 for financial guarantees to support a planned “debt-for-education” swap aimed at funding new schools.){kind=link}
Angola has secured approval from the World Bank and its Multilateral Investment Guarantee Agency (MIGA) for financial guarantees to support a planned ‘debt-for-education’ swap aimed at funding new schools.
The guarantees will allow Angola to buy back up to $400m of its costly commercial debt and replace it with a lower-interest loan.
The savings from reduced interest payments will be used to build schools and support improvements in the country’s education sector.
Debt swaps are designed to help governments reduce debt servicing costs and redirect funds to important development projects.
Angola’s plan will be only the second debt swap supported by the World Bank, following a similar initiative in Côte d’Ivoire last year.
MIGA’s Director for Industries, Muhamet Bamba Fall, said the deal shows how financial guarantees can help countries manage debt while investing in human development.
The World Bank also approved a separate $750 million development policy loan for Angola.
The funds are expected to support the development of the Lobito Corridor, a major transport route that links mining areas in Zambia and the Democratic Republic of Congo to Angola’s Lobito port.
As many countries face rising debt and declining development aid, governments are increasingly exploring options such as debt swaps to finance projects in sectors like education, health and environmental protection.
The World Bank said it is working on more such deals after supporting its first debt swap in 2024.
Angola has also indicated plans for a debt-for-health swap, although details about the credit guarantees for that initiative have not yet been announced.
Reuters/Hauwa M.