MIGA A Multilateral Risk Mitigator Insuring Investments, Ensuring Opportunities.
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MIGA A Multilateral Risk Mitigator
Insuring Investments, Ensuring Opportunities
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
MIGA’s Role
MIGA is the entity within the World Bank Group that promotes
developmentally sound foreign direct investment. It does this through the
provision of political risk insurance (guarantees) to the private sector.
Established in 1988 172 member countries Approximately 100 staff
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Why Promote FDI?
Foreign direct investment can play a critical role in reducing poverty by creating jobs, and providing basic infrastructure
It “frees up” government resources that can be redirected from infrastructure spending, for example, to social sectors
But the majority of flows go to just a handful of countries—leaving the world's poorest economies largely ignored….
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
MIGA’s strategic priorities
Insuring investments….
In IDA-eligible countries
In conflict-affected environments
In complex projects, particularly in infrastructure and project finance deals
From one developing country to another (South-South)
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
What “political risks” does MIGA cover?
Currency inconvertibility and transfer restrictions
Expropriation (including partial and “creeping”)
War and Civil Disturbance (including revolution, insurrection, coups d'état, sabotage, and terrