A World Bank guarantee is seen by investors as a stabilizing factor in transactions with sovereign governments. By covering a government or government entity’s failure to meet specific contractual obligations to a private or public project, World Bank guarantees have helped attract direct private sector investment in oil, gas and mining, power, telecom, transport, and water projects; enhanced private sector participation in privatizations and public-private partnerships, and helped governments access international capital markets on more favorable terms.  In addition to the leverage effect, guarantees have also played a valuable role in easing the entry of emerging economies into international capital markets by helping them acquire a track record of credible policy performance.

	Identify suitable credit enhancement solutions using the World Bank Group guarantees matrix.

Partial Risk Guarantee

Covers debt service defaults on a loan to a private sector project caused by a government's failure to meet its contractual obligations related to a private project.  Such guarantees allow public sector projects to reduce political or regulatory risks that can hamper private investment.

Partial Credit and Policy-Based Guarantees

Cover debt service defaults on a specified portion of a loan or a bond, allowing public sector projects to access financing with extended maturities and lower spreads.

MIGA's Non-Honoring of Sovereign Financial Obligations Product

MIGA’s non-honoring of sovereign financial obligations (NHSFO) coverage provides credit enhancement in
transactions involving sovereign and subsovereign obligors. The primary beneficiaries of this cover are commercial
lenders that provide loans to public sector entities for infrastructure and other productive investments. NHSFO has the additional benefit of mobilizing financing from the private sector without using IBRD credit lines.

Learn more about NHSFO coverage (pdf 590KB)