- The World Bank Group aims to triple its guarantees and risk insurance to $20 billion annually by 2030, focusing on high-risk areas like Africa and Ukraine.
- The new platform, which integrates the World Bank, IFC, and MIGA, will support novel financing methods such as carbon credits, debt-for-nature swaps, and off-grid energy solutions.
- A comprehensive menu will simplify guarantee products, allow more accessible selection, and standardise review processes across the World Bank Group.
The World Bank Group launched a new loan and investment guarantee platform on Monday, July 1, 2024. This initiative aims to triple guarantees and risk insurance to $20 billion annually by 2030, focusing on high-risk regions such as Africa and Ukraine.
The platform merges efforts from the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). MIGA Executive Vice President Hiroshi Matano outlined that the new system will support innovative financing solutions like carbon credits, debt-for-nature swaps, and off-grid energy projects in remote African areas.
Matano noted that guarantees would attract private sector investment for “take-out” financing, replacing traditional World Bank or IFC loans. This shift will expand the World Bank Group’s overall lending capacity. He emphasised the potential for creative uses of guarantee products.
The World Bank Group currently provides about $6.5 billion in guarantees yearly, targeting $10 billion for this year. The new platform aims to reach $20 billion annually, significantly increasing MIGA’s current $30 billion balance sheet.
When asked if the annual target could exceed $20 billion, Matano cited World Bank President Ajay Banga’s ambitious vision and expressed a willingness to surpass the target if demand grows.
This development follows Banga’s formation of the Private Sector Investment Lab last year, which seeks to attract private capital for clean energy and development projects in emerging markets.
The new platform streamlines guarantee products into a comprehensive menu, allowing clients to select the best instruments for their needs. A standardised approach replaces the current processes, rules, and patchwork of standards.