Absa, MIGA conclude agreement for $497m in financing guarantees
Diversified financial services provider Absa Group has concluded an agreement with the Multilateral Investment Guarantee Agency (MIGA) that will assist Absa in expanding its financing services across seven countries in sub-Saharan Africa.
In terms of the agreement, MIGA will issue guarantees of $497-million to Absa.
The guarantees are valid for 15 years and apply to Absa’s subsidiaries in Ghana, Kenya, Mauritius, Mozambique, Seychelles, Uganda and Zambia.
The guarantees will help to protect Absa against risks related to the mandatory capital reserves that it and other banks are required to hold with central banks.
The guarantees will also free up financial capacity, enabling Absa’s subsidiaries to provide additional lending and generate more revenue. The subsidiaries will increase sustainable financing for corporates and small and medium-sized businesses, as well as projects with co-climate benefits.
Absa Group FD Jason Quinn says the MIGA guarantees allow the company to provide additional financing within its subsidiaries.
Absa is the first African banking group to enter into this type of guarantee transaction with MIGA, which is a member of the World Bank Group.
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