World Bank PCGs

Partial credit guarantees (PCGs) support government borrowing from commercial lenders or government bond issues to finance public investment projects. They provide compreh. MIGA offers political risk insurance (PRI) coverage to foreign direct investors for any combination of the following political risks: transfer restriction, expropriation, war and civil disturbance, and breach of contract. MIGA can insure direct equity, quasi-equity, non-equity direct, and other investments. To insure debt, however, it must have an equity link. MIGA guarantees cover new foreign currency-denominated investments, including "new" investments to existing investments, investments by private for-profit and nonprofit organizations, and publicly owned investors and organizations that operate on a commercial basis. MIGA can cover any freely usable currency, which may include local currency investments/loans. Under certain circumstances, MIGA can cover investments by local investors.

ensive cover against all risks. Policy-based guarantees are a type of PCG that are not associated with specific public investment projects, and instead support agreed policy reforms. Both PCGs and PBGs are available only to IBRD countries and require a government counter-guarantee. Partial risk guarantees (PRGs) cover commercial lenders for a private sector project against default arising from a government-owned entity failing to perform its obligations. PRGs can cover changes in law, failure to meet contractual payment obligations, expropriation and nationalization, currency transfer and convertibility, nonpayment of a termination amount, failure to issue licenses in a timely manner, other risks to the extent they are covered by a contractual obligation of a government entity, and noncompliance with an agreed dispute resolution clause. PRGs can be provided in both IBRD and IDA countries and require a government counter-guarant. IFC PCGs are a credit-enhancement mechanism for debt instruments (bonds and loans). They are an irrevocable promise by IFC to pay principal and/or interest up to a predetermined amount, irrespective of the cause of the payment default. They can be applied to a single credit or to a portfolio of credits This provides a credit enhancement guarantee in a non-lending situation where the objective is to back up a client’s performance of its obligation in a commercial transaction that involves the provision of goods and services, such as guarantees of bid or performance bonds (called standby letters of credit in the United Stat.The Global Trade Finance Program (GTFP) supports trade transactions by offering confirming banks partial or full guarantees that cover payment risk on issuing banks in emerging markets. Guarantees issued under the GTFP cover import and export transactions and extend to both political and commercial payment risks. IFC's Global Offshore Liquidity Facility (GOLF) provides single risk coverage for transfer and convertibility risk.