Japan secures $1b portfolio guarantee with World Bank

Japan signed a $1 billion portfolio guarantee agreement to increase financing from the International Bank for Reconstruction and Development (IBRD) for projects addressing global challenges, as per a statement by the World Bank (WB).

Japan is at the forefront of supporting innovative financial tools to enhance the accessibility of WB financing. “By sharing risks, we can multiply our development impact,” stated WB President Ajay Banga.

The guarantee is part of a new Portfolio Guarantee Platform that leverages Japan’s $1 billion commitment to generate $6 billion in new funding over 10 years, the statement added.

The platform allows shareholders with high credit ratings to intervene if a borrower defaults on a loan from the International Bank for Reconstruction and Development (IBRD), a member of the WB.

Japan, along with 14 other countries, pledged commitments to new WB financial instruments, including hybrid capital. These commitments have the potential to increase WB lending by more than $72 billion over the next decade.

Attribution: The World Bank statement

Subediting: M. S. Salama