According to the Bank’s website, the Project Development Objective is to establish a Credit Guarantee Vehicle to mobilize capital for investment in resilient infrastructure. The Project will establish a Credit Guarantee Vehicle to mobilize capital including private capital, public capital, capital from development partners and concessional resources for investment in critical and resilient infrastructure such as electricity, transport and logistics, and water and sanitation sectors, to create jobs, reduce carbon emissions and deliver infrastructure services for citizens and businesses.

The Project will have 3 components:
* Component 1: Capitalization of the Credit Guarantee Vehicle (CGV) will establish and scale a privately managed, non-life insurance company licensed by the Prudential Authority to issue market-priced credit guarantees that de-risk key project-finance risks, beginning with public offtaker payment and termination risks, to enable private participation in priority sectors; it will operate under robust governance, an Environmental and Social Management System aligned with IFC Performance Standards, and a tiered capital structure to crowd in diverse investors while coordinating with World Bank Group partners. Sub-components include Start-up capital to operationalize the CGV with professional management, Initial capitalization to begin underwriting guarantees for early transactions such as independent transmission projects, and Scale-up capitalization to expand guarantee capacity and sector coverage as the pipeline matures.
* Component 2: Project Pipeline Development, implemented by the Development Bank of Southern Africa (DBSA), will prepare a pipeline of bankable public-private partnership transactions by financing early-stage work and standardizing approaches across priority sectors. Sub-components include Client engagement and screening, (pre)feasibility and due diligence, Legal, financial, and operational structuring, and Standardization and bankability support for transactions that may be eligible for CGV de-risking.
* Component 3: Project Coordination and Implementation will establish a Project Implementation Unit at DBSA to manage fiduciary, environmental and social, and monitoring and evaluation functions; support CGV licensing and operational readiness; and integrate gender and learning. Sub-components include PIU establishment and systems, CGV operational support, Gender action plan and reporting with targets for women's representation in the CGV board and senior management, and Learning agenda and monitoring and evaluation to inform subsequent phases.

The environmental and social category is High risk (FI-I). The risk rating has been assigned due to the anticipated downstream financial exposure associated with the large infrastructure developments, facilitated by guarantees from the CGV, that have a potential to cause significant adverse environmental and social risks and impacts that are considered diverse and irreversible if not properly mitigated. The exact pipeline projects and locations are not yet known and will only be defined during project implementation. However, this is a “specific purpose portfolio” since the use of guarantees can be tracked to specific investments.

Total Project Cost: US$ 4000.00 million
International Bank for Reconstruction and Development: US$ 338.82 million

CONTACT POINT - World Bank

Task Team Leader: Marc Schrijver
Title: Senior Financial Sector Specialist
Email: mschrijver@worldbank.org

TTL Contact: Joonkyung Seong
Job Title: Senior Energy Economist
Email: jseong@worldbank.org

ACCESS TO INFORMATION

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ACCOUNTABILITY MECHANISM OF THE WORLD BANK

The World Bank Inspection Panel is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by a World Bank-financed project. If you submit a complaint to the Inspection Panel, they may investigate to assess whether the World Bank is following its own policies and procedures for preventing harm to people or the environment. You can contact the Inspection Panel or submit a complaint by emailing ipanel@worldbank.org. Information on how to file a complaint and a complaint request form are available at: https://www.inspectionpanel.org/how-to-file-complaint