¶¶Òõ¶ÌÊÓƵ

The Bank Guarantee By Government is a critical financial instrument in South African public finance, commonly used to support major development initiatives, infrastructure projects, and strategic investments. This document type is specifically designed to comply with South African legislation, particularly the Public Finance Management Act (PFMA) and banking regulations. It is typically employed when government support is needed to secure financing or when state-owned enterprises require backing for their obligations. The guarantee can be issued by various levels of government, subject to National Treasury approval, and must include specific provisions regarding the guarantee amount, duration, conditions for calling, and compliance with public finance requirements. These guarantees play a vital role in facilitating public-private partnerships and enabling strategic projects that contribute to national development objectives.

1. Parties: Identification of the Government department/entity providing the guarantee, the beneficiary bank, and the principal debtor

2. Background: Context of the guarantee, including reference to the underlying transaction or obligation being guaranteed

3. Definitions: Definitions of key terms used in the guarantee, including 'Guaranteed Amount', 'Guarantee Period', and specific terms related to the underlying obligation

4. Guarantee: Core guarantee provision, including the specific obligations being guaranteed and maximum liability amount

5. Duration: Term of the guarantee, including commencement date and expiry conditions

6. Payment Obligations: Specific terms regarding when and how payments under the guarantee will be made

7. Demand Procedure: Process and requirements for making a valid demand under the guarantee

8. Representations and Warranties: Government's representations regarding its authority to issue the guarantee and compliance with relevant laws

9. Compliance with PFMA: Specific provisions ensuring compliance with Public Finance Management Act requirements

10. Governing Law and Jurisdiction: Specification of South African law as governing law and jurisdiction for disputes