The World Bank approved a $1.1 billion (approximately one billion euros) financial package to support economic reforms in Angola and also includes a debt-for-development swap, the institution announced today.
According to the World Bank, the operation includes a Development Policy Loan of $750 million (approximately €689 million) and a Policy-Based Credit Line of $240 million (approximately €220 million), supplemented by a second-loss guarantee from the Multilateral Investment Guarantee Agency (MIGA).
These guarantees will also allow for an additional commercial loan of 400 million dollars (approximately 368 million euros), raising the total value of the financial package to approximately 1.1 billion dollars.
According to the institution, the financial instruments aim to support the country’s structural reform agenda, improve public finance management, enhance transparency, and promote private-sector-led job creation.
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Part of the financing will be used in a debt-for-development swap operation, a mechanism that involves prepaying costly commercial debt with funds obtained through a more competitive commercial loan, thereby reducing the costs of debt service.
The World Bank also highlights that the operation will support the development of the Lobito Corridor, a strategic infrastructure project linking Zambia and the Democratic Republic of Congo to the Port of Lobito in Angola, to mobilize foreign direct investment, generate employment, and strengthen regional integration.
According to the World Bank, part of the fiscal savings resulting from this operation will be directed towards expanding access to education and investments in human capital.
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The World Bank Group is one of the main sources of long-term financing for Angola, with a total portfolio close to five billion dollars (approximately 4.6 billion euros), through the International Bank for Reconstruction and Development, 265 million dollars (about 243 million euros) by MIGA, and approximately 200 million dollars (around 184 million euros) mobilized by the International Finance Corporation.
