World Bank Backs Angola Debt Swap to Build New Schools

Angola has received formal approval from the World Bank and its Multilateral Investment Guarantee Agency (MIGA) for financial guarantees that will facilitate a debt-for-education swap. This initiative is designed to reduce interest payments, allowing the government to redirect funds toward the construction of new schools. The arrangement represents only the second time the World Bank has supported such a swap, following a similar project in Ivory Coast launched last year. Under the terms of the deal, the Angolan government plans to buy back up to $400 million of its high-cost commercial debt. This will be replaced by a new loan with significantly lower costs, backed by guarantees from the World Bank and MIGA to ensure repayment stability. The financial savings generated by this restructuring will be dedicated to building educational infrastructure and funding other sector improvements. > This operation demonstrates the power of the Guarantee Platform for both liability management and human capital development. In a separate move, the World Bank also approved a $750 million development policy loan for the country. These funds are expected to support the development of the Lobito Corridor, a major infrastructure project connecting the mining regions of Zambia and the Democratic Republic of the Congo to the port of Lobito. As many nations face rising debt and a reduction in official development aid, creative financial tools like debt-for-education or debt-for-nature swaps are becoming increasingly common. The World Bank, which previously remained cautious about such deals until its 2024 Ivory Coast intervention, now indicates it has a substantial pipeline of similar operations planned. Angola has also expressed intentions to pursue a debt-for-health swap in the future, though the specific credit guarantors for that initiative have not yet been identified.