International development financial institution GuarantCo has appointed Cardano Development as its new manager, with immediate effect, as it looks to grow its portfolio.
Cardano Development has created a specialised subsidiary based in London to manage GuarantCo’s work. It will seek out projects, evaluate loan applications, carry out due diligence and manage the administration of transactions. It will also market GuarantCo internationally and monitor the portfolio.
“Cardano Development is well positioned to help provide the support GuarantCo needs to expand,” says GuarantCo chair Andrew Bainbridge. “Their knowledge and expertise will not only help GuarantCo increase its impact on Africa, but will help the expansion and development of an even stronger presence in Asia. With the devaluations that have occurred over the last 18 months in parts of Africa, now more than ever is there a need for local currency funding. Over the next year our work will particularly focus on the power sector where infrastructure continues to be financed almost exclusively in hard currencies, even for smaller renewables projects that could be readily financed by the local markets in our target countries.”
Bainbridge adds that outgoing managers Frontier Markets Fund Managers Limited have done a “superb job” over the past decade. “The board and I would like to express our thanks to the team and their owner Harith General Partners for helping to make GuarantCo the organisation it is today. I am delighted the FMFML team in London and Nairobi that built the business, including managing director Chris Vermont, have elected to transfer across to Cardano.”
GuarantCo is a public/private partnership that helps finance privately-sponsored infrastructure projects in Africa and Asia’s emerging and frontier markets, providing local currency guarantees to local and regional banks so that they can raise medium and long-term debt. GuarantCo can also provide dollar-denominated guarantees in fragile and conflict-affected countries.
Set up to help promote economic development and reduce poverty, GuarantCo has to date issued guarantees totalling US$513mn for 36 infrastructure projects in 14 lower-income countries, creating 275,000 jobs and giving 32.2 million people improved access to infrastructure. It has an ambitious target to have outstanding guarantees of greater than US$1bn by 2020.
GuarantCo is funded by the governments of Australia, the Netherlands, Sweden, Switzerland and the UK.