World Bank, IFC, MIGA help finance Afghanistan energy projects
The World Bank has approved a $98.8 million financing package - comprising a mix of guarantees, a loan, and swaps - for two gas-to-power energy projects in Afghanistan.
The financing will support Sheberghan and Mazar-e-Sharif Gas-to-Power Projects.
The package is aimed at increasing domestically generated electricity through the gas-to-power energy projects, whilst leveraging private financing for the energy sector in the country.
It includes a $12.8 million guarantee from the International Development Association, while the rest is for the Mazar-e-Sharif project. The package for Mazar-e-Sharif project includes a $12 million guarantee from IDA to backstop the ongoing payment obligation of Da Afghanistan Breshna Sherkat, and a $23.8 million senior loan.
The project also includes $1.5 million in client risk-management swap from the International Finance Corporation, which will mobilise $43.8 million in parallel loans for the project as mandated lead arranger.
In addition, the Multilateral Investment Guarantee Agency is providing $48.7 million political risk insurance for the two private shareholders and a senior lender.
The investments by IFC and political risk guarantees from MIGA will be partly covered by the IDA Private Sector Window’s Risk Mitigation Facility and the MIGA Guarantee Facility, respectively.
