WASHINGTON DC, April 7, 2020 – The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, is launching today a $6.5 billion fast-track facility to support private sector investors and lenders tackling the COVID-19 pandemic in low- and middle-income countries. The Facility redirects MIGA’s capacity toward the purchase of urgent medical equipment, provides working capital for small and medium enterprises, corporates and individuals, and supports short-term funding needs of governments.
“Private sector investors and lenders have a crucial role to play in helping meet the most pressing challenges arising from the coronavirus pandemic,” MIGA Executive Vice President Hiroshi Matano said. “At a time when public financing in many countries is stretched thin, we stand ready to work quickly and at scale with investors and governments to mobilize global financing and expertise.”
The Facility, which allows for issuance of guarantees using streamlined and expedited procedures, aims to meet coronavirus-related challenges through four mechanisms:
- Credit enhancement for governments and their agencies to borrow on non-concessional terms to purchase urgent medical equipment, protective gear, medicines, and services.
- De-risking solutions for commercial banks and financial institutions so they continue to provide lending through their subsidiaries in low- and middle-income countries.
- Credit enhancement for governments and their agencies seeking to access the credit markets for funding economic recovery projects and programs in a liquidity-constrained environment.
- Supporting trade finance in partnership with IFC to extend cover for local banks in low income and fragile countries to ensure the continued flow of goods through global supply chains.
The impact of the crisis on emerging markets and developing economies is expected to be particularly severe. Most immediately, there is an unmet demand for personal protective equipment and medical supplies and a need to provide fiscal stimulus to help local economies. In parallel, these economies are confronting higher levels of sovereign debt, tighter financing conditions in the banking system, and a potential drop in their revenue bases.
MIGA has had over thirty years of experience working with investors and governments to help meet some of the most pressing needs in low- and middle-income countries. Earlier this year, the Agency issued US$497 million in guarantees to South Africa’s Absa Group Ltd. to help expand financing across seven countries in Sub-Saharan Africa. In Bangladesh, MIGA issued US$357 million in guarantees to support the construction, installation and operation of the US$1.3 billion Ghorasal Polash Urea Fertilizer plant.
The MIGA Fast-Track Facility is being issued alongside a package announced by the World Bank and IFC. The World Bank Group is taking broad, fast action to help developing countries strengthen their pandemic response, increase disease surveillance, improve public health interventions, and help the private sector continue to operate and sustain jobs. It is deploying up to $160 billion in financial support over the next 15 months to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery.
MIGA remains committed to supporting clients and partners, with work arrangements being adapted to accommodate social distancing and remote working.
Interested parties are encouraged to submit inquiries at miga.org/apply
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.
Since its creation, MIGA has issued over US$55 billion in guarantees across 116 developing countries.
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