MIGA Guarantees to Expand Lending in 8 African Countries
WASHINGTON, July 11, 2024 – The Multilateral Investment Guarantee Agency of the World Bank Group (MIGA) has issued 13 guarantees totaling $1.1 billion to Absa Group Ltd. of South Africa for its investments in its subsidiaries in Sub-Saharan Africa.
The project includes increased and new coverage to Absa in support of the Group’s general banking operations in its subsidiaries in Ghana, Kenya, Mauritius, Mozambique, Seychelles, Tanzania, Uganda, and Zambia. The guarantees will reduce ABSA’s risk-weighted assets and help it obtain regulatory capital relief at the consolidated group level which will be then reinvested into the host countries, by covering both mandatory and excess reserves for twelve and three years respectively. The guarantees will enable approximately $706 million of new loans, of which $489 million will finance climate projects and the remainder will support additional financing for small and medium enterprises.
"Our partnership with Absa Group exemplifies our commitment to supporting climate finance," said Hiroshi Matano, MIGA Executive Vice President. "This collaboration significantly boosts private credit provision in countries that are poor or affected by conflict and fragility.”
The project will contribute to the resilience of the banking sector by expanding lending capacity, and to the development of climate finance in the host countries by demonstrating the importance and viability of lending for climate-focused projects.
“The expanded agreement builds on a market-leading transaction between Absa and MIGA. It strengthens our partnership and advances our common goal of financing climate projects across Africa that enhance economic activity as well as sustainability,” said Deon Raju, Absa Group Finance Director.
The project is consistent with low-carbon and climate-resilient development pathways. In March 2023, Absa announced its long-term ambition to reach net zero by 2050 for Scope 1, 2 and 3 emissions. This commitment includes a target to reduce operational emissions by 51% by 2030, and sectoral targets on financed emissions for fossil fuels.
About Absa Group Ltd. of South Africa
Absa is a multinational banking and financial services conglomerate founded in 1991 and based in Johannesburg, South Africa. It is listed on the Johannesburg Stock Exchange, and offers personal and business banking, credit cards, corporate and investment banking and wealth and investment management. Operating in 10 Sub-Saharan African countries including South Africa, Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, Tanzania, Uganda and Zambia, the conglomerate maintains representative offices in Namibia and Nigeria and international offices in London and New York City, as well as a technology support office in Czechia. Absa has one of the largest financial franchises in Africa with total reported assets of about $10 billion as of September 2023.
About World Bank Group Guarantees
Initiated in 2024, World Bank Group Guarantees consolidates all guarantee products and experts from across the World Bank Group institutions at MIGA. It provides a simplified and comprehensive menu of guarantee solutions, enabling clients to select the instrument that best suits their needs. The platform streamlines processes, removes redundancies, and provides greater accessibility by de-risking investments in developing countries. Its goal is to boost the WBG’s annual guarantee issuance to $20 billion by 2030.
For more information about the guarantee platform, please visit: https://www.worldbank.org/wbgguarantees
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Contact:
In Washington: Elizabeth Howton, (202) 458-5922 or ehowton@worldbankgroup.org