Escrow Project Funding Fiduciary Services

Independant 3rd Party secure Escrow Trading Fiduciary service protecting both the Project Funder & the Project Owner

Bluestone Escrow services partner SA Guarantee Ltd (Seychelles) which has an Offshore Fiduciary ESCROW Account with Bentley Legal in HSBC London & Mauritius, which enables Bluestone Service Group (BSG) to provide ESCROW Project Funding Fiduciary Services to BSG's client base.

HSBC London & Mauritius Escrow Accounts can deal with:

  • Complex structures

  • Very large funds being SWIFT in and out of the account

  • Certain types of financial instruments

Whats is an Escrow account?

Put simply, an escrow account is a bank account with defined conditions for the release of funds. An escrow agent SA Guarantees (Bentley Legal) is appointed by the employer and contractor to hold a sum of money on trust.

Note:  SA Guarantee Ltd (Seychelles) is a registered Cell Captive with Mutual & Federal Risk Financing Limited

Mutual & Federal Risk Financing Limited is a registered Insurance Company in South Africa.

Structure:

  • Mutual & Federal Risk Financing Limited is 100% owned subsidiary of Old Mutual Insure, with Old Mutual Insure being a 100% owned subsidiary of Old Mutual Group

  • Fitch Rating: AAA with (zar) stable outlook

Escrow Project Funding Services Challenges and the Market

Challenges in delivering infrastructure projects

Despite several high profile attempts to reform the industry, unfair payment practices and the risk of insolvency continue to present significant issues for those involved in delivering infrastructure projects, where main contractors routinely outsource all work to supply chains, while employers are often SPVs with limited assets

The Solution

The BSG/SAG Escrow Project Funding Services solution using HSBC escrow accounts and project bank accounts is used to mitigate the these risks. 

Ideal for in country or cross border mid-large projects with a min $15Mn project value in Africa or rest of the world, based around project milestone funding.

Supporting Products

  • Advance Payment Guarantees

  • Performance Bonds

  • Deferred Payment Guarantees

  • Custom and Excise Bonds

  • Logistic Guarantees

  • Bid and Retention Bonds

  • Fuel Guarantees

How it works (the procedures)

The Project Funder

  1. The Project Funder and Project Owner conclude Funding and ESCROW Agreements which includes use of SA Guarantees ESCROW Services and agreed milestone payments and supporting buyers independent verification representatives/agencies (Engineers, Quality Surveyers etc)

  2. The Project Funder deposits the full contract project price into the HSBC US$/EURO Escrow Account

  3. An Advance Payment Guarantee is issued to the Project Funder and the Project Funder's Bank as security

  4. A Performance Bond is issued to the Project Funder.

  5. Escrow account agreement is signed

  6. Funds are only released against milestones being verified and attained with payment instructions signed by the Project Owner, the Project Funder and SA Guarantee as Escrow Agent

  7. Representative of the Project Funder sign progress certificate confirming the milestones. The representative can be a Quantity Surveyor, Bureau Veritas, SGS or similar


Benefits

  • Not subject to US$ shortages which frequently occur in Africa

  • Funds are retained in US$/EURO and only converted to local currency upon verification of a milestone

The Project Funder's benefits are;

  • The funds are protected and secured by guarantees and bonds from AAA+ rated Insurance Company

  • Independent Verification of milestones by Buyers representatives/agencies

The Project Owner's benefits are;

  • Knowledge that the full contract sum is in Escrow account and under control of reputable Insurance Company

  • US$ Shortages will not be a factor or result in delays

  • Can focus on project delivery at maximum efficiency and productivity

  • Milestone payments are received within 48 hours upon the completion of a milestone having been verified

BSG partner SAG's Clients

Bluestone Service Group

Cape Town, South Africa

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