World Bank guarantees are available to all countries eligible for borrowing from the International Bank for Reconstruction and Development (IBRD) or the International Development Association (IDA). Bank Guarantees do not cover equity investments, risks of a purely business or commercial nature, or minimum government revenue mechanisms. The Bank offers only partial guarantees, meaning that risks are shared between the Bank and private lenders on the project supported by the guarantee.
Guarantees cover private debt against a government’s (or government entity’s) failure to meet specific obligations to a private or public project.
In regard to the selection and general use of specific guarantee instruments, partial credit guarantees (PCGs) are used to support public investment projects involving sovereign borrowings while partial risk guarantees (PRGs) are used to support private sector projects. Policy based guarantees (PBGs) are applicable only for sovereign borrowings.