DOCSLIB.ORG

Transport Papers September 2008

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Transport Papers September 2008 46728 THE WORLD BANK GROUP WASHINGTON, D.C. TP-21 TRANSPORT PAPERS SEPTEMBER 2008 Public Disclosure Authorized Monitoring Road Works Contracts and Unit Costs for Enhanced Governance in Sub-Saharan Africa Victoria Alexeeva, Gouthami Padam and Cesar Queiroz Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized TRANSPORT SECTOR BOARD MONITORING ROAD WORKS CONTRACTS AND UNIT COSTS FOR ENHANCED GOVERNANCE IN SUB-SAHARAN AFRICA Victoria Alexeeva, Gouthami Padam and Cesar Queiroz THE WORLD BANK WASHINGTON, D.C. © 2008 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone 202-473-1000 Internet: www.worldbank.org This volume is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: [email protected]. To order additional copies of this publication, please send an e-mail to the Transport Help Desk [email protected] Transport publications are available on-line at http://www.worldbank.org/transport/ CONTENTS FOREWORD .............................................................................................................V ACKNOWLEDGEMENTS ......................................................................................... VII EXECUTIVE SUMMARY ........................................................................................... IX 1 INTRODUCTION: ADDRESSING CORRUPTION RISKS IN THE ROAD SECTOR ........ 1 2 BUILDING A NEW DATASET OF ROAD WORKS CONTRACTS OF BANK- FINANCED PROJECTS IN SUB-SAHARAN AFRICA............................................................ 3 2.1 OBJECTIVES ............................................................................................................. 3 2.2 DESCRIPTION OF DATA .............................................................................................. 3 2.3 MAIN VARIABLES....................................................................................................... 3 2.4 METHODOLOGY......................................................................................................... 6 2.5 DATA SOURCE........................................................................................................... 7 2.6 OBSERVATIONS ........................................................................................................ 7 2.7 SUGGESTIONS FOR RECORDS MANAGEMENT................................................................. 7 3 ANALYZING TRENDS AND KEY INDICATORS ....................................................... 9 3.1 STATISTICAL TRENDS ................................................................................................ 9 3.2 REHABILITATION & RECONSTRUCTION (2007 US$/KM) .................................................16 3.3 EXAMINATION OF ‘RED FLAGS’....................................................................................24 3.4 COMPARATIVE ANALYSIS...........................................................................................27 3.5 COSTS ANALYSIS .....................................................................................................32 4 EXPLAINING WHAT DRIVES ROAD CONSTRUCTION COSTS: ISSUES ADDRESSED BY PROJECT IMPLEMENTING AGENCIES ..................................................... 35 4.1 REASONS FOR HIGH BIDS..........................................................................................35 4.2 REASONS FOR LOW RESPONSE TO INVITATION TO BID ..................................................37 4.3 REASONS FOR COST OVERRUNS AND TIME EXTENSIONS ................................................38 5 ENHANCING ACCOUNTABILITY AND CONTROL OF CORRUPTION IN BANK- FINANCED PROJECTS IN THE ROAD SECTOR IN SUB-SAHARAN AFRICA ...... 41 5.1 RECOMMENDED ACTIONS ..........................................................................................41 5.2 CONCLUSIONS.........................................................................................................42 REFERENCES ......................................................................................................... 73 i ii MONITORING ROAD WORKS CONTRACTS AND UNIT COSTS FOR ENHANCED GOVERNANCE IN SUB-SAHARAN AFRICA ANNEXES ANNEX A: List of Red Flags ...................................................................................................45 ANNEX B: Comparison of Unit Costs and Engineer’s Estimate .....................................................59 ANNEX C: Results of Statistical Analysis of Unit Costs................................................................63 ANNEX D: Data on Bidding Information...................................................................................65 ANNEX E: Data on Cost Information .......................................................................................67 ANNEX F: Data on Supervision Consultancy Contracts ...............................................................69 ANNEX G: Data on Bridge Works Contracts..............................................................................71 LIST OF TABLES Table 2.1: List of road projects in Sub-Saharan Africa included in the study.................................... 