Enabling long-term infrastructure finance in local currency

Quarter 1 2020

GuarantCo

Who we are

3

Our owners

GuarantCo is funded by the governments of the United Kingdom, Switzerland, Australia and Sweden through the

PIDG Trust and the Netherlands, through FMO and the PIDG Trust.

4

Our credit ratings

AA- A1

AAA AAA-

5

Our fund managerCardano Development

Cardano Development, through its subsidiary GuarantCo Management Company, took over management of GuarantCo in May 2016.

Cardano Development is committed to helping frontier economies develop and prosper, by introducing innovative financial risk management products and services to make people and businesses in local economies more resilient and protected against risk.

With around €5 billion assets under management and €1.2 billion capital under management, predominantly sourced from international development finance institutions, the company supports five funds with ongoing management services and corporate governance oversight.

In addition to GuarantCo, Cardano Development has incubated and grown the following funds: Frontclear provides guarantees to

enhance inter-banking collateralised trading in frontier economies.

ILX is an emerging market credit fund to provide investors with cost-effective access to syndicated DFI-loans and support DFIs in mobilising private capital.

The Water Finance Facility mobilises large-scale private investment financing for water and sanitation services in developing countries.

BIX Capital stimulates the use of impact certificates for essential household products in developing countries.

TCX contributes to reducing currency risks by hedging these risks in frontier markets.

6

Where GuarantCo fits in the Private Infrastructure Development Group

OperationConstructionEarly stage development

Technical assistance

Technical Assistance grants support PIDG companies at any stage of the project lifecycle.

DevCo helps fund PPP advisory services to governments, delivered through the World Bank Group’s IFC.

Concept

Technical Assistance

DevCo

The Emerging Africa Infrastructure Fund (EAIF)

GuarantCo

Project preparation

InfraCo Africa and InfraCo Asia originate, develop, structure, invest and manage projects. They can make equity investments in innovative and pioneering projects, or to remedy the absence of capital.

Debt, guarantees and mezzanine

EAIF provides long-term foreign currency loans in sub-Saharan Africa.

GuarantCo provides local currency guarantees to banks and bond investors to develop capital markets.

Financial close Commercial operation

Able to hold equity stakes during construction and operationInfraCo Africa

InfraCo Asia

7

Our vision

To become a centre of excellence for local currency credit solutions for infrastructure finance in lower income countries thereby assisting with the alleviation of poverty.

8

Our mission

To become a market-based, recognised provider of contingent credit solutions aimed at enhancing the availability and role of local currency finance for infrastructure projects and developing local capital markets.

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Our philosophy

Build capacity Develop partnerships Deliver impact

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Significant developmental impact on people’s lives

55transactions in22 countries

235thousand jobs created

43million people with improved access to infrastructure

5.6USD billion investments enabled

Since we were established in

2005, GuarantCo has made a

significant impact on the lives

of people through the

transactions for which we have

provided local currency credit

solutions.

PIDG 2019* 49 financially closed and 6 recourse agreements

*

In 2019 PIDG harmonised the basis for calculating metrics across the group. For GuarantCo this meant recognising impact from financial close rather than recourse agreement. Cumulative totals have been restated to reflect this change.

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Our mandate

The guarantee size available from GuarantCo for a single transaction is between USD 5 million - USD 50 million equivalent in local currency. The maximum tenor is 15 years.

GuarantCo can provide a variety of contingent products as may be required for a particular project including:

• Partial credit guarantees• Partial risk guarantees• First loss guarantees• Tenor extension• Liquidity guarantees• Joint guarantees• EPC contractor guarantees• Counter guarantees

Mobilise private sector funding into infrastructure in Africa and Asia

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We use blended finance

Public sector investorsEquity including leverage facilities

( Owners / FMO )

Guarantee capacity enabled by leverage

of 3x capital

Current guarantee capacity of USD 1.2

billion

$30MILLION

$367MILLION $1.2

BILLION

GuarantCo has closed 49 guarantees totalling USD 1.1 billion, which has mobilised USD 4.7 billion of private sector investment to date

We can leverage our capital up to 3 times and as older guarantees mature we can write new guarantees, so our impact per public sector investment will continue to grow over time

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We have established a track record of innovation and growth

1st Leverage facility applied

increases guarantee

capacity to USD 146m

1st one PIDG project GuarantCo,

EAIF and InfraCo Africa combine

on Kalangala project in Uganda

Provides 1st co-guarantee

with US AID in Uganda

Provides 1st guarantee

for Standard Chartered Bank

Change in Fund Manager

to GMC Limited,

part of Cardano

Development

1st Leverage facility cancelled

beneficiaries rely solely on

GuarantCo’s standalone

credit ratings

Strategic

partnership signed

with LSE to support

developing markets’

local currency bond

issuance

1st transaction

of InfraCredit Nigeria as

operations commence

1st guarantees

of synthetic local

currency green bond

in IndiaAAARATED

2005 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

A1RATED

AA-RATED

AAARATED

Fitch Ratings

Moody’s

BloomfieldWest Africa

PACRAPakistan

1st Local currency

corporate bond

in Nigeria

1st local currency

project financing

in Cameroon

1st local currency

Corporate bond in

Vietnam and Ghana

1st Local currency

securitisation

in India

1st Local currencybond issue by Celtel Kenya

1st Local currency

bond in Sri Lanka &

sukuk in Pakistan

1st Local currency

project financing

in Nepal

Nairobi

office opens

Singapore

office opensGuarantCo incorporated as a Mauritian company and tender launched for a new

fund manager

Total run-rate portfolio size (USD)

Co guarantee platform

MoU signed with African

Development Bank

1st LSE bond listings

for Quantum Terminal

and Sindicatum

2019

1st dual-currency

guarantee in

Bangladesh

1st guarantee

in Jordan

2020

1st NSE and LSE

green Kenyan

bond listing for

Acorn

1st co-financing

with Asian

Development

Bank

14

Global partnershipsWith leading lenders, investors and project developers

Lenders / investors Sponsors / issuers / borrowers Strategic partners

15

London Stock Exchange partnership

GuarantCo signed an agreement with the LSE in presence of the UK Secretary of State for DFID, Priti Patel on 31st March 2017.

“This collaboration with GuarantCo is part of the

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.”

Nikhil Rathi,CEO London Stock Exchange plc.

Listed three bonds: Quantum Terminals Group (Nov 2018), Sindicatum Renewable Energy (Nov 2018) and Acorn Holdings (Jan 2020).

How guarantees work

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How our guarantees work

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Criteria Description

Guarantee size USD 5-50 million in local currency equivalent.

Currency Local currency focus.

Hard currency guarantees possible in fragile and conflict affected areas.

Tenor Up to 15 years.

Guarantee types Partial credit guarantees.Partial risk guarantees.First loss guarantees.Tenor extension.Liquidity guarantees.Joint guarantees.EPC contractor guarantees.Counter guarantees.

Beneficiaries Private sector infrastructure debt providers – project finance, corporate debt, mezz debt, bonds etc.

Clients Borrowers must be private sector entities although in certain cases also municipalities / sub-nationals and parastatals can be supported.

Security Typically pari passu security required alongside all other senior debtors.

Other key terms Limit on guaranteeing up to 50 percent of the long-term debt position of a company’s balance sheet.

Upfront fee, guarantee fees, monitoring fees.

English law.

Environmental and social standards

IFC Performance Standards.

