The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, has launched a $6.5bn fast-track facility to support private sector investors and lenders tackling the COVID-19 pandemic in low- and middle-income countries.

The Facility redirects MIGA’s capacity toward the purchase of urgent medical equipment, provides working capital for small and medium enterprises, corporates and individuals, and supports short-term funding needs of governments.

Hiroshi Matano, MIGA Executive Vice President, said: “Private sector investors and lenders have a crucial role to play in helping meet the most pressing challenges arising from the coronavirus pandemic.”

“At a time when public financing in many countries is stretched thin, we stand ready to work quickly and at scale with investors and governments to mobilize global financing and expertise,” he added.

The Facility, which allows for issuance of guarantees using streamlined and expedited procedures, aims to meet coronavirus-related challenges through four mechanisms: Credit enhancement for governments and their agencies to borrow on non-concessional terms to purchase urgent medical equipment, protective gear, medicines, and services; De-risking solutions for commercial banks and financial institutions so they continue to provide lending through their subsidiaries in low- and middle-income countries; Credit enhancement for governments and their agencies seeking to access the credit markets for funding economic recovery projects and programs in a liquidity-constrained environment; and Supporting trade finance in partnership with IFC to extend cover for local banks in low income and fragile countries to ensure the continued flow of goods through global supply chains.

The impact of the crisis on emerging markets and developing economies is expected to be particularly severe.

Most immediately, there is an unmet demand for personal protective equipment and medical supplies and a need to provide fiscal stimulus to help local economies.

In parallel, these economies are confronting higher levels of sovereign debt, tighter financing conditions in the banking system, and a potential drop in their revenue bases.

MIGA has had over 30 years of experience working with investors and governments to help meet some of the most pressing needs in low- and middle-income countries.

Earlier this year, the Agency issued $497m in guarantees to South Africa’s Absa Group to help expand financing across seven countries in Sub-Saharan Africa.

The MIGA Fast-Track Facility is being issued alongside a package announced by the World Bank and IFC.

The World Bank Group is taking broad, fast action to help developing countries strengthen their pandemic response, increase disease surveillance, improve public health interventions, and help the private sector continue to operate and sustain jobs.

It is deploying up to $160bn in financial support over the next 15 months to help countries protect the poor and vulnerable, support businesses, and bolster economic recovery.

MIGA remains committed to supporting clients and partners, with work arrangements being adapted to accommodate social distancing and remote working.