4 Table 2.2: Main variables of the study....................................................................................... 5 Table 3.1: Percentage of contracts with cost overruns of more than 15 percent, by country .............11 Table 3.2: Time elapsed between bid opening and contract signing dates, by country .....................15 Table 3.3: Cost per km of a 2-lane road by type of work for inter-urban roads (2007 US$/km) ........16 Table 3.4: Average cost per km of a 2-Lane road by type of work and type of road, by country........16 Table 3.5: Average unit costs, by country (2007 US$)................................................................17 Table 3.6: Leading contractors by awarded contract totals ..........................................................20 Table 3.7: Statistical averages by geographical groups...............................................................20 Table 3.8: Cost per km a 2-lane road by geographical group and type of work (2007 US$) ..............21 Table 3.9: Average unit costs by geographical groups of contractors (2007 US$) ...........................21 Table 3.10: Average cost of supervision per km a 2-lane road by country (2007 US$).....................23 Table 3.11: Leading supervision consultants .............................................................................24 Table 3.12: Factors influencing unit costs - summary of results ...................................................33 LIST OF FIGURES Figure 3.1: Difference between contract values and engineer’s estimates, averages and ranges .......10 Figure 3.2: Cost overruns, averages and ranges by country ........................................................10 Figure 3.3: Difference between contract values and engineer’s estimates, and cost overruns ...........12 Figure 3.4: Average delay in completion of work in months, by country ........................................12 Figure 3.5: Average number of firms buying bidding documents, bidders, and bidders accepted for detailed examination, by country .................................................13 Figure 3.6: Average number of pre-qualified firms, bidders, and bidders accepted for detailed examination, by country................................................................................14 Figure 3.7: Distribution of the number of bidders, by contracts....................................................14 Figure 3.8: Percentage of contractors by geographical group.......................................................19 Figure 3.9: Share of total amounts of contracts awarded, by geographical group............................19 Figure 3.10: Ratio of supervision contract value to road works contract value ................................22 Figure 3.11: Percentage of supervision contracts, by geographical group ......................................23 Figure 3.12: Frequency of different types of red flags in the sample .............................................28 Figure 3.13: Frequency of types of red flags by country..............................................................29
Load more

Recommended publications
  • P4 Prime Minister Launches the Aberdare Trust - P8
    THE NEWSLETTER OF THE RHINO ARK CHARITABLE TRUST NO. 41 NOVEMBER 2012 RHINO CHARGE 2012 REsults - p4 PRImE mINIstER lAuNCHEs tHE AbERdARE tRust - P8 FINANCE mINIstER lAuNCHEs tHE mt KENyA FENCE - P9 2012 AbERdARE FENCE RuN GEts ROyAl NOd - P24 The Winning Team BRAEBURN’SEBURN’S CAR 49, CAPTAINED BY PATRICK GARNER AND TERRY CHILDS,CHILDS WONWON THE 2012 RHINO CHARGE. Winning is a goal we all strive for, but howw wewe achieve that goal is perhaps even more important. Those that make it to the totopp need real determination to keep going when things getet tough;tough; they need a “can-do” sort of attitude and a desire to deal with diffi culties head-on and not try to skirt around them or take the easy wayway out. Determination, a positive mindset, an ability to work with others as a team to support, encourage and be encouraged are the characteracter traits that success in all walks of life are built on. We all face challenges at different stages of our life; it is how we deal with these challengeslenges that will gauge how successful we will go on to be. The Braeburn Group of International Schools boasts an ethos of nurturing personal growthth byby providing a friendly and supportive environment in all our schools in East Africa. Early years, primary and secondary students develop thehe skills,skills, attitudes andan awareness necessary to become successful learners, confi dent individuals and responsible citizens. We congratulate the whole team! Rhino Ark Objectives Rhino Ark seeks solutions in the mountain range ecosystems of Executive Director’s view Kenya and for the benefit of Eastern s ht Africa generally to: rec At the crossroad… Christian Lamb • Conserve such ecologically precious indigenous forests and their provision of vital During the last 24 years, rarely have so many changes have taken place environmental services; in only a few months.
