By Dickson Pat
World Bank’s Multilateral Investment Guarantee Agency plans to more than double the annual guarantees it provides in Africa to $6.4 billion over the next three and a half years, as part of broader efforts to mobilise private capital into critical sectors across the continent.
According to a Reuters report published yesterday, the guarantees are expected to help unlock about $23 billion in private investment for projects spanning food security, energy infrastructure, debt swaps, trade finance and digital connectivity.
The move comes as multilateral lenders increasingly expand the use of guarantee instruments to de-risk investments and attract private sector participation across Africa.
The Multilateral Investment Guarantee Agency said the expanded guarantee programme would continue to support strategic sectors and strengthen economic resilience across African economies.
Managing Director Tsutomu Yamamoto said the scaled-up guarantees would play a “critical role” in attracting investment, create jobs and “ultimately help to build robust and stable economies”.
The agency said its guarantee instruments would include political risk insurance, credit enhancement facilities, debt swaps and broader portfolio guarantees across multiple countries.
The programme will continue targeting sectors such as energy grids, local banking systems, food security, trade finance and digital infrastructure.
The agency did not disclose its full project pipeline but noted that the expansion reflects growing demand for risk-sharing mechanisms in emerging markets.
The expansion follows the consolidation of guarantee operations under the World Bank Group nearly two years ago, a move aimed at scaling up private sector investment mobilisation.
MIGA has already supported the World Bank’s first debt swap transactions in Ivory Coast and Angola.
The agency has also backed food security programmes in Kenya and supported more than 100 energy-related projects across emerging markets.
Guarantee instruments have additionally supported lending operations in Ghana and Zambia.
The latest expansion reflects a broader shift within development finance institutions toward using guarantees to stretch limited public resources and crowd in private investment.
Guarantees help reduce investment risk in frontier and developing markets, making projects more attractive to private investors.
The instruments are increasingly being used to support sovereign debt restructuring, infrastructure financing and local banking systems.
Development finance institutions see guarantees as critical tools for mobilising long-term capital into sectors often viewed as too risky by commercial investors.
The Multilateral Investment Guarantee Agency is seeking to significantly expand its global guarantee operations over the next few years.
With major economies slashing aid budgets while seeking access to Africa’s mineral resources, multilateral lenders are increasingly using guarantees to de-risk investments and stretch funding.
MIGA’s broader goal is to boost the World Bank Group’s global guarantee issuance to $20 billion each year by 2030.
The Federal Government is engaging the World Bank for a fresh $1.25 billion loan under a proposed programme aimed at expanding access to finance, digital services, electricity, and supporting reforms in tax, trade and agriculture.
