World Bank Group is prepared to deploy fast track support up to US$160 billion over the next 15 months, to help the countries fight the COVID-19, said the president last week - Photo by World Bank Office

JAKARTA (TheInsiderStories) – World Bank Group is prepared to deploy fast track support up to US$160 billion over the next 15 months, to help the countries fight the COVID-19, said the president last week. So far, the Fund has disbursed in a 52 countries, with another 50 countries expected to begin implementation in coming weeks.

While, its financial armed, the International Finance Corporation’ (IFC) COVID-19 response pipeline to date includes more than 300 companies for a total of $8.9 billion. Last week, said David Malpass, the Multilateral Investment Guarantee Agency(MIGA) launched a $6.5 billion facility to support private sector investors and lenders in tackling the virus spread.

He adds, the facility redirects MIGA’ capacity toward the purchase of urgent medical equipment, providing working capital for small and medium enterprises, and supporting short-term funding needs of governments.

“We continue to work with COVID-related manufacturers and suppliers to support countries’ procurement of medical supplies and equipment. We are currently evaluating procurement options for 20 countries. Demand for medical equipment and supplies is outstripping supply, and lead-times are increasing,” said Malpass.

He also revealed, that the agency have been working to provide debt relief for poor countries based on the World Bank – International Monetary Fund (IMF) Joint Call to Action for Debt Relief for IDA countries. The implementation was discussed twice this week in meetings at the G20 International Financial Architecture Working Group, he noted.

According to Malpass, this week will be a critical week for the debt relief agenda. It will be discussed at the G7 and G20 meetings of finance ministers and central bank governors, as well as at the World Bank and IMF Development Committee meeting on Friday.

Last month, World Bank and IFC approved an increased of $14 billion package of fast-track financing to prevent, detect and respond to the rapid spread of COVID-19. The amount higher than previous announcement in March 4.

It said, IFC will increase its COVID-19 related financing availability to $8 billion as part of the package, up from an earlier $6 billion, to support private companies and their employees hurt by the economic downturn caused by the spread of the virus.

“This package provides urgent support to businesses and their workers to reduce the financial and economic impact of the spread of COVID-19,” said Malpass on March 18.

He continued, the additional $2 billion builds on the announcement of the original response package on March 3, which included $6 billion in financing by the World Bank to strengthen health systems and disease surveillance and $6 billion by IFC to help provide a lifeline for micro, small and medium sized enterprises, which are more vulnerable to economic shocks.

Philippe Le Houérou, CEO of IFC elaborated, $2 billion from the Real Sector Crisis Response Facility, which will support existing clients in the infrastructure, manufacturing, agriculture and services industries vulnerable to the pandemic. IFC will offer loans to companies in need, and if necessary, make equity investments. This instrument will also help companies in the healthcare sector that are seeing an increase in demand.

Then, another $2 billion from the existing Global Trade Finance Program will cover the payment risks of financial institutions so they can provide trade financing to companies that import and export goods. IFC expects this will support small and medium-sized enterprises involved in global supply chains.

Furthermore, $2 billion from the Working Capital Solutions program, which will provide funding to emerging-market banks to extend credit to help businesses shore up their working capital, the pool of funds that firms use to pay their bills and compensate workers.

A new component initiated at the request of clients and approved on March 17 was $2 billion from the Global Trade Liquidity Program, and the Critical Commodities Finance Program, both of which offer risk-sharing support to local banks so they can continue to finance companies in emerging markets.

“IFC is already working to deploy its response financing. For example, we recently expanded trade-financing limits for four banks in Vietnam by $294 million so they could continue lending to companies in need, especially small and medium-sized enterprises,” conclude by Le Houérou.

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