MIGA’s $6.5bn fast-track facility to help private investors tackle COVID-19
The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, has launched 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 mobilise 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 $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 $357 million in guarantees to support the construction, installation and operation of the $1.3 billion Ghorasal Polash Urea Fertiliser plant.
Interested parties are encouraged to submit inquiries at https://www.miga.org/apply
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