ENERDAS GROUP
In the long and tedious process of awarding public contracts in Benin, as in many other African countries, there are many SMEs which fall by the wayside.
It is quite difficult for them to conform to the financial restrictions in the Specifications. A huge shortfall which is nevertheless beginning to dissipate thanks to the expertise provided by guarantee institutions, such as ETC (Export Trading Cooperation).
Actively contributing to development projects locally with high added value for Beninese populations in rural areas, is the ambition displayed more than ever by small and medium-sized businesses in Benin. However, this deliberate choice comes up against the insufficiency of their financial resources. As a result, most of them cannot participate in call for tenders which generally require the prior addition of a Surety Bond. A crippling requirement which hampers the future of many of these companies, forced despite themselves to sometimes shed their societal responsibilities: creating jobs to better fight against poverty.
Aware of this sad reality, the Beninese and the American governments signed an agreement in 2015 intended to reduce poverty in Benin. To help Cotonou meet this challenge, the American government released 375 million dollars in subsidies which were added to the 28 million contributed by the Benin Republic. Huge amounts which served as a launching pad for the Millenium Challenge Account Benin ll. An initiative by the Beninese government which aims to finance projects mainly relating to electricity.
In the wake of Millennium Challenge Account Benin II, several calls for tenders were launched. They include the installation of solar pumping stations, the construction of storage tank supports and fountain hydrants in 60 Beninese villages. Two flagship projects are at the heart of these public contracts: the installation of photovoltaic generators to produce electrical energy for the irrigation of farms and the distribution of solar lighting kits in rural households; two projects whose execution is now the responsibility of the SME ENERDAS GROUP who was able to fulfill its surety bond.
ENERDAS GROUP has therefore the mission of carrying out the aforementioned work, particularly in the municipalities of Allada, Zogbodomey et Djidja. The particularity of this company founded in 1985 by brilliant engineers trained at the Polytechnic School of Montreal, in Canada, is to benefit from ETC Surety Bond. A condition which allowed it to win the public tenders mentioned above.
And to adjust this financing instrument to African SMEs in general and Beninese in particular, ETC (Export Trading Cooperation), guarantee institution specialized in the technical-financial management of international trade and investments, active member of the SWIFT network, deploys its Surety Bond in several forms: called bid bond during the call for tender, which allows the company to bid. In the event of an award, the surety bond may also take the form of a restitution of deposit bond or advance payment bond, implemented to enable the company to finance the start of the work. The performance bond allows the contractor to recover a certain percentage of the contract price. Upon ending of the work, it is the security bond which allows the company to be paid in full, without having to withhold sums from the project owner to cover possible defects during delivery of the site.
So many mechanisms and facilities which provide security to project owners, help banks to finance projects, and give credibility to SMEs having subscribed to this surety bond. Enough to make ETC a safe and reliable institution in the eyes of the European Securites and Markets Authority and also to be rated A3- by a European Rating agency “Modefinance”. A rating that says a lot about the success story of ETC which continues to build its reputation based on excellence, and a rigor to which SMEs wishing to be popular in Benin are willing to adhere during calls for tenders.
