World Bank Group Launches New Guarantees Platform to Mobilize Private Sector Capital
The World Bank Group has unveiled a transformative new platform aimed at mobilizing private sector capital to address critical global challenges. The World Bank Group Guarantees platform is set to boost guarantee volumes to $20 billion by 2030, tackling issues such as climate change, conflict, and pandemics.
Developing countries require an average of $2.4 trillion annually to confront these challenges effectively. With bilateral donors and multilateral development banks unable to fully meet this need, the platform seeks to bridge the gap by attracting private investment.
The new platform, managed by the Multilateral Investment Guarantee Agency (MIGA), offers three primary products: credit guarantees for loans, political risk insurance for private sector projects and public-private partnerships, and trade finance guarantees for public sector risks.
This comprehensive approach aims to improve funding structures, balance and allocate risks, and create innovative partnerships.
President Ajay Banga’s Private Sector Investment Lab proposed increasing the World Bank Group’s guarantees work, leading to the launch of this new platform. The initiative reflects a strategic shift from traditional lending to leveraging private sector capital for sustainable development.
Notable successes include the use of political risk guarantees for Africa’s largest mini-grid in the Democratic Republic of Congo, which provides affordable electricity to over 28,000 households.
Similarly, MIGA’s guarantees supported Senegal’s first electric bus rapid transit system, expected to save 59,000 tons of carbon dioxide annually.
In fiscal year 2024, the World Bank Group issued approximately $10.3 billion in guarantees, with MIGA contributing $8.2 billion, IFC $1.4 billion, and the World Bank nearly $700 million. The new platform will build on this track record, aiming to leverage every dollar of operating capital efficiently.
