Our financing conditions

A few indicative criteria

Overall conditions:
  
  • PROPARCO funding is open to all private businesses and all projects dealing with the private sector except for those dealing with real estate or short-term projects
  •  PROPARCO usually provides funding between 2 and 100 million euros
  • The project promoters must have substantial experience in the sector or have as a partner a company which is internationally recognized as being an expert in the area
  • The project’s promoters must provide a minimum capital of approximately:
    -30% of the cost of the project in the case of an expansion program,
    -40% of the cost of the project in the case of a new project (Greenfield).
 
 
Conditions relative to equity investments:
  • Objective:  minority shareholdings destined to be deeded to other shareholders, to third parties or to the financial market after four to eight years
  • Eligibility criteria:
    - profitability:  minimum profitability rate of approximately 15%
    - solvency: exit on the capital markets or a put option on the shareholding 
  • Financial structure:

- ordinary or preferential shares, convertible bonds, participatory loans, subordinated loans;
- appraisal fee:  2% of the amount provided by PROPARCO:  half due before the beginning of the appraisal (non-refundable), and the balance due once the authorization of PROPARCO’s decision-making bodies has been obtained..

 
Conditions relative to medium and long-term loans:
  • Objective:  the medium and long-term funding of investment programs (creation, expansion, restructuring, privatization, etc)
  • Guarantees:  banking guarantee, group guarantee, mortgage, deposit, etc...
  •   Financial structure :
    -currency:  USD or euros;
    -interest rate:  fixed or variable, LIBOR or EURIBOR + the margin according to the collateral risk;
    -term: three to 15 years with a possible grace period;
    -appraisal fee:  1% of the amount to be provided by PROPARCO:  half due before the beginning of the service (non-refundable) and the balance due once the authorization from PROPARCO’s decision-making bodies has been obtained
 
 
Conditions dealing with loan guarantees in local currency
  • Objective:  guarantee debt repayment in local currency, with a view towards facilitating the mobilization of resources in local currency for private borrowers, within the framework of funding their medium and long-term investment programs
  • Guarantees:  banking guarantee, group guarantee, mortgage, deposit, etc...
  • Financial structure:
    -up-front guarantee fee:  calculated on the basis of the outstanding debt over its duration;
    -term:  a minimum of three years;
    -appraisal fee:  1% of the guaranteed amount to be provided by PROPARCO:  half due before the beginning of the service (non-refundable) and the balance due once the authorization from PROPARCO’s decision-making bodies has been obtained.
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Last update in January 2011