    [Show full text]
  • Restructuring Bowmans
    RESTRUCTURING BOWMANS 2 Restructuring Contents 04 Our Firm 05 Our Footprint in Africa 06 Our Restructuring Practice 07 Our Specialist Services 07 Our Signature Matters 11 Key Contacts 3 BOWMANS Our Firm We help our clients overcome legal complexity and unlock opportunity in Africa. ur track record of providing specialist Our expertise is frequently recognised by Olegal services in the fields of corporate independent research organisations. Most law, banking and finance law and dispute recently, at the inaugural IFLR1000 Awards resolution, spans over a century. for Sub-Saharan Africa (2020), we received 10 awards across four jurisdictions confirming With eight offices in seven African countries our leadership when it comes to advising on and over 400 specialist lawyers, we draw on multijurisdictional mergers and acquisitions in our unique knowledge of the business and Africa. At the African Legal Awards (2020), socio-political environment to advise clients we won awards in three categories and were on a wide range of legal issues. highly commended in a further four categories including African Law Firm of the Year – Large Everywhere we work, we offer clients a Practice. We received awards in three out of service that uniquely blends expertise in the four categories at the DealMakers East Africa law, knowledge of the local market, and an Awards (2019): top legal adviser in the M&A understanding of their businesses. Our aim Category for both deal flow and deal value is to assist them to achieve their objectives and advised on the Deal of the Year. In the as smoothly and efficiently as possible while DealMakers South Africa Awards (2019), we minimising the legal and regulatory risks.
    [Show full text]
  • 2014 Emissions Inventory Report
    Calendar Year 2014 Greenhouse Gas Emissions Inventory Report Prepared for: The U.S. Overseas Private Investment Corporation Prepared by: FINAL REPORT July 2016 SC&A, Inc. 1608 Spring Hill Rd., Suite 400 Vienna, VA 22182 (703) 893-6600 www.scainc.com i TABLE OF CONTENTS TABLE OF CONTENTS ................................................................................................................................. ii TABLES ......................................................................................................................................................... iii FIGURES ...................................................................................................................................................... iv INTRODUCTION ........................................................................................................................................... 1 Baseline Inventory Development .............................................................................................................. 1 2008-2012 Inventories .............................................................................................................................. 2 2013 Inventory Summary.......................................................................................................................... 3 2014 Inventory Summary.......................................................................................................................... 3 METHODOLOGY .........................................................................................................................................
    [Show full text]
  • VENTURING to AFRICA Overcoming Obstacles for Finnish VC Firms to Invest in Africa
    VENTURING TO AFRICA Overcoming Obstacles for Finnish VC Firms to Invest in Africa University of Helsinki, Faculty of Law Master’s Thesis International Business Law April 2021 Jacob Pichna Supervisor: Ville Pönkä Tiedekunta - Fakultet - Faculty Koulutusohjelma - Utbildningsprogram – Degree Programme Faculty of Law Master in International and Comparative Law Tekijä - Författare - Author Jacob Pichna Työn nimi - Arbetets titel Venturing to Africa: Overcoming Obstacles for Finnish VC Firms to Invest in Africa Oppiaine - Läroämne - Subject Law and Economics Työn laji/ Ohjaaja - Arbetets art/Handledare - Level/Instructor Aika - Datum - Month and year Sivumäärä - Sidoantal - Number of Master’s Thesis/ Ville Pönkä April 2021 pages 78 p. + XXVIII Tiivistelmä - Referat - Abstract The African start-up scene has been rapidly developing in recent years and respected Silicon Valley VC firms and large tech companies are moving in on the market which could be regarded as a signal of opportunity. Yet a single investment is to be made by a Finnish VC firm into an African start-up. The democratizing effect of technology and internet accessibility has led to the growth of innovation and disruption on the continent with the three selected jurisdictions for the thesis South Africa, Nigeria and Kenya leading the charge. Focusing on the three countries enables more a pragmatic analysis and thus applicable solutions. Analysing three different ecosystems also showcases the heterogeneity of the continent’s opportunities for VC firms. The objective of the thesis is to establish the main blockers for Finnish VC firms when weighing the option of investing in Africa and then provide solutions to overcome the obstacles whilst taking a form of a roadmap to also show the process of investing in Africa and its peculiarities.
    [Show full text]
  • Swedfund's Investments Through Funds
    Contents 1. Introduction ......................................................................................................................... 3 2. Overview of Swedfund’s investments through funds ....................................................... 4 3. Developments effects of Swedfund's investments through funds ................................... 6 3.1 A framework for monitoring and evaluating development effects ........................... 6 3.2 Financial performance .................................................................................................. 8 3.3 Economic performance ............................................................................................... 10 3.4 Environmental, social and governance performance ................................................... 13 3.5 Private sector development ........................................................................................ 17 4. Regional reviews ................................................................................................................ 21 4.1 Africa ............................................................................................................................. 21 4.2 Asia ................................................................................................................................ 23 4.3 Eastern Europe ............................................................................................................ 25 4.4 Latin America ..............................................................................................................
