World Bank Launches Program to Boost Guarantees to $20 Billion

(Bloomberg) -- The World Bank launched a new program that aims to boost investment guarantees to $20 billion by the end of the decade, as it seeks to mobilize trillions of dollars in investments to finance development and climate projects in poor countries.

Most Read from Bloomberg

• Democrats Weigh Mid-July Vote to Formally Tap Biden as Nominee

• Trump Immunity Ruling Means Any Trial Before Election Unlikely

• Beryl Becomes Earliest Ever Category 5 Hurricane in Atlantic

• ‘Upflation’ Is the Latest Retail Trend Driving Up Prices for US Consumers

• Trump Isn't Going to Like the Supreme Court's Immunity Decision

The platform will be hosted by the Washington-based lender’s Multilateral Investment Guarantee Agency, it said in a statement Monday, and will tap expertise from the bank’s International Finance Corp, which invests in the private sector.

Since taking over the World Bank last year, President Ajay Banga has focused on mobilizing capital from the private sector to magnify the impact of its development lending, including for climate change adaptation and the transition to clean energy.

The platform will provide three kinds of coverage, according to the statement. They are credit guarantees for loans to the public sector or businesses; trade finance guarantees for projects involving public companies; and political risk insurance against non-commercial risks for private projects or public-private partnerships.

The program “can be a strong tool to help development” and provides “a unique bridge between the public sector and private sector,” Hiroshi Matano, head of the World Bank’s guarantee agency, known as MIGA, said in an interview.

Matano added that the new platform will advance World Bank goals that include providing electricity to 300 million people in Africa by 2030; advancing the transition to renewable energy sources like solar and wind in countries like India and Indonesia; and providing risk insurance for carbon credits products.

The World Bank earlier this year said it had set a goal of tripling its guarantees business to $20 billion by the end of the decade. New figures released Monday showed the group had issued $10.3 billion in fiscal year 2024.

(Updates to add latest data on guarantee issuance in final paragraph. An earlier version of this story was corrected to show World Bank’s change in description of coverage to “credit guarantees” in fourth paragraph.)

Most Read from Bloomberg Businessweek

• The Fried Chicken Sandwich Wars Are More Cutthroat Than Ever Before

• Online Shopping Warehouses Are Reshaping Rural America

• Japan’s Tiny Kei-Trucks Have a Cult Following in the US, and Some States Are Pushing Back

• RTO Mandates Are Killing the Euphoric Work-Life Balance Some Moms Found

• The FBI’s Star Cooperator May Have Been Running New Scams All Along

©2024 Bloomberg L.P.