Angola’s finance ministry has signed a US$1.1bn World Bank and export credit agency (ECA)-backed financing for developing critical water supply infrastructure in the south of the nation’s capital.

Closed at the end of June this year, the transaction consists of two loans. The first, for US$910mn, is supported by a World Bank IBRD guarantee, with Standard Chartered acting as sole advisory and coordinator bank. The bank also came in as joint underwriter alongside BNP Paribas, and served as mandated lead arranger (MLA), facility agent and account bank. Also involved in the syndicate were Crédit Agricole, Credit Suisse and Société Générale. The financing was additionally supported by Africa Trade Insurance and the private insurance market, and according to Standard Chartered, it sets a record as the largest IBRD partially guaranteed financing globally to date.

The second facility, a US$165mn structured loan backed by Bpifrance Assurance Export, the French ECA, saw Standard Chartered come in as sole MLA and underwriter. Santander and Helaba also participated. This financing supports exports by French firms Suez and Saint Gobain into the project.

“This landmark transaction is a perfect example of what can be achieved, even under challenging market conditions, if development finance institutions, export credit agencies, international banks and the insurance market come together to support a common objective for their key client,” says Alper Kilic, global head of project and structured export finance at Standard Chartered.

The aim of the project, known as the Luanda Bita Water Supply Guarantee Project, is to improve access for over 2 million residents to potable water service in south Luanda. According to the World Bank, access to safe water and sanitation is exceptionally low in Angola; it ranks 138 out of 140 for reliability of water supply. The country is facing significant climate change challenges and is already experiencing regional droughts that put pressure on water supplies.

“This transformational project is critical to meet the development goals of Angola as it will bring safe and reliable water service to south Luanda,” says Sebnem Erol Madan, practice manager, infrastructure finance, PPPs and guarantees at the World Bank. “This project is also a great example of [an] innovative blended finance solution to mobilise private capital using World Bank guarantees. Through existing water sector engagement and strong relationship with the government of Angola, the World Bank team helped optimise the project design and introduced distribution network investments to ensure connectivity. The World Bank partial credit guarantee was able to provide greater comfort to the financial markets and secure competitive financing for the project.”

Proceeds of the financing will be used for investments in water production, transmission and distribution facilities, comprising a water treatment plant, a transmission system, water storage facilities, distribution centres and installation of new networks and metered connections.

The transaction is the fifth to be concluded by Standard Chartered for Angola’s ministry of finance in the past three years, bringing the total amount of financing to over US$2bn. The bank has assisted the government in financing a wide range of projects across various infrastructure sectors such as power, agricultural and healthcare infrastructure. These include the development of three priority healthcare projects; the Mother and Child Hospital in Luanda, the Paediatric Haematological Institute of Luanda and the General Hospital of Cabinda.