World Bank adds US$500mn guarantee capacity to IFC trade finance programme

The World Bank Group has created a new framework that adds MIGA guarantees to IFC’s Global Trade Liquidity Program, increasing support for trade finance in low and middle-income countries.

The framework will allow the Multilateral Investment Guarantee Agency to provide guarantees covering state-owned banks under IFC’s Global Trade Liquidity Program. The first facility approved under the structure is with HSBC.

MIGA project documents show the partnership carries up to US$500mn in guarantee capacity, designed to be deployed on a facility-by-facility basis. The guarantees are intended to cover non-payment risk linked to eligible state-owned banks.

The development matters because trade finance capacity remains constrained in many emerging markets, particularly where banks face sovereign risk, weak correspondent lines or limited appetite from international lenders.

IFC’s Global Trade Liquidity Program supports trade through risk-sharing facilities with global and regional banks. Adding MIGA guarantees gives the structure another layer of sovereign-backed risk protection, potentially allowing more trade lines to remain open in difficult markets.

For banks, the new framework could make it easier to support importers and exporters where risk limits are tight. For companies, especially SMEs, better trade finance access can help secure inputs, maintain supply chains and protect jobs.

The move also shows the World Bank Group trying to use its guarantee platform more actively to mobilise private-sector trade finance. In a period of geopolitical disruption and tighter bank risk appetite, guarantee capacity is becoming a more important part of keeping trade flowing.