World Bank to Double Financial Guarantees to $20 Billion by 2030

The World Bank’s member institutions this week began using a single platform to issue guarantees to investors, aiming to double that amount to $20 billion a year by the end of the decade.

“The platform, powered by the Multilateral Investment Guarantee Agency (MIGA), brings together products and expertise from the World Bank, the International Finance Corporation (IFC) and MIGA for simplicity, efficiency and speed, with the goal of increasing the World Bank Group’s emissions by up to $20 billion. [18,4 mil milhões de euros] in 2030,” the report says.

Adding guarantees to investments is part of a set of measures the Group is taking to streamline procedures and improve the efficiency of development finance, in line with the new strategy endorsed by shareholders and the G20 since Ajay Banga took office. Multilateral development banks are getting bigger, better and bolder.

The platform “will serve as a single point of contact for all World Bank Group guarantees, ensuring the best solution for clients based on project needs and development priorities,” presented as a menu with several options.

The World Bank Group said in a statement that there would be three types of coverage: credit guarantees for loans to the public or private sector, guarantees for commercial financing projects involving public entities, and political and commercial risk insurance for projects in the private sector or in public-private partnerships.

“The platform’s transformative solution is expected to revolutionize development finance by revitalizing the role of collateral in development and aligning with global efforts to mobilize private capital for development, and complementing the Bank’s country-level support in creating conditions conducive to mobilizing private capital,” the text also says.

The new platform for issuing guarantees to investors will prioritize high-impact projects, optimizing resource allocation and promoting growth in host countries, the World Bank further explains.

In fiscal year 2024, which ended July 1, the World Bank Group issued more than $10 billion (€9.3 billion) in new guarantees using products that will be part of the new platform: $8.2 billion (€7.5 billion) from MIGA, $1.4 billion (€1.2 billion) from IFC and nearly $700 million from the World Bank, the statement said.