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Inter-American Development Bank

Partial Credit Guarantees

Instrument description

The Inter-American Development Bank (IADB) offers partial credit guarantees (PCGs) to reallocate project risks, improve terms for project financing and contribute to attracting investments in Latin America and the Caribbean. PCGs protect lenders against debt service default on a share or on the entire project costs. For public sector projects, PCGs can be designed to address specific debt repayment structures and a range of risk categories, including financing, construction and operation.

PCGs can be used for:

  • Enhancement of the issuance of bonds
  • Project finance
  • Asset-backed securities
  • Securities backed by future flows

Eligible projects and transactions

The PCG instrument is part of IADB´s Flexible Guarantee Instrument and applies for Sovereign Guaranteed operations.

Eligible regions

IADB member countries.

Key features

  • Size of coverage: Up to 100 per cent of costs. Adjusted to project specificities to optimize impact on the underlying instrument’s rating.
  • Tenor of coverage: Maximum guarantee tenor of 25 years for investment operations and 20 years for policy-based interventions in countries that receive blended loans.
  • Costs: Pricing neutrality applies between guarantees and loans. Details: http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=40852576
  • Currency: USD

Political Risk Guarantees

Instrument description

The Inter-American Development Bank (IADB) offers political risk guarantees (PRGs) to re-allocate project risks, improve terms for project financing, and contribute to attracting investments in Latin America and the Caribbean. PRGs cover non-performance risks by public sector borrowers on certain contractual obligations towards a private party, which could result in debt payment default. Covered risks include restrictions on currency conversion and transfer, and contract frustration.

PRGs can be used for:

  • Enhancement of the issuance of bonds
  • Project finance
  • Asset-backed securities
  • Securities backed by future flows

Eligible projects and transactions

The PCG instrument is part of IADB´s Flexible Guarantee Instrument and applies for Sovereign Guaranteed operations.

Eligible regions

IADB member countries.

Key features

  • Size of coverage: Up to 100 per cent of costs. Adjusted to project specificities to optimize impact on the underlying instrument’s rating.
  • Tenor of coverage: Maximum guarantee tenor of 25 years for investment operations and 20 years for policy-based interventions in countries that receive blended loans.
  • Costs: Pricing neutrality applies between guarantees and loans. Details: http://idbdocs.iadb.org/wsdocs/getdocument.aspx?docnum=40852576
  • Currency: USD

Eligible Countries

  • Flag of Argentina
    Argentina
  • Flag of Bahamas, The
    Bahamas, The
  • Flag of Barbados
    Barbados
  • Flag of Belize
    Belize
  • Flag of Bolivia
    Bolivia
  • Flag of Brazil
    Brazil
  • Flag of Chile
    Chile
  • Flag of Colombia
    Colombia
  • Flag of Costa Rica
    Costa Rica
  • Flag of Dominican Republic
    Dominican Republic
  • Flag of Ecuador
    Ecuador
  • Flag of Guatemala
    Guatemala
  • Flag of Guyana
    Guyana
  • Flag of Haiti
    Haiti
  • Flag of Honduras
    Honduras
  • Flag of Jamaica
    Jamaica
  • Flag of Mexico
    Mexico
  • Flag of Nicaragua
    Nicaragua
  • Flag of Panama
    Panama
  • Flag of Paraguay
    Paraguay
  • Flag of Peru
    Peru
  • Flag of Suriname
    Suriname
  • Flag of Trinidad & Tobago
    Trinidad & Tobago
  • Flag of Uruguay
    Uruguay
  • Flag of Venezuela
    Venezuela