David Lowder
WASHINGTON (Reuters) – The World Bank Group said on Wednesday it would consolidate its lending and investment guarantee structure as part of its goal to triple its annual guarantees to $20 billion by 2030 to boost private investment in renewable energy in developing countries.
The reforms, announced on the sidelines of the G20 financial leaders meeting in Sao Paulo, Brazil, will bring together all assurance experts from all World Bank business units onto a single platform.
The bank said the changes, which will begin on July 1, will ensure “a seamless customer experience and easier access to a full range of guarantees.”
The World Bank Group currently guarantees approximately $6.8 billion in loans and investment contracts annually through its business units, including the Multilateral Investment Guarantee Agency (MIGA), the International Private Sector Finance Corporation, and its main lending arm, the International Bank for Reconstruction. and development.
Guarantees include insurance against credit risks, political risks, breach of contracts, foreign exchange restrictions and other obstacles to private investment in developing countries. Expanding those guarantees is a key component of the bank’s efforts to expand its balance sheet and increase lending by more than $150 billion over 10 years to help fight climate change and other global crises.
The changes announced Wednesday are the first tangible results of a group of private sector leaders convened last year by World Bank President Ajay Banga, called the Private Sector Investment Lab, to develop ideas for attracting more private capital to clean energy and other investments. . in developing countries.
The World Bank said the plan calls for simplifying warranty products into a single comprehensive menu that will allow clients to easily identify and select the instrument that best suits their needs. The new common approach will standardize assurance reviews, replacing the patchwork of different processes, rules and standards that currently “hold back their potential and make it difficult for customers to access,” the bank said.
“We need the resources and ingenuity of the private sector to solve big global problems,” Banga said in a statement. “By consolidating our offerings, simplifying processes and expanding access, we are providing faster and easier access to assurance for businesses.”