its offices in Jordan and the United Arab Emirates / Dubai International Financial Center (DIFC).
Further building on its ambitious expansion strategy, Capital Bank Group also acquired Bank Audi’s operations in both Jordan and Iraq in 2021 and followed that milestone in 2022 with the acquisition of the branches and operations of Société Générale Bank in Jordan, strengthening its competitive position in the Jordanian banking market. In early 2022, Capital Bank launched its digital bank – Blink, to re-imagine the way people conduct their banking operations, targeting young individuals.
In June 2022, Capital Bank raised its capital through issuing new shares in favor of the Public Investment Fund (PIF) – one the largest sovereign funds worldwide – as a strategic investor in Capital Bank. with a 23.97% stake, a milestone which will enable the Group to implement its expansion strategy and introduce new products and services to meet the needs of its clients and benefit its shareholders www.capitalbank.jo
