The GIF supports Governments in bringing well-structured and bankable infrastructure projects to market. GIF’s project support can cover the spectrum of design, preparation, structuring and transaction implementation activities, drawing on the combined expertise of the GIF’s Technical and Advisory Partners and focusing on structures that are able to attract a wide range of private investors.
The GIF’s project preparation and transaction support activities can include advisory support to client Governments as needed through the following project stages:
Preliminary work to prioritize investments and test a project concept through “pre-feasibility” analysis; as well as support to legal, regulatory, or institutional reforms as required to enable successful development and/or participation of long-term private capital in the financial structure of a particular project.
Support to the full range of project preparation and appraisal activities required to bring the project to a point where the government is able to make an informed decision to proceed with a transaction. This could include support for technical, economic, and other feasibility studies, social and environmental impact assessments, investment appraisal and risk analysis, and public-private partnership (PPP) structuring.
Support in preparing transaction documentation and managing a competitive transaction process, which could include initial design of risk mitigation/credit enhancement packages.
Continued support to the client government as a project moves from commercial to financial close. This could include, for example, updates to pricing and fiscal analysis related to government contributions, as well as guidance on selection of the most appropriate credit enhancements.
Within this range of possible activities, the scope of GIF preparation and transaction support to a particular project should be defined to complement other identified and potential sources of funds for project preparation and transaction implementation, in a way that is both flexible and comprehensive. That is, GIF resources can be used to fill any gaps in project preparation or structuring needs given other resources available, and should take into account the full range of additional work needed to bring a project through to successful financial close.
GIF activities will be undertaken stage-by-stage, ensuring that benefits, costs and risks are appropriately considered at each stage. This approach, combined with the GIF’s risk-sharing reimbursement model—under which costs are recovered from the winning bidder upon successful financial close—the GIF significantly mitigates overall project preparation “failure risk” for its client governments.
Going forward, the GIF intends to complement its project preparation and transaction structuring activities by introducing a flexible financing window, with resources available to inject into the project financial structure. This financing window—now under design, in close consultation with GIF Partners—is expected to be used flexibly to backstop the provision of credit enhancements, take first loss, or support financial instruments that would not otherwise be available and in response to the specific needs of GIF projects—with a view to encouraging innovation in design or use of those mechanisms and/or to fill specific project financing gaps.