Understanding the different Bank Group Guarantee Instruments

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Understanding the different Bank Group Guarantee
Instruments
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Bank Group Guarantees Framework

• IFC
• Partial Credit Guarantees
• Hedges for clients (interest rate, currency and
  commodity swaps)

CommercialRisk
Investors/ financialinstitutions
All Risks
Non- Commercial Risk

• IBRD
• Partial Risk Guarantees
• Partial Credit Guarantees
• Policy Based Guarantees
• IDA
• Partial Risk Guarantees

• MIGA
• Transfer restriction and currency
  inconvertibility
• Expropriation
• War and civil disturbance
• Breach of contract

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Comparison of World Bank Group Risk Mitigation
Instruments
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Guiding principles on deployment of instruments

• PRGs can be considered in the following
  situations
• Sectors in early stages of reform
• Larger size/riskier operations
• Operations highly dependent on support/undertaking
  s of governments
• Clout of the Bank needed
• Joint transactions
• Coordination

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World Bank Group Collaboration on Recent Large
Infrastructure Transactions
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Case Study The West Africa Gas Pipeline Project
(WAGP)Key Features

• Pipeline system (678km) that will transport
  natural gas from Nigeria to Ghana, Togo and Benin
• Total project cost 590m
• Guarantees
• IDA guarantee for Republic of Ghana 50m
• MIGA guarantee for WAPco 75m
• Zurich guarantee for WAPco 125m (reinsured by
  OPIC)
• IDA Guarantee terms
• Amount US 50 million
• Term 22 years
• Coverage Government of Ghanas default for
  offtake arrangements

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Case Study The West Africa Gas Pipeline Project
(WAGP)Project Structure
NNPC Nigerian National Petroleum
CorporationCNL Chevron Nigeria LtdSPDC
Shell Nigeria NCG wholly owned sub of
NNPCWAPCo newly formed entity owned by
ChevronTexaco WAGP (38.2), NNPC (26),
Shell (18.8), Govt of Ghana (17)
NNPC/SPDC/Agip/Elf Joint Venture
NNPC/CNL Joint Venture
NIGERIAN GAS COMPANY (NGC)
WEST AFRICAN PIPELINECOMPANY (WAPco)
Natural Gas Flow
Transporters
Volta River Authority
Communauté Electrique du Benin
Offtakers
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Thank you