World Bank to streamline loan, investment guarantees with $20 billion annual goal
By David Lawder
WASHINGTON (Reuters) -The World Bank Group said on Wednesday it would consolidate its loan and investment guarantee structure as part of its goal to triple its annual guarantees to $20 billion by 2030 to boost private renewable energy investments in developing countries.
The reforms, announced on the sidelines of a G20 finance leaders meeting in Sao Paulo, Brazil, would move all of the guarantee experts from across the World Bank's business units into a single platform.
The bank said the changes, to start on July 1, would provide «a seamless experience for clients and easier access to the full suite of guarantees.»
The World Bank Group currently guarantees about $6.8 billion worth of loans and investment contracts annually across its business units, including the Multilateral Investment Guarantee Agency (MIGA), the private-sector International Finance Corp and its main International Bank for Reconstruction and Development lending arm.
The guarantees include insurance for credit risks, political risks, breach of contract, currency restrictions and other impediments to private investment in developing countries. Expanding these guarantees is a key component of the bank's efforts to stretch its balance sheet and boost lending by more than $150 billion over 10 years to help fight climate change and other global crises.
The changes announced on Wednesday are the first tangible results from a group of private-sector investment executives assembled last year by World Bank President Ajay Banga, dubbed the Private Sector Investment Lab, to develop ideas to draw more private capital to clean energy and other investments in developing countries.
The World Bank said the plan called for simplifying guarantee products
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