World Bank launches $20b annual guarantee platform

The World Bank Group has announced that it has launched a new one-stop-shop loan and investment guarantee platform with a target to triple its global provision of guarantees and risk insurance to $20 billion annually by 2030.

This ambitious plan aims to bolster investment in high-risk regions, such as Africa and Ukraine, by integrating the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA).

Hiroshi Matano, MIGA’s Executive Vice President, highlighted that the initiative would support innovative financing solutions, including carbon credits, debt-for-nature swaps, and off-grid energy projects in remote African areas.

The new platform will also attract private sector investors to provide “take-out” financing, replacing traditional loans from the World Bank or IFC, thereby expanding overall lending capacity.

The World Bank Group issued nearly $6.5 billion in guarantees last year and expects to provide about $10 billion this year. With this new initiative, the aim is to expand MIGA’s balance sheet significantly, which is currently at $30 billion. Matano said that if demand surpasses expectations, the organisation is prepared to exceed the $20 billion target.

This move represents the first significant outcome from the Private Sector Investment Lab, a group established by World Bank President Ajay Banga to attract private capital to clean energy and other projects in developing countries.

The new platform aims to simplify guarantee offerings into a unified, comprehensive menu, streamlining the process for clients to select the most appropriate financial instruments.

Attribution: Reuters.