Notice

USAID Development Credit Authority

Status
USAID, Worldwide, March 2001 – September 2005

Project Summary

TCGI provides technical assistance and support to the USAID Office of Development Credit (ODC), which manages the Development Credit Authority (DCA). DCA is USAID’s primary credit program, supporting development initiatives globally through the use of loan and bond guarantees. The credit program gives USAID Missions the ability to issue partial guarantees to private lenders covering up to 50 percent of risk on loans for projects that advance Mission strategic objectives. Services provided by TCGI to ODC include: policy and planning, project development, credit risk analysis, monitoring, and communications support.

Policy and Planning

As an integrated member of the ODC staff, TCGI has been active in assisting ODC in policy formulation and strategic plan development. We have played an active role in developing and revising the Operations Manual, Financial Viability Analysis guidebook, and the Credit Assessment Handbook. Our planning work has included market studies and research papers to facilitate entry into new markets and sectors.

Project Development

New business and project development represent the core of TCGI’s work with ODC. We serve as the primary economic and financial advisers to DCA in evaluating and structuring new deals. TCGI works with Missions and NGOs around the world in packaging deals that will meet DCA requirements for development impact, economic rationale, and financial viability. Our more innovative deal structures have included: pooled municipal bond financing, social franchise financing, private-public partnership cooperation, and global microfinance lending.

Credit Risk Analysis

On occasion, TCGI has provided credit risk analysis support for ODC for deals that we have not structured in the project development phase. We have evaluated borrowers and lenders on their credit worthiness and helped restructuring deals to manage the agency’s credit risk. The company, in fact, was in integral part in establishing credit risk policy for DCA, which resulted in publication of the Credit Assessment Handbook. In addition, we play in an active role in risk premium re-estimates given our monitoring responsibilities. The firm has assisted ODC in evaluating and monitoring the cost of the DCA program worldwide.

Monitoring

TCGI works extensively with ODC in monitoring the DCA program worldwide. We provide backstopping for monitoring the performance of guarantees, processing of claims, tracking of payments, and general managing the ODC database. Our monitoring role will grow as USAID, DevIS, and TCGI are implementing a new Internet-based database system to track new guarantees. In addition to providing backstopping support, the company has also been active in making biennial portfolio reviews on behalf of USAID to ensure the guarantees are being properly utilized.

Communications Support

We also provide extensive communications support to ODC. We have taken a lead role in developing many ODC publications, workshops, and training sessions. Our publications have included numerous DCA brochures, operation and instruction guides, annual reports, portfolio reports, and presentations. We also assist the office in organizing and hosting seminars and training sessions for Missions, contractors, and other interested parties in the US and elsewhere.

Links:

TCGI DCA Project Experience

USAID Office of Development Credit