By ABCafrica reporter
Uganda is one of several countries in Sub-Saharan Africa that stands to benefit from a new World Bank financing facility that aims to support private sector access more affordable capital for investment.
Speaking during a workshop to brief private sector companies and Government of Uganda held at the Kampala Serena Conference Centre last Monday, the IFC Director for Sub-Saharan Africa, Oumar Seydi explained that the Private Sector Window (PSW) is intended to help private companies access more affordable capital for investment by providing additional guarantees to insure against risks, particularly for countries that are affected by conflict or are politically unstable.
The new facility is spearheaded by the World Bank Group’s private sector lending arm, the International Finance Corporation, and the Multilateral Investment Guarantee Agency (MIGA) which offers political risk. Insurance and credit enhancement guarantees to help companies’ access credit.
“Many projects in emerging markets that need capital are unable to access financing because the risks are too high and the returns are not commensurate with the level of risk. The use of blended finance allows us to fill this financing gap by addressing market barriers and attract private sector investments to areas of strategic importance with high development impact,” Seydi said.
With the new IDA18 private sector window, the World Bank Group will channel its support to companies that are interested in investing in power production and distribution, and to financial institutions to help improve access to finance, including credit lines, housing finance and SME finance. Agribusinesses are also a priority under the sub-window, with financing targeted towards increasing agricultural productivity, improving food security and increase incomes of small farmers.