Japan has signed this Friday a portfolio guarantee agreement of 1,000 million dollars (925.7 million euros) that will expand the credit line of the International Bank for Reconstruction and Development (IBRD, for its acronym in English) for projects that address global challenges.
“Japan is at the forefront of supporting new financial instruments that will make the resources of the World Bank group more widely available. By sharing the risk, we can multiply our development impact“said the president of the World Bank, Ajay Banga, who signed the pact with the Minister of Finance of Japan, Katsunobu Kato.
The guarantee is part of a new Portfolio Guarantee Platform with leverage capacity that allows the commitment of 1,000 million dollars from Japan to be translated into a new financing of 6 billion dollars (5,554 million euros) in ten years.
This platform will empower shareholders with high credit ratings to intervene if a borrower fails to meet a IBRD loan.
In this way, Japan joins 14 other countries that have made commitments to the World Bank’s new financial instruments, which also include hybrid capital. These commitments could expand World Bank credits by more than 72 billion dollars (66.65 billion euros) in ten years.
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