    [Show full text]
  • Development Finance As Agro-Colonialism
    REPORT Development Finance as Agro-Colonialism: European Development Bank funding of Feronia-PHC oil palm plantations in the Democratic Republic of Congo 2 Development Finance as Agro-Colonialism: European Development Bank funding of Feronia- PHC oil palm plantations in the Democratic Republic of Congo Redistribution of the material presented in this work is encouraged provided that the original text is not altered, that the original source is properly and fully acknowledged, and the objective of the redistribution is not commercial gain. This report is co-published by the following organisations: RIAO-RDC (DR Congo), FIAN Belgium, Entraide et Fraternité (Belgium), CCFD-Terre Solidaire (France), FIAN Germany, urgewald (Germany), Milieudefensie (The Netherlands), The Corner House (UK), Global Justice Now (UK), World Rainforest Movement (International), GRAIN (International) Date of Publication: January 2021 Design and Layout: Ruben Stelli (www.rubenstelli.nl), Tyra van Mossevelde (www.mosgroen.nl) Acknowledgments: Research for this report was part of an ESRC IIA University of Bristol-funded project entitled “Communities, land rights and development banks’ complaint mechanism: co-constructing a strategy and a toolkit for future meaningful participation.” Financial support for the research behind this report has also been received from CCFD-Terre Solidaire (France), FIAN Belgium, grassroots Foundation (Germany), Misereor (Germany) and the World Rainforest Movement (Uruguay). This publication has been produced with the financial support of
    [Show full text]
  • Effect of Chinese Firms on Local Firms in Nairobi, Kenya by Farhiya Yussuf
    EFFECT OF CHINESE FIRMS ON LOCAL FIRMS IN NAIROBI, KENYA BY FARHIYA YUSSUF IBRAHIM UNITED STATES INTERNATIONAL UNVERSITY - AFRICA SPRING 2019 EFFECT OF CHINESE FIRMS ON LOCAL FIRMS IN NAIROBI, KENYA BY FARHIYA YUSSUF IBRAHIM A Research Project Submitted to the Chandaria School of Business in Partial Fulfillments of the Requirements for the Degree of Master of Science in Organizational Development (MOD) UNITED STATES INTERNATIONAL UNVERSITY - AFRICA SPRING 2019 ii STUDENT’S DECLARATION I,theundersigned,declarethatthisis myoriginalworkandhasnotbeensubmittedtoanyothercollege,institution,oruniversityothertha ntheUnitedStatesInternationalUniversityin Nairobi foracademiccredit. Signature……………………………………Date……………………………………. FarhiyaYussuf Ibrahim (640003) Thisresearchissubmittedforexaminationwithmyapproval asuniversity supervisor. Signature………………………………… Date……………………………………. PROF. TIMOTHY OKECH Signature………………………………… Date……………………………………. Dean, Chandaria School of Business iii COPYRIGHT Alltherightsreserved.Nopartofthisreportmaybephotocopied,recordedorotherwisereproduced, storedinaretrievalsystemortransmittedinanyelectronicormechanicalmeans without prior permission ofthe copyrightowner. FarhiyaYussuf IbrahimCopyright © 2019 iv ACKNOWLEDGEMENT Iwouldliketobegin by giving thankstoAllahfor thestrength,courage,andguidancehehasofferedtomeduringtheprocessofpreparingmyprojectf ormygraduatestudies.Ialsogiveappreciateandacknowledgemygreatfamilyfortheuncondition alsupporttheyofferedme,andtoProf. Timothy Okechforherpatience,directionandmotivationthatsheaccordedmeinwritingupthisresearchMa
    [Show full text]
  • Thomas B. Trimble Partner, Washington, D.C
