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Project Brief

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.


Project name
Senegal Eurobond – Cross Currency Swap Arrangement
Project ID
Fiscal year
Guarantee holder
Standard Bank
Investor country
United Kingdom
Host country
Environmental category
Date SPG disclosed
July 01, 2011
Project Board date
September 08, 2011
Gross exposure
 $99.0 million
Project type
ESRS for Senegal Eurobond – Cross Currency Swap Arrangement

View Summary of Proposed Guarantee

On November 16, 2011, MIGA issued a guarantee of $99 million supporting a US dollar cross-currency swap arrangement between Standard Bank Plc (SB) and the government of Senegal. Senegal’s Ministry of Economy and Finance has entered into the swap with SB as a hedge against currency risk exposure related to the 10-year tenor, $500 million Senegal Eurobond issued in May 2011. The MIGA guarantee to SB provides coverage against non-honoring of sovereign financial obligations for a period of 10 years. Specifically, it insures against a failure by the government of Senegal to honor its obligation to make requisite payments under the swap.

The proceeds of the Eurobond will be used to finance new infrastructure projects as well as to redeem a $200 million bond issued in 2009. The Senegalese government expects to use these proceeds to finance a 19 kilometer extension of the Diamniadio Toll Road to the new Blaise Diagne International Airport project and critical energy sector investments under the government’s emergency energy sector strategy.

The projected development impacts of SB’s swap arrangement with the government are twofold. The direct benefits relate to the elimination of the currency mismatch risk the government of Senegal is exposed to under the Eurobond, which removes a potential source of instability to government finances; and improved terms on the swap, which contribute to a reduced cost of servicing the USD Eurobond.

Indirect benefits of the investment relate to the government of Senegal’s commitment to use the net proceeds from the Eurobond to finance the infrastructure projects noted above. The World Bank’s Country Assistance Strategy for Senegal emphasizes the need to consolidate public resources on infrastructure, road, and electricity networks.

The project is aligned with MIGA’s priorities of supporting investments in infrastructure and investments into countries eligible for concessional lending from the International Development Association.

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