World Bank Group Guarantee Platform Goes Live

The World Bank Group (WBG) guarantee platform has been launched, marking a significant milestone in development financing.

What is the World Bank Group Guarantee Platform?

1. A one-stop-shop for all WBG guarantee business, providing the best guarantee solutions for clients to meet project needs and development priorities.
2. Housed at the Multilateral Investment Guarantee Agency (MIGA), the platform brings together products and experts from the World Bank, International Finance Corporation (IFC), and MIGA for simplicity, efficiency, and speed.
3. Aims to boost WBG annual guarantee issuance to $20 billion by 2030.

Key Features of the Platform:

1. Provides three types of coverages:
   1. Credit guarantees for loans to the public or private sector.
   2. Trade finance guarantees for trade finance projects involving public entities.
   3. Political risk insurance against non-commercial risks for private sector projects or public-private partnerships.
2. Offers a simplified, market-friendly menu of guarantee options for clients.
3. Streamlines processes, removes redundancies, and provides greater accessibility by de-risking investments in developing countries.
4. Introduces a scalable model, prioritizing high-impact projects, thereby optimizing resource allocation, and facilitating growth.

Significance of the Platform:

1. Revolutionizes the landscape of development financing, revitalizing the role of guarantees in development.
2. Aligns with the overall effort to mobilize private capital for development.
3. Complements the World Bank's country-level support in creating an environment supportive to private capital mobilization.
4. Collaborates with IFC's advisory and financial instruments to enhance private sector engagement with country clients.
5. Enhances the WBG's ability to support development projects, particularly in fragile and conflict-affected countries.

Goals and Objectives:

1. To catalyze foreign investment in emerging markets and developing economies.
2. To drive impactful solutions across diverse sectors, including energy access, pandemic preparedness, and climate action.
3. To promote sustainable development and inclusive growth worldwide.
4. To support the achievement of the United Nations' Sustainable Development Goals (SDGs).

Background:

1. The G20 Independent Expert Group's report on Strengthening Multilateral Development Banks called for expanded use of guarantees to mitigate risk and unlock private finance.
2. The Private Sector Investment Lab, launched by the WBG in June 2023, provided specific guidance on using guarantee instruments.
3. The WBG's recent evolution process prioritized enabling and catalyzing private capital flows, underscoring the effectiveness of guarantees.

Statistics:

1. In fiscal year 2024, the World Bank Group issued approximately $10.3 billion in new guarantees using products that will be part of the platform.
   1. Breakdown: $8.2 billion from MIGA, $1.4 billion from IFC, and nearly $700 million from the World Bank.

Quotes:

• "MIGA is excited to host and begin the operationalization of the guarantee platform. This marks a pivotal moment in our commitment to sustainable economic development." - Hiroshi Matano, MIGA Executive Vice President.

About the World Bank:

1. An international financial institution that provides loans and grants to the governments of low and middle-income/developing countries for the purpose of pursuing capital projects.
2. Established along with the IMF at the 1944 Bretton Woods Conference.

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