Type of risk
PCGs credit-enhance all or a portion of the funding provided by private financiers, such as the repayment of loans, bonds or other debt financing instruments, and can be designed to cover any category of risk, including financing risk, construction risk, operation risk, fuel supply risk, hydrologic risk, and other project risks, which could ultimately trigger a debt payment default to credits.
As such, PCGs can support the mobilization of private funds for project finance, financial intermediation, government borrowing from commercial lenders, or government bond issues to finance public investment projects by improving financial terms and conditions, such as longer maturity, more favorable pricing, or improved market access.
Type of risk
PRGs cover the risk of non-performance by the sovereign, or a government-owned entity of certain contractual obligations undertaken in relation to a private party, which could ultimately trigger a debt payment default to creditors. PRGs typically cover currency convertibility and transferability, and contract frustration.
PRGs are particularly useful in project finance transactions, especially in sectors like infrastructure, where project success often depends on government undertakings.
PRGs can be especially effective in attracting private financing to projects, traditionally in the context of Public-Private Partnerships (PPPs), by mitigating risks related to a sovereign or government’s failure to meet its contractual obligations to private parties.
Based on the principle of net income neutrality with loans, i.e. no cross-subsidies between loans and guarantees:
Period: Max. 20 years if tied to policy-based interventions or Max. 25 years if supporting investment projects.
Weighted Average Life (WAL) of underlying guaranteed obligation:
Max. 12.75 years if tied to policy-based interventions or Max. 15.25 years if supporting investment projects.
Fees:
Guarantee Fee: Same as the IDB’s Ordinary Capital (OC) lending spread (80bps for 2025).
Stand-by Fee: Same as the commitment fee rate (50 bps for 2025). Charged on the difference between the maximum guarantee amount and the actual guaranteed exposure amount.
Reimbursement of Claim: Payable upon demand unless otherwise determined by the Bank on a case-by-case basis.
Investments with defined objectives and scopes
Specific Investment Loans
(ESP)
Contingent credit line for immediate response after a disaster
Contingent Credit Facility for Natural-Disaster and Public-Health Emergencies
(CCF)
Results of an existing or new government program
Loan Based on Results
(LBR)
Post-disaster response activities
Immediate Response Facility for Emergencies caused by disasters
(IRF)
Small independent investment projects
Multiple Works Loans
(GOM)
Loans to small and medium-size enterprises
Global Credit Loans
(GCR)
Transfer of technical know-how
Reimbursable Technical Cooperation
(TCR)
Project's preparation and start of activities
Project Preparation and Execution Facility
(PROPEF)
Credit line to support investment loans
Conditional Credit Line for Investment Projects
(CCLIP)
This project will help reduce the housing deficit in Ecuador by providing mortgage loans for affordable housing through intermediate financial institutions.
The project’s overall impact is to increase access to Public-Interest Housing (PIH) for families with the ability to pay by providing mortgage loan solutions. Among other outcomes and impacts, the project placed US$300 million of PIH loans through private banks and local entities between 2019-2022. It also increased the percentage of women over 15 with an active mortgage loan to 6%. In addition, it increased the value-added in construction activities in the PIH segment to US$68.2 million between 2020-2022, while increasing mortgage loans for PIH in relation to total mortgage loans to 12.6% over the same period.
This project will promote reforms towards a more productive and healthier ocean in Bahamas through several aspects of the Blue Economy: promoting MSMEs, digitalization and blue bond financing, while improving resilience through enhanced climate risk management in coastal and offshore areas, including better management of marine resources and reducing marine pollution.
The reforms included in this program will benefit firms operating in the Blue Economy by improving the business and investment climate for ocean related economic activities, and by promoting better management practices that improve the sustainability of marine resources that those firms harvest. This will also benefit Bahamian citizens and firms by promoting reforms that will reduce marine pollution. Among other outcomes and impacts, the reforms supported 249 MSMEs in the Blue Economy, and 1,666 employees benefitting from them. Likewise, the Ocean Health Index (OHI) increased to 85.5, while the Illegal, Unreported and Unregulated (IUU) Fishing Index decreased to 1.97, as the annual revenue from flat fishing licenses and permits issuance increased to US$154,000.