March 04, (THE WILL)- The World Bank Group has announced a major overhaul to its guarantee business that will deliver simplicity, improved access, and faster execution through a new, convenient marketplace. The new reforms are critical to achieving the goal of tripling annual guarantee issuance to $20 billion by 2030.
The Private Sector Investment Lab, earlier launched by the World Bank Group in June 2023, was created to identify barriers and potential solutions to renewable energy investment. Political risk insurance emerged as a key area of interest among the group, which also raised issues with accessibility. The recent G20 Independent Expert Group report on Strengthening Multilateral Development Banks also called for an expanded use of guarantees to mitigate risk and catalyze private finance.
Currently, the World Bank Group offers 20 guarantee solutions spread across the institution. Each comes with different processes, rules, and standards. Ultimately, this holds back their potential and impedes client access.
The overhauled approach, the first significant change in 15 years, will consist of six concrete updates:
Condensed Structure: Moving all of guarantee experts from across the World Bank Group under one roof, providing a seamless experience for clients and easier access to the full suite of guarantees.
Simplified and Comprehensive Product Menu: Compiling all World Bank Group guarantees in a single menu, allowing clients to easily identify and select the guarantee instrument that best suits their individual needs.
Streamlined Process: Launching a common approach for all guarantee reviews and removing redundant processes, giving transparency and certainty to our clients across our guarantee process, delivering an improved client experience.
Greater Accessibility: Investing in a more accessible client experience by growing our guarantee teams and training staff worldwide, providing private sector and country clients with easy access to guarantees from anywhere in the world.
Scale: Applying a risk-weighted approach that focuses resources on high-impact projects and portfolios of projects, reducing duplicative risk analysis and freeing up capacity to tackle more complex challenges.
Innovative New Tools: Offering new and innovative guarantee products that will enable the private sector to get more involved in solving the development challenges of today.
The overhaul and one-stop-shop will be available to all World Bank Group clients on July 1, 2024.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
