Generally speaking, sovereign guarantee is issued for project financing and loans for government projects sucha as power project, railway, port, telecommunication and other big infrastructure projects.

 

But for private projects, the sovereign guarrantee is really a problem.  The federal government administration will evlaute projects for whether issuing sovereign guarantee or not.  So if an administration's term is approaching its end, "no sovereign guarantee were issued to the private sector, but they did on the government sector.  It is the judgement of the President or Prime Minister to issue or not issue sovereign guarantee on the private sector. He/she can do it (issue) provided that the project is classified as sort of to solve an impending crisis, for example power crisis, water supply crisis, etc. Now, in the world many newly elected government may issue guarantee to power projects which need utmost attention to solve power crisis that is foreseen to happen in the immediate future.

 

Usually the sovereign guarantee will be issued by the Ministry of Finance, and bank guarantee will be issued by reputable banks which are accepted by our Chinese lending banks.