South Africa: Capital Adequacy/BASEL

When Ethiopia began filling the Grand Ethiopian Renaissance Dam in 2020, it was not merely generating hydroelectric power; it was redirecting a continental resource to transform its economic future.

The good news for the beneficiary of an on-demand bond or guarantee, also known as a performance bond, advance payment bonds, tender bond and letter of credit or irreversible documentary credit, is that the surety’s liability is triggered more often than not upon the mere demand or call by the creditor, provided the call is expressed in accordance with any requirements of form which are to be inferred from the wording of the bond.