Credit Guarantee and Investment Facility - Construction Period Guarantee Facility
Construction Period Guarantee Facility
The Credit Guarantee and Investment Facility (CGIF) was established in 2010 by 10 ASEAN countries, China, Japan, Republic of Korea, and the Asian Development Bank. The CGIF is part of the Asian Bond Markets Initiative and serves to provide credit guarantees for local currency denominated bonds issued by investment grade companies in ASEAN+3 countries.
CGIF offers construction period guarantees to issuers of project bonds. The guarantees secure the completion of construction works and commencement of operations of greenfield infrastructure projects. If the construction phase is not successfully completed, CGIF will reimburse bondholders all amounts owned by project companies. Due to CGIF´s due diligence process in the course of providing the guarantee, investors are assured that construction risks are well assessed and covered.
Eligible projects and transactions
The construction period guarantee is provided for local currency bonds or notes issued via public or private placement by an earmarked special purpose vehicle to finance an infrastructure project.
Projects need to prove robust construction programs executed by experienced contractors with low operational phase risks. Projects need to comply with CGIF´s environmental and social safeguards and due diligence requirements, including third-party opinions on technical aspects of the construction works and contractual arrangements.
Six ASEAN countries with local bond markets: Indonesia, Malaysia, Philippines, Singapore, Thailand and Vietnam.