The World Bank has unveiled a plan to overhaul how it provides guarantees on its loan and investment contracts to offer simpler, faster, and easier access to guarantees in a bid to attract more private sector investment into emerging markets for climate and development.
Announced by bank President Ajay Banga on the sidelines of the Group of 20 major economies’ finance leaders meeting in Brazil on Wednesday, the new guarantee platform is part of the bank’s pledge to triple its annual guarantee issuance — currently around $7 billion a year — to $20 billion by 2030.
The institution offers a range of guarantees, mainly to would-be foreign investors, to de-risk projects that would otherwise be too risky to attract private financing. The bank also offers guarantees to sovereign governments to make it easier for them to borrow from financial markets.