Investment policyKey guarantee terms

Portfolio overview

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Current portfolio Q1 2020By countryCountry %

Bangladesh 7.7%

Cameroon 1.8%

Gabon 2.9%

Ghana 9.8%

India 22.0%

Jordan 5.1%

Kenya 2.5%

Madagascar 1.1%

Mali 0.8%

Nepal 2.8%

Nigeria 9.2%

Pakistan 7.7%

Philippines 2.5%

South Africa 0.2%

Thailand 1.4%

Togo 3.2%

Uganda 0.3%

Vietnam 9.3%

Multi-country 9.7%

1COUNTRIES8

Countries with active projects*

Countries eligible for funding

As per Q1 2020 data

*Plus two multi-country projects

Power / energy supply TransportationDigital communications

infrastructureGas transportation,

distribution and storageOil transportation,

distribution and storage Social infrastructureAgriculture-supporting

infrastructureManufacturing related

to infrastructure Multi-sector

Bangladesh

Cameroon

Gabon

Ghana

India

Jordan

Kenya

Madagascar

Mali

Nepal

Nigeria

Pakistan

Philippines

South Africa

Thailand

Togo

Uganda

Vietnam

Multi Country Total

Total (USD m) $317.8 $78.0 $50.0 $16.2 $12.5 $108.0 $15.0 $47.9 $182.2 $827.6

Total current exposure (%) 38.4% 9.4% 6.0% 2.0% 1.6% 13.0% 1.8% 5.8% 22.0% 100%

Current portfolioBy sector

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AcornKenya

Developing capital markets

GuarantCo provided investors with a partial credit guarantee to cover 50 percent of principal and interest due under the KES 5 billion programme.

Addressing student housing shortage

Creating clean, safe and affordable accommodation for 5,000 students in Nairobi.

Contributing to reducing carbon emissions

The note programme is the first to achieve green certification in Kenya and meets the Climate Bond Standard of the Climate Bonds Initiative.

Partnering with other PIDG companies

EAIF supported the fundraise with a KES 1.3 billion participation whilst PIDG Technical Assistance providing a part returnable grant to contribute towards the costs of the loan note issue.

Impact

Construction of up to six green-certified student properties in Nairobi.

The properties will provide high quality and affordable student housing for circa 5,000 students a year.

Issued by Acorn, the first purpose-built student accommodation provider in Kenya.

Rated B1 by Moody’s, one notch higher than Kenya’s sovereign rating of B2 (for the first time).

The first project bond in East Africa

The first deferred drawdown structure

The first green bond in East Africa

KES 2.5bnguarantee

Urban infrastructureFinance

23

Classic FashionJordan

Demonstration effect

Demonstrating to commercial lenders how viable businesses can be supported in similar territories to provide employment opportunities for vulnerable populations, empower women and drive local, inclusive economic growth.

Employing vulnerable populations

Training and employment of around 1,000 Syrian refugees as well as Jordanian youth and migrant workers living in Jordan, over the next four years. PIDG Technical Assistance of USD 305,000 used to improve training and support for refugee workers.

Supporting inclusion of refugees

Supporting the Jordanian government initiative to integrate Syrian refugees into Jordanian society.

Impact

Financing the construction of a textile processing mill, a centralised cutting station, a laundry unit and a carton and polybag factory.

Provided a USD 42.5 million, on-demand guarantee with a 5-year tenor supporting Jordan’s largest garment manufacturer.

USD 42.5mFull guarantee

Finance Social Infrastructure

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Ho Chi Minh Infrastructure InvestmentVietnam

Issuance of a bond

Bond investors are unaccustomed and therefore unable to accept project construction and operational risk.

Improved connectivity & safety for millions

Cutting journey times from Ho Chi Minh City to Can Tho, improving drivers’ safety whilst around 4 million people will benefit from the new expressway.

Economic growth

Improving access to markets for agriculture, fisheries, garment and manufacturing and tourism.

Supporting government strategy

Attracting private capital to allow the Government of Vietnam realise its national development strategy.

Impact

The local currency bond supports the construction of a four-lane expressway in the Mekong Delta.

GuarantCo provides VND 1.150 billion (circa USD 50 million) guarantee with a 10-year tenor to Ho Chi Minh Infrastructure Investment JSC .

PIDG Technical Assistance is providing post transaction support through funding of USD 75k used for the development of an Environmental, Social, Health and Safety Management System.

VND 1.150bguarantee

Finance Transport

25

InfraCreditNigeria

USD 1.1bn

Guarantee capacity

USD 365mEquity

USD 25mCallable capital

USD 50mEquity

USD 680 mn

Guarantee capacity

x5

x3

Moody’s andFitch Ratings

Agusto & Co and GCR

Leverage

Leverage

Public sector investors

Public sector invests USD 8.3 million in GuarantCo which is leveraged 3x to provide USD 25 million guarantee to an InfraCredit.

This USD 25 million guarantee will be leveraged 27x to help InfraCredit mobilise up to USD 680 million of guarantee capacity in local currency and therefore leverages the original investment made by the public sector up to 81x.

$30mLeverage facility

$61mLeverage facility

Note: Capital numbers as at December 2019

26

Kacific Broadband SatellitesAsia and the Pacific islands region

Mobilising long tenor private sector debtThe guarantee allowed an institutional investor to provide a long tenor project finance loan of USD 60 million to a satellite deal in a niche region, which contributed to Kacific’s total investment of USD 222.8 million.

Encouraging economic growthProviding affordable, high-speed broadband to customers from underserved and unserved pockets of demand in 17 countries across Asia and the Pacific islands.

Connecting remote country communities Overcoming the geographical barriers that terrestrial solutions are unable to address.

Increasing affordable broadband accessReducing end-user price through a low-cost base and long tenor debt financing package.

Impact

GuarantCo’s first satellite financing transaction.

Allows Kacific to build, own and operate its first Ka-band, high throughput satellite.

The satellite was launched by SpaceX in December 2019 and started operations in March 2020.

Guarantee of European institutional investor alongside Asian Development Bank (ADB) to co-finance Kacific Broadband Satellites.

First-ever co-financing of an infrastructure project by ADB and GuarantCo in the region.

Facilitated the project financing of a satellite transaction in the Pacific islands region.

USD 50mPartial credit guarantee

Digital Communication infrastructure

Finance

27

K-ElectricPakistan

Access to dollarised marketsProviding K-Electric with access to raw materials from dollarised markets through the two tranches.

Reducing power theftPIDG Technical Assistance funding of USD 185,000 allows a wider audience to be educated about the safety threats of electricity theft.

Affordable electricityImproving the affordability of the service for end users through access to cheaper funding than it would be typically using in the derivative market.

Empowering womenWorking to break gender stereotypes by increasing female representation in higher paid, more skilled roles.

Impact

Financing capital expenditure projects including Aerial Bundled Cables (ABC) roll-out, smart grid solutions and other distribution network maintenance initiatives.

Partial credit guarantee made up of two equal tranches: USD and PKR.

USD 50mDual currency guarantee backed loan

Finance Energy

28

SindicatumIndia and the Philippines

Developing capital markets

The guarantee facilitated issuance of first-ever 7 year tranche and a 10-year PhP tranche, a first for INR and PhP offshore bonds respectively and was recently listed on the London Stock Exchange.

Green standards

Bond issued in accordance with:• Green bond principles.• ASEAN Green bond standards.

Promoting rating from Moody’s A1

Full credit substitution by GuarantCo.

Promoting financial resilience

Providing local currency finance to reduce currency exchange risk.

Impact

Refinancing for operating solar power plants in India.Construction of new solar and wind power plants in Philippines.

Refinancing of existing debt in INR.Construction finance in PhP.

100 percent guarantee denominated in INR and PhP but settled in USD.

Synthetic local currency bond Issued by Sindicatum, a developer / owner / operator of renewable power plants in South and Southeast Asia (176MW in portfolio as of Nov 2017).

USD 60mGreen bond

EnergyFinance

29

Technaf SolartechBangladesh

Boosting power supply

Improve the electricity access for circa 136,000 people.

Unlock new private investment

Cleaning fuel to power local hospitals, businesses, street lighting, etc.

Job creation

Enabling the provision of up to 350 direct and indirect jobs.

Developing capital markets and promoting financial resilience

Providing long-term finance, a requirement for the financial viability of the project.

Impact

Construction of a 28MWDC solar power plant, the first utility-scale solar power plant in Bangladesh.

90% Partial Credit Guarantee, andTenor Extension for a new project loan making this first long-term (15 years) bank financing for a project in Bangladesh.

USD 15mLoan in Taka and USD

InfrastructureFinance

Working together within PIDG

31

Gabon Special Economic ZoneCargo port

• Project due diligence

• EAIF introduction through GuarantCo’s GSEZ USD 57 million transaction closed in Dec 2018

• Experience and knowledge share.

40MILLION

EURO

• Proposal for equity restructure of Kita

• Coordinated KYC process and findings

• Ongoing joint note to PIDG by EAIF and GuarantCo.

Kita solar projectElectricity generation and supply

Albatros EnergyElectricity generation and supply

• Non-Payment by the offtaker

• BWSC bribery allegations

• Coordinated efforts and knowledge share.

Quantum TerminalsLPG storage

• Proposal for additional investment into bottling facility

• Coordinated due diligence process

• Ongoing joint discussions on borrower developments.

5MILLION

EURO45

MILLION

10MILLION

USD

GHS

MaliFeb 2018

GhanaMar 2018

GabonAug 2019

MaliMar 2017

PIDG companiesHow we work together

32

Disability Empowerment

Cameroon, Cote d’IvoireJul 2019, Feb 2020

BangladeshApr 2019

PakistanJul 2019

Capital Market Development A study of the Bangladesh bond market

• Results of the study disseminated at conference, co-hosted with the Dhaka Chamber of Commerce and Industries in Dhaka, attended by 300 delegates.

• Workshop to raise awareness of various approaches, use of credit enhancement instruments and local currency infrastructure financing credit solutions

• Three day workshops attended by 50 local banks and financial institutions.

• Through GuarantCo client Jazz, digital telecoms company

• Launch of online digital platform to help people with hearing disabilities.

PIDG companiesHow we work together

Capability Building Workshops

33

PIDG companiesHow we work together

45MILLION

USD

UgandaDec 2011

• Structuring and executing the finance

• Risk mitigation and financial closure

• First time joint guarantee with USAID.

Kalangala Infrastructure ServicesIntegrated infrastructure development and improvement. Ferry services, road development, and water and power supply.

Why work with us?

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Why partner with GuarantCo?

Borrower/issuer

Positive signaling.

Access new pools of capital (e.g. local currency loans and bond markets).

Enhance overall return on investments.

Suppliers(EPC, equipment etc.)

Offer more flexible terms.

Opportunity to accelerate mobilising of projects whilst capitalis being finalised.

Risk mitigating counterparty risk in event financing is extended.

Financier

Risk transfer (instead of risk mitigation) counterparty risk to AA- / A1 entity.

Efficient capital treatment for long dated transactions.

Build capacity in sustainable long-term finance using myriad types of financing solutions.

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2

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GuarantCo’s funding

*As per Q1 2020 exchange rates

Callable capital

GBP 40million

(USD 50 million*)

Share capital

USD 317million

GBP 90million

Committed funding

USD 6.25million

SECO funding from a total ofUSD 15 million committed.

(4.75 million disbursed in 2017)

DFID future callable capital.(Fully disbursed by 2020)

GuarantCo has a track record of periodic equity injections

provided by its owners.

GuarantCo is part of PIDG, with over USD 2.4 billion

of total funding.

(As at 31st December 2017. Includes owner funding and

other funding sources)

GuarantCo has no debt on its balance sheet.

Leverage multiple:

The Board allows for leverage up to 3 times equity plus

FMO standby facility (USD 30 million) and callable capital.

Moody’s and Fitch are both comfortable with the

GuarantCo Board’s leverage definition and threshold.

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Guarantee transaction process

Origination Conduct preliminary assessment of deal including

initial KYC check

Obtain new business approval

Complete mandate letter/term sheet

Commence due diligence process including

complete KYC

Financial close

Conditions precedent closure

Recourse agreement/contract

Negotiate documentation

Credit committee approval

THANK YOU