Non Honoring of Sovereign Financial Obligation insurance policy

Protects lenders against losses resulting from the failure of an Arab sovereign or sub-sovereign entity to honour its financial obligation. This includes the obligations of a state-owned enterprise or a public/private joint venture, guaranteed by the government. Since NHSFO is Basel II compliant, it allows lenders to receive capital relief and to continue funding projects in DHAMAN’s member countries.

NHSFO insurance policy is available for tenors of up to 15-20 years. The compensation rate stands for 95% of principal and interest.

Insured Risks

Default of payment

failure of the governing Authority to pay the Sovereign Financial Obligation

Eligibility

Eligible projects

Infrastructure and other productive investments implemented by public sector entities in Arab member countries.

Eligible parties

Lenders from a country other than the project host country (Arab country in which the project is to be financed).

Procedure

1

NHSFO insurance Application

The Loan provider submits a free of charge Insurance Application

2

Dhaman provides the applicant with a non-binding indication detailing the scope of cover and the pricing

Non-Binding Insurance Quotation

3

Host country approval

Obtaining the host country’s approval is necessary for Dhaman to issue the insurance policy

4

“Dhaman” provides the applicant with the insurance terms and conditions and policy is signed

Issuance of the Insurance Contract

5

Insurance Application

Before the investment is committed, the applicant submits a free of charge Preliminary Insurance Application. Dhaman provides the applicant with a non-binding indication detailing the scope of cover and the pricing. Once the investment and financing plans are established, a final application for which a fee is charged is submitted along with the project documentation.

End

Contact Us

Nizar Najem
Head of Investment Guarantee Unit

Phone

+965 24959536 (Direct)

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