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Funding mega dollar projects utilizing bank guarantees (BG's) or other bank instruments 

Another option for 'Funding Mega Dollar Projects' is to use Bank Guarantees (BG's), or similar Bank Instruments.

This is an excellent option for 3rd world countries.  The government has a prime 'Bank' issue the Bank Guarantee to the Developer who was awarded the 'Project'.  This can be for any type of project:

  • B.O.T. - Build, Operate, and Transfer        

  • B.O.O. - Build, Operate, and Own    

  • Environmental Project    

  • Construction Project        

  • Hospital or Medical Facility         

  • ManufacEagleTraders.comg Facility        

  • Development Project       

  • Quasi Government Project        

  • Government Project              

  • Nature and Natural Preservation Projects - Save the Rain Forest, Plant Tree Farms, etc.        

  • Other

In principal this is how it works

The client may composite the value of the 'Contract' into a series of transactions utilizing Bank Guarantees (BG's) or similar Bank Instruments, whereby they (the client) do large project amounts ranging in increments of 20 to 100 million US Dollars utilizing corresponding Bank Instrument amounts.

However, the cash value (actual conversion amount) of each BG  or Bank Instrument must be paid in full at time of every transaction for each of these larger projects.  This is done in phases (stages over a period of time) during a predetermined schedule or life of the project.

The basic criteria would be a project or a series of projects rolled into one entity with a contract value of 200 million US dollars and above.


Since projects are generally time phased for payments, the first payment on a 200 million US Dollar project could be 20m.  The client would have issued a Bank Instrument such as a BG for 20m.  The 'Bank Instrument', such as a BG, is then converted to real working dollars based on the market value of the instrument at the time.

Recommended further reading:
International construction loans

Interesting project financing links
Venture Funding Procedure