Case Study
India's largest state bank refinances an IBRD loan via private lenders, with MIGA guarantee
October 30, 2024
A team comprising MIGA, Energy GP and WB Treasury approached SBI with the proposal of refinancing a portion of IBRD’s existing $500 million loan with a MIGA guarantee. However, SBI would have to pay a prepayment premium of $8.5M2 to IBRD, making the transaction not financially viable for them.
A team comprising MIGA, Energy GP and WB Treasury approached SBI with the proposal of refinancing a portion of IBRD’s existing $500 million loan with a MIGA guarantee. However, SBI would have to pay a prepayment premium of $8.5M2 to IBRD, making the transaction not financially viable for them.
PROJECT HIGHLIGHTS
- A pioneering refinancing mechanism by the World Bank Group enabled India's largest state-owned bank, the State Bank of India (SBI), to mobilize private capital for development.
- SBI refinanced a $200 million IBRD loan with commercial lenders, backed by a MIGA guarantee, after the completion of the project.
- This “One World Bank Group Approach”: 1) mobilized private capital by derisking investor funds, 2) increased lending capacity for World Bank financing to India, 3) released IBRD resources for other projects and 4) set a scalable precedent for future refinancing initiatives in the renewable energy sector.