Performance Bond

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Performance bond is an instrument issued by the bank on behalf of its customer guaranteeing the fulfilment of a contract awarded by a third party

A performance bond is a surety bond issued by an insurance company or a bank to guarantee satisfactory completion of a project by a contractor (customer). A job requiring a payment and performance bond will usually require a bid bond, prior to bidding for the job. When the job is awarded to the winning bidder, a payment and performance bond will then be required as a security for job completion. Usually 10% of the contract sum (public sector).

Performance risk is mitigated by an adequate analysis of a customer's track record of prior successfully executed jobs; analysis of technical partner’s (if any) competence, as well as the appointment of a Project Manager by the Bank.

  •   Contractors, Suppliers etc.

Conditions precedent:

  1. Request Letter
  2. Accepted offer letter
  3. Board resolution
  4. Copies of contract award/agreement
  5. Satisfactory credit checks
  6. Payment of upfront fees
  7. Appointment of project manager (where applicable)
  8. Evidence of similar contract successfully executed in the past

Provision of Counter Indemnity from Insurance Company or 100% cash cover or Legal Mortgage on property (where applicable)

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October 24, 2016
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