Advance Payment Guarantee or Advance Payment Bond is an instrument issued by Wema Bank on behalf of its customer to secure upfront payments to them by third parties for jobs awarded to, but not yet executed by, the contractor
An Advance Payment Guarantee is issued to secure the release of advance payment (mobilisation) received on a contract. It is intended to bind the supplier (the bank’s customer) to use the advance payment for the purpose stated in the contract between the customer and the Principal.
The guarantee is payable on demand and contains optional provision for the value of the guarantee to reduce interim payments made under the contract. The advance payment guarantee should only become effective once the advance payment has been received.
APG becomes effective upon receipt of funds/mobilisation from the Contractee.
The bank's maximum liability on APG is limited to actual funds received in its position. Usually 15% of the contract sum (public sector),
Contractors, Suppliers etc.
Tangible collaterals (where applicable)