Project Description
Overview
Saverio Canepa supported an Italian company in entering the Saudi market operationally after winning several infrastructure contracts. The priority was to obtain the required performance guarantees quickly and in full compliance with international standards. The solution was structured with an international bank, prioritizing URDG 758, a clear documentary trail, and explicit instructions for claims and for delivering the original documents.
Client Profile
An Italian mid-cap with a domestic track record and a GCC pipeline. The risk profile required multi-year performance bonds in SAR, with amounts equal to 5% of the contract value and maturities aligned with the project timelines. The issuing bank needed to ensure regulatory reliability, an international format, and collection procedures easily understood by the Saudi beneficiary.
Approach
an international bank was selected as the issuer of the performance bonds, and a repeatable model was defined for multiple contracts: URDG 758 conditions, amounts in SAR, English-language wording, claims via a dedicated channel, and dispatch of the original hard copies to London with the bank’s written confirmation prior to enforceability. The guarantees include an identifying number, validity through 2028, and an explicit indication of 5% as a percentage of the contract; the wording requires bank verification of the beneficiary’s signature in case of demand. The process was completed by obtaining acknowledgment and approval letters from the Saudi authority and the local banking system, including operational instructions on contacts and delivery of the originals.
Results
Multiple performance guarantees were issued and delivered in line with international standards, fully accepted by the beneficiary and the local banking network. This enabled activities to start without delay and established a clear documentary framework for future contracts. The framework with an international bank is now reusable for advance and retention bonds, reducing cycle time and execution risk in upcoming tenders.
