• Benjamin Mugisha
• Resident Underwriter
• African Trade Insurance Agency (ATI)
• Central, East & Southern Africa
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The FACTS on ATI
Who are we?
● Multilateral institution owned by African governments, established
with World Bank support. Registered under United Nations treaty
● Provide insurance products to promote economic growth in
member countries through increased investment and trade
Benin, Burundi, DR Congo, Kenya, Madagascar, Malawi,
Rwanda, Tanzania, Uganda and Zambia
● Preferred Creditor Status with member countries – provides a
value-added for project partners
● Facilitated business transactions over US$17 billion since 2001
● Leverage capacity through partnerships with major public & private
sector insurers: Export Credit Agencies, the Private Market,
Munich Re, etc.
● Standard & Poors rating of A/Stable
What do we do?
● Provide investment insurance to commercial
bank lenders and private sector equity investors
● Provide trade credit insurance products to
commercial bank lenders and private sector
traders of goods and services
● Attract provision of similar insurance by other
international investment and trade credit insurers
● Facilitate partnerships between African countries,
lenders, investors, traders and insurers
What is Investment Insurance?
Investment Insurance provides protection against specific non-
commercial risks including:
● Currency conversion and transfer restrictions
● Expropriation – outright and creeping
● Political Violence – asset damage or inability to operate
● Breach of Contract – by public obligors
● Non-Payment by sovereign and public borrowers
Our insurance helps investors, lenders & traders improve the risk
profile in member states. Many need this insurance as a condition
of internal approvals in many developing countries
What is Trade Credit Insurance? Trade Credit Insurance provides protection against the credit
risk of non-payment:
● Non-payment by private sector
● Protracted payment default and/or insolvency, can also
include political risks (comprehensive)
● Whole Turnover (multiple buyers) or Single Obligor
● Short-term trade, longer-term engineering, procurement &
construction (EPC) and capital goods sales
● Performance and bid bonds
Insurance often required as a condition of trade, supplier and
buyer credit provision in developing and developed countries
Case Examples
Case Example #1:
Independent Power Project (IPP)
Private sector power developer proposes to invest in a greenfield power
generation project in a member state
Project costs to be financed through a foreign equity investment (30%), and
loans from foreign lenders (70%)
National power utility agrees and enters into a long-term power purchasing
agreement (PPA) with the special purpose project company
ATI agrees to provide:
● Foreign investor and lenders with non-payment insurance against PPA
breach by the power utility
● insurance enabling investors to move funds offshore
ATI insures those risks, making investment and loans feasible. The power
utility, ATI, the investor, and lenders work together in the event that risks
begin to arise during PPA term
Case Example #2:
Govt. Power Project
A power utility wants to build its own greenfield power plant, hiring a foreign
EPC company to build the turnkey plant and transfer upon completion
Power utility has some cash, needs long-term loans from foreign lenders to
finance balance of engineering, procurement & construction contract costs
Foreign lenders are willing to finance the EPC contract, but have some
concern about the power utility’s ability to repay the loans
ATI agrees to:
● provide public obligor non-payment insurance to the foreign lenders,
based on the power utility’s financial capacity
ATI, the lenders, the power utility and the Ministry of Finance work together
over the loan repayment term to avert non-payment issues
Case Example #3:
Infrastructure Retro-Fit
A power utility wants to enhance existing generation and transmission
infrastructure to improve efficiency and extend economic useful life
Workplan includes turbine major maintenance, control system
modernization, transmission line expansion, and spare parts
Power utility has some cash available, some foreign suppliers are willing to
provide credit terms, and foreign loans are needed to pay others
ATI agrees to provide:
● foreign suppliers with non-payment insurance on credit to power utility
● non-payment insurance to foreign lenders on the power utility’s loans
● cover to lenders that finance supplier credit needs using the power
utility’s receivables as collateral
ATI, the power utility and foreign parties work together to avoid credit issues
Benefits & Next Steps
How can Public Utilities Benefit from
ATI’s Support? ● ATI can support the growth and restructuring objectives of power utilities
● ATI can help as a source of information and expertise
● ATI can help to lower the cost of financing
● Power Utilities can benefit from an ATI partnership by engaging in regular
dialogue & starting the discussion early to:
help ATI identify priority projects so that it can focus on those projects
with the highest likelihood of success
help ATI with its due diligence needs in: 1) assessing individual
projects and sponsors, and 2) ensuring that ATI approaches are
aligned with strategic plans for the power sector
“In short, a close ATI/Power Utility partnership simply makes good
business sense.”
What Next?
Potential projects in the East African region:
a.Wind
b.Solar
c.Thermal Huge potential for more
d.Geothermal projects in these areas
e.Biomass
f. Hydro
g.Non-renewables
●Start discussions with ATI early. We can help negotiate
contracts, obtain loans at favorable rates, structure the
deal, etc. Ensures project is insurable and sound
●This process ultimately helps lower the cost of financing for
your project
Procedures & Costs
Three step application process:
1.Submit an insurance enquiry form
2.Once approved we issue a non-binding indication (NBI)
3.If terms and conditions are acceptable, client then submits the
application and ATI then underwrites the policy
Cost & Terms:
Political/Investment Risk
We price to risk assessed in a particular country
Trade Credit Insurance
Product Credit Terms Price Range
Whole Turnover Up to one year 0.4 – 1.5% of
insurable turnover
Single Obligor 1 – 5 years 1.8 – 3.5% of
exposure
ATI Headquarters
Kenya-Re Towers | Upperhill, Nairobi
ATI Tanzania Office
1st Floor, Private Sector Hs | Mwaya Road
Dar es Salaam
ATI Uganda Office
Workers House, 9th Floor
Southern Wing Plot 1 Pilkington Road | Kampala
ATI Zambia Office
Kwacha House Annex | Cairo Road
Lusaka
ATI Contacts
Africa’s Export
Credit Agency
www.ati-aca.org
