Guarantees
Guarantees leveraged 19% of all private finance mobilized by developed country public finance between 2016 and 2022, and were among the preferred de-risking, or risk-sharing, tools for private investors. They have strong potential to mobilize more financing than loans for climate finance.
2030 Goals
- Increase the use of guarantees by MDBs and DFIs to mobilize greater climate finance, leveraging their effectiveness as a preferred de-risking instrument for the private sector and their historically low default rates.
- Adjust Official Development Assistance (ODA) accounting rules to view guarantees as fundamentally different than loans, supporting increased use.
StatusModerate progress
Moderate progress
- The World Bank announced its new guarantee platform, designed to drastically increase the ease & use of guarantee products across it's institutions.
- The Green Guarantees Group, a voluntary alliance of banks committed to improving guarantees, launched in 2024 with significant membership. The European Fund for Strategic Investments is also expanding their guarantee to address market gaps.
- Many EMDE banks have expressed an interest in increasing the use of guarantees from MDBs and other international sources, simplifying the implementation process, and supplying guarantees directly to MSMEs.
- In FY24, the Multilateral Investment Guarantee Agency (MIGA) issued a record USD 8.2 billion in new guarantees across 40 projects, with 75% of these initiatives identified as climate projects (representing 30% of total MIGA finance). The new MIGA platform went live on 1 July 2024 and aims to boost WBG annual guarantee issuance to USD 20 billion by 2030.
Relevant Actors & Audiences
Private FIs
The Green Guarantee Company, Guarant co., African Trade Insurance Agency, Africa Energy Guarantee Facility, Afreximbank, PIDG GuarantCo, Allianz, MEAG
Public FIs
NDBs, DFC, African Development Bank (AfDB), British International Investment, Japan International Cooperation Agency (JICA), US Development Finance Corporation, Japan Bank for International Cooperation, Sweden Investment Development Agency, African Energy Guarantee Facility
Multilateral Development Banks
MIGA, European Investment Bank (EIB), African Development Bank (AfDB), Inter-American Development Bank (IDB), European Bank for Reconstruction and Development (EBRD), World Bank , Asian Infrastructure Investment Bank (AIIB), International Finance Corporation , CAF, EFSD+, Guarantee Scheme
Governments
European Fund for Strategic Investments, UK Export Finance, Export-Import Bank of the United States, China Export & Credit Insurance Corporation, Swedish Export Credit Agency, Denmark State-Back Guarantee Program
Leading Countries and Alliances
United States of America, India, Netherlands , Brazil, Sweden, Denmark
Supportive Stakeholders
Green Guarantee Group, European Association of Guarantee Institutions, Berlin Global Dialogue, Euro-Mediterranean Guarantee Network (EMGN), Green Hydrogen Business Alliance
International Organizations
IRENA's ETAF
Milestones
The below events contain milestones related to De-Risking Private Investment (with Guarantees).
June
4th International Conference on Financing for Development
Milestones
Guarantees
In the first draft of the FfD4 Outcome document, there is an explicit call for the development of guarantee repositories, such as the World Bank Guarantee Platform. The document also promises a re-evaluation of credit rating methodologies and existing financial regulations to ensure that guarantees are fairly valued in analysis.
October
WBG/IMF Annual Meetings 2025
Milestones
Guarantees
- Triple Multilateral Investment Guarantee Agency risk-taking by 2025 with complete payment guarantees.
November
UNFCCC COP30
Milestones
Guarantees
The GGG aims to launch a Directory of Guarantees, which will provide key details to help borrowers search, compare guarantee products, understand eligibility requirements, and navigate the application process efficiently. In parallel, the GGG Expert Group will identify three lighthouse projects that embody the innovation needed to unlock additional capital through guarantees. These projects will be featured to inspire replication and demonstrate practical applications of guarantees in diverse contexts.
Resources
The below resources all pertain to the topic of De-Risking Private Investment (with Guarantees).
Blog: Ways to de-risk Climate Finance
Concessional Finance , Guarantees
This blog by Climate Policy Initiative highlights the need to lay out a comprehensive plan for de-risking climate finance with a domain-centric approach.
The European Fund for Strategic Investments
Concessional Finance , Guarantees
The EFSI aims to overcome current market failures by addressing market gaps and mobilising private investment. It supports investments in areas such as infrastructure, education, research and innovation, as well as risk finance for small businesses.
Climate Finance Provided and Mobilised by Developed Countries in 2013-2022
Concessional Finance , Guarantees
World Bank MIGA Annual 2024 Report
Concessional Finance , Guarantees
Converged Statistical Reporting Directives for the Creditor Reporting System (CRS) and the Annual DAC Questionnaire
Concessional Finance , Guarantees