Scale proven Risk-Sharing Instruments

On average, MDBs only crowd-in private finance of approximately 1.2 times the resources they commit themselves. In order to attract the volumes of private finance needed, MDBs need to expand their use of proven de-risking/risk-sharing instruments for climate projects.

2030 Goals

Reduce the cost of capital of sustainable investments in EMDEs by addressing a range of perceived and real risks.
Agreement by MDBs and major shareholders to work with OECD to pool and harmonize guarantee terms with data transparency.
Commit to triple the quantum of guarantees (including MIGA) by 2025 globally from $70bn notional to $200bn, exploring auction mechanisms to maximize total capital mobilization.

Status
No progress

The World Bank Group, including MIGA and IFC, continues to expand its portfolio of risk insurance and credit guarantees to attract private sector investments in developing countries.
Regional development banks, such as the African Development Bank (AfDB) are scaling up their guarantee offerings to mitigate risks.

Leading Actors

Multilateral Development Banks

African Development Bank (AfDB), Asian Development Bank (ADB), Asian Infrastructure Investment Bank (AIIB), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Inter-American Development Bank (IDB), Islamic Development Bank (IsDB), MIGA, New Development Bank (NDB - BRICS Bank), International Finance Corporation (IFC), World Bank

Leading Countries

Ministries of Finance

Alliances

US, India, Brazil, Germany, UK, China

Resources

The below resources all pertain to the topic of Scaling Risk-Sharing Instruments.

African Development Bank Guarantees

MDB Reform, Scale proven Risk-Sharing Instruments

Types of Guarantees

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MIGA