The African Guarantee Fund for Small and Medium-Sized Enterprises (AGF has entered into a re-guarantee transaction of an amount of up to US$74 million with GuarantCo to increase its guarantee capacity for SME financing.
Over the last six years, AGF has led the guarantee market in Africa by issuing financial guarantees to a tune of US$690 million, enabling its partner financial institutions to issue loans estimated at US$729 million to about 7,600 African SMEs.
GuarantCo is part of the Private Infrastructure Development Group (PIDG), and is a global guarantee fund that has issued over US$900 million of guarantees since inception in 2005, with a mandate to enable local currency finance for infrastructure.
“AGF is glad to be joined by GuarantCo in bridging the infrastructure financing gap. This partnership aims to put in place an even stronger collaboration that will work on the entire value chain of infrastructure projects in Africa. We are looking forward to supporting other SMEs that work with key players in the infrastructure sector,” said Felix Bikpo, AGF’s chief executive officer (CEO).
Lasitha Perera, GuarantCo’s CEO, said the company was “delighted” to be able to partner with the African Guarantee Fund and increase support to SMEs active in the infrastructure sector in Africa.
“This collaboration between two local currency focussed guarantors offers the potential for us to engage local financial institutions and investors in financing the entire value chain in an African infrastructure project,” Perera said.