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The World Bank Group Instruments. World Bank Group financing and risk mitigation instruments. IBRD Enclave Loan for IDA-Only Country. IBRD. Guarantee. IDA-Only COUNTRY. Loan. Loan Repayment. Guarantee. Offshore Escrow Account. Project Revenues. Power Company. Purchaser. Throughput.

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The World Bank Group Instruments

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The World Bank Group Instruments


World Bank Group financing and risk mitigation instruments


IBRD Enclave Loan for IDA-Only Country

IBRD

Guarantee

IDA-Only

COUNTRY

Loan

Loan Repayment

Guarantee

Offshore EscrowAccount

Project Revenues

Power Company

Purchaser

Throughput

Equity

Sponsors


World Bank Guarantees:key features

  • Catalyzes private financing for key sectors such as infrastructure

  • Covers private debt against a government’s (or government entity’s) failure to meet specific obligations to a private or public project

  • Mobilizes private sector participation; helps extend maturities and lower financing costs

  • Flexibility – structured to meet borrower and project requirements

  • Counter guarantee from Member Country


World Bank Partial Risk GuaranteesCover these risks

  • tariff

  • regulatory risk

  • collection risk

  • arbitration

  • change in law

  • convertibility

  • transferability

  • subsidy payments (e.g. Output-Based Aid)


Partial Risk Guarantees help access finance at sustainable terms

Debt Maturity

Interest Spread1

Vietnam

(P. Risk)

5

5%

2%

16

1

3%

Bangladesh

(P. Risk)

14

2%

3%

1

Cote d’Ivoire

(P. Risk)

12

2.75%

0

N/A

Lao PDR

(P. Risk)

16.5

2.25 %

without Guarantee

with Guarantee

1Spreads at the time of the guarantee issuance


MIGA: Risks and Investments

  • 4 Basic Covered Risks:

    - Expropriation

    - War and Civil Disturbance

    - Currency Transfer (Inconvertibility)

    - Breach of Contract (+ Denial of Justice)

  • Principal Covered Investments:

    • Equity

    • “Associated” (loosely) Debt

      • Shareholder Loans

      • Debt in project with Insured Equity Investment


MIGA: Finance Structure

MIGA

Agreement

COUNTRY

Insurance

Banks

Loans

Power Company

Support

Equity

Sponsors


IFC: 4 Basic Products

  • Equity and Quasi Equity (Participating loans; Convertible debentures; Preferred stock)

  • Loans from IFC resources(A-loans)

  • Syndicated Loans (B-loans)

    • Lender of record umbrella

    • Not a “guarantee”

    • Degree of currency transfer protection

    • Other Political Risk Mitigation

  • Guarantees


IDA also provides special support for regional integration projects

  • Regional Integration Projects receive 2/3 IDA funding from a special allocation, and the country only contributes 1/3 funding from its IDA allocation

  • Projects must cover at least 3 countries, and demonstrate benefits to more than one country

  • IDA15: US$2.1 billion allocated to Africa Regional Integration


A 865km 26-inch diameter Pipeline between the Gas Fields and Sasol’s plant in Secunda, South Africa, including 5 take off-points in Mozambique for future domestic gas use

Southern Africa Regional Gas Project

Development of Gas Fields in Mozambique Inhambane Region (Pande and Temane)

A Central Processing Facility (CPF) to process/clean the gas before transport


IFC

IFC Investment and Advisory Role:

Equity investment in Upstream

Advisory assistance to CMH in mobilizing financing for the Upstream

Facilitating local participation

MIGA

Political Risk Cover for equity and debt to SPT & Rompco including:

Breach of contract

Currency transferability

Expropriation

War & Civil Disturbance

Combined Support ofIFC, MIGA, IBRD

  • IBRD Enclave PRG

    Political Risk Cover for debt to SPT & Rompco including:

    • Sovereign obligations including changes in laws

    • Currency transferability

    • Expropriation


Eastern and Southern Africa Technical Advisory Services Project

  • Aims to help Governments assess and respond to major investment proposals

  • Will provide just-in-time technical advisory support for infrastructure and natural resource projects (e.g. on legal, financial, social and environmental issues)

  • Will help develop the policy and legal frameworks for regional infrastructure projects


For further information

Please contact:

Peter Nicholas, World Bank

pnicholas@worldbank.org

+1-202-458-0420

Diep Nguyen-van Houtte, World Bank

dnguyenvanhoutte@worldbank.org

+1-202-458-7548


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