Absa Group Ltd, one of the largest diversified financial service providers in Africa, has concluded an agreement with the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, helping Absa expand financing across seven countries in Sub-Saharan Africa.

In terms of the agreement, MIGA will issue guarantees of US$497 million to Absa. The guarantees are valid for as long as 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 Absa and other banks are required to hold with central banks. They will 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.

“We are pleased to work with MIGA. Their guarantees allow us to provide additional financing in our subsidiaries in Ghana, Kenya, Mauritius, Mozambique, Seychelles, Uganda and Zambia,” said Jason Quinn, Absa Group Financial Director.

Absa is the first African banking group to enter into this type of guarantee transaction with MIGA.