    Thomas B. Trimble Partner, Washington, D.C. +1 202-282-5155 [email protected] Tom is a leading international transactions, private equity and project finance lawyer with over 30 years of experience in cross-border and emerging markets transactions, representing clients in over 60 countries across five continents—primarily in the infrastructure, energy, mining and telecommunications industries. Tom Trimble advises clients on matters involving project finance and development, private equity investors, mergers and acquisitions, and structured finance. He advises U.S., European and emerging markets companies, private equity funds and foreign governments in connection with equity and asset acquisitions and sales, project finance, infrastructure development and renewable energy transactions. Tom is one of the industry’s leading lawyers representing investors in transactions across a broad range of emerging markets, with core concentration in the markets of Africa and Latin America. Geographic coverage in the emerging markets includes: 20 Countries in Africa: Nigeria, Kenya, Ghana, Tanzania, Ivory Coast, Zambia, Zimbabwe, Algeria, DRC, Mozambique, Morocco, South Africa, Angola, Cameroon, Uganda, Rwanda Senegal, Mauritius, Central African Republic and Liberia. 15 countries in Latin America: Argentina, Bolivia, Brazil, Ecuador, Colombia, Costa Rica, Dominica, Dominican Republic, Guatemala, Haiti, Jamaica, Mexico, Nicaragua, Peru and St. Lucia. 15 countries in Europe and the Middle East: Russia, Belarus, Moldova, Ukraine, Kazakhstan, Uzbekistan, Poland, Romania, Hungary, Czech Republic, Macedonia, Turkey, Oman, Saudi Arabia, UAE. 11 countries in Asia: Pakistan, Indonesia, Vietnam, Thailand, Myanmar, Singapore, Malaysia, China, South Korea, Mongolia and Japan. Industry experience includes: Power, Telecommunications, Oil and Gas, Broadcasting and Media, Chemicals, Mining, Financial Services, Gas Trading, Port Facilities and Logistics, Cell Tower Infrastructure, Agribusiness, Insurance, Education, Food Services, Retail and Construction.
    [Show full text]
  • 2020 Letter CONT Committee Spencon
    TO EUROPEAN PARLIAMENT, BUDGETARY CONTROL COMMITTEE (CONT) CHAIR Monika Hohlmeier VICE-CHAIRS Isabel Garcia Munoz Caterina Chinnici Martina Dlabajova Tamas Deutsch April 7, 2020 Dear Chair and Vice-chairs of the CONT Committee, Flagship BBC programme reports allegations of bribes, fraud and mismanagement in Kenya company owned by European Investment Bank (EIB)-financed private equity fund: concerns that the EIB has signed away powers to protect billions of pounds of EU aid money. A recent report1 by Counter Balance raised concerns that the European Investment Bank (EIB)’s use of financial intermediaries, such as private equity funds2, is putting EU aid money and development finance at financial or reputational risk through alleged or actual mismanagement, corruption, fraud or other abuses by the companies in which the intermediary funds are invested. Given these concerns, we are writing to draw the CONT Committee’s urgent attention to shocking allegations, reported on last night by the award-winning BBC documentary programme African Eye. The programme reported on serious concerns of alleged fraud, bribery and other highly questionable business practices by two British managers appointed by a European Investment Bank (EIB)-backed private equity fund to run its investee Kenyan firm Spencon3. The allegations are vehemently denied by the managers.4 A transcript of the programme is attached. 1 https://www.counter-balance.org/wp-content/uploads/2019/10/Report_OnlineVersion_EIB_Corruption_Oct2019.pdf 2 As at the end of June 2019, the EIB has invested in 47 active private equity funds in the Africa, Caribbean and Pacific (ACP) regions, to which it has committed a total of €705.9m.
    [Show full text]
  • PIDG Annual Report 2010 Contents
    PIDG members PIDG Annual Report 2010 Contents Acronyms and abbreviations 3 Development impact 26 Foreword 4 The results framework 27 2010 in review 8 Managing expectations 27 What actually happened 34 The Infrastructure Challenge 12 Vital services needed 12 Project financing and development facilities 36 Investment overstretched 12 The Emerging Africa Infrastructure Fund Ltd. 37 Obstacles to private sector involvement 14 GuarantCo Ltd. 43 What we do 14 Infrastructure Crisis Facility – Debt Pool 47 DevCo 50 Our distinctive approach 16 Technical Assistance Facility 54 Beyond ‘business as usual’ 17 InfraCo Ltd. 56 The creative tension 19 InfraCo Asia Development Pte. Ltd. 60 The project portfolio 20 In conclusion 61 Overall portfolio 21 Portfolio by facility 21 Annex 1: PIDG structure and governance 65 Portfolio by sector 22 Annex 2: DAC list of ODA recipients 66 Portfolio by region 25 Annex 3: Contributions by the PIDG members 68 Annex 4: PIDG project portfolio 70 Annex 5: Contacts and links 85 Acronyms and abbreviations ACL Ackruti City Ltd. IPP Independent Power Producer ADA Austrian Development Agency ISSIF InfraCo Sub-Saharan Infrastructure Fund AECID Agencia Española de Cooperación Internacional para el Desarrollo (Spanish JDA Joint Development Agreement Agency for international development cooperation) JICA Japanese International Cooperation Agency AfDB African Development Bank KEK Korporata Energjetike e Kosovës (Energy Corporation of Kosovo) AFL Africa Foundries Limited KfW KfW development bank (the German Development Bank) AICD
    [Show full text]
  • CHAPTER 2: Global Challenges and Impact
    global challenges 2 and impact where challenges The global crisis changed the economic order, deepening the challenges developing countries will face in the decades ahead. Joblessness is making it harder for families to improve their living standards. Growing energy needs are exacerbating the threat of climate change. Rapid population growth is overwhelming urban infrastructures. Water scarcity and inadequate food security are endangering the lives of millions. Such strains also heighten the potential for confl ict. solutions meet Promoting sustainable development inthis era of they also will be critical forglobal prosperity. and more accessible, give communities access to advisory projects ease on services focused that are and innovation — and the ability mobilize to — resourcesand innovation conditions inareas ravaged byconfl fosterclean sustainable water, cities, and improve countries will not only havethe most— urgent needs IFC is playing aleading roleinhelping the private interconnected and multipolar world, developing developing world, multipolar interconnected and wherever they can be found. Inan increasingly unemployment and climate change, food make safer uncertainty will depend more than ever on partnerships sector address these challenges. Our investments and ict. p9 global challenges p10: results p16: strategy/scorecard p18: unemployment (gender program, extractive industries) p28: climate change (renewable energy, Lighting Africa) and impact p38: food security (food production, insurance) p46: confl ict (Haiti, Africa) p56: water & urbanization (water security, south-south investment) p66: lessons learned GLOBAL CHALLENGES AND IMPACT IFC’s global impact RESULTS FOSTERING SUSTAINABLE PRIVATE SECTOR GROWTH BY REGION IFC works with private sector clients across a swath of industries to improve www.ifc.org/results_region lives in the world’s most impoverished regions.
    [Show full text]
  • Celtel Kenya
    CELTEL KENYA KES 725 million partial credit guarantee to credit enhance a local bond issue as part of a larger financing package for the second mobile telecommunications provider in Kenya. Transaction Overview Date: December 2005 Country: Kenya Developmental Benefit GuarantCo Guaranteed Amount: Kenya Shillings (KES) 725 million (USD 12 million) Celtel Kenya needed to restructure its balance sheet by exchanging costly Total Transaction size: KES 3.5 billion foreign currency shareholder loans with local currency debt. This allowed the Financing Partners: FMO, DEG company to run a more capital-efficient and competitive business and expand its GuarantCo Additionality: network. This helped to reduce tariffs, thus making mobile services affordable to As part of its initiative to maximise local currency financing, Celtel Kenya sought to raise Kenyan Shilling a greater proportion of the population. debt from the local capital market. However, in order to place debt in the local capital market, Celtel Kenya needed to obtain credit enhancement from an AAA-rated institution. GuarantCo’s involvement enabled FMO to arrange and underwrite the required credit enhancement for the debt issuance. The facility provided a major boost to the Kenyan capital market due to the demonstration effect of a private sector non-financial institution’s successful bond listing. ALAF LIMITED TZS 6.5 billion partial credit guarantee made available to provide credit enhancement for a bond issue to finance the expansion of a steel plant in Tanzania Transaction Overview Date: June 2007 Country: Tanzania Developmental Benefit GuarantCo Guaranteed Amount: Tanzania Shillings (TZS) 6.5 billion (USD 5.1 million) The Safal group is one of the biggest producers of steel roofing in Africa, widely Total Project Cost: TZS 37.3 billion used in affordable housing.
    [Show full text]