African governments could gain millions of euros and dollars for development projects as the World Bank prepares up to 15 transactions designed to reduce the cost of servicing existing debt. The initiative offers countries a way to ease pressure on public finances without securing outright debt cancellation.

The plan targets one of the biggest constraints on government spending: the money consumed by interest payments before it can reach schools, hospitals, roads and other public services.

World Bank President Ajay Banga disclosed the pipeline in an interview on Sunday, Oct. 11, ahead of the World Bank and International Monetary Fund annual meetings in Bangkok.

The stakes are particularly significant for African economies facing expensive commercial borrowing. Developing countries are expected to pay about $400 billion to external creditors in 2026, according to World Bank estimates, with interest accounting for roughly one-third of the total.

The bank has not named the countries involved in the new deals or disclosed their combined value.

Cheaper loans could unlock development funding

The World Bank’s approach centres on using guarantees to make refinancing less expensive. Instead of paying off a country’s obligations itself, the institution helps reduce lenders’ exposure to risk, allowing a government to replace high-interest commercial debt with a loan carrying better terms.

The resulting savings can create room for development spending, although the original debt is not cancelled.

These transactions, known as debt-for-development swaps, must generate sufficient savings after fees and other costs to justify the refinancing.

The strategy also forms part of a broader push to attract private investment into African economies.

In May 2026, the World Bank announced plans to more than double its annual guarantee issuance in Africa to $6.4 billion by 2030, targeting $23 billion in private capital over four years. Infrastructure, energy and financial services are among the sectors expected to benefit.

Côte d’Ivoire turns debt savings into school funding

Côte d’Ivoire has already demonstrated how the model can work. In December 2024, the government announced a World Bank-supported transaction to refinance nearly €400 million($447.37 million) in high-interest commercial debt.

The arrangement enabled the country to obtain a new commercial loan at a lower interest rate and with a longer repayment period.

The World Bank estimates that the deal will free up approximately €330 million($369.07 million) in budget resources over five years and generate at least €60 million($67.1 million) in net present-value savings over the loan’s lifetime. Most of the savings are earmarked for school construction.

Angola adopted a similar approach in March 2026 through a $400 million refinancing arrangement supported by the World Bank and its Multilateral Investment Guarantee Agency (MIGA).

The structure includes a $240 million World Bank guarantee alongside additional MIGA coverage. Most of the expected savings will finance 30 additional secondary schools, benefiting more than 32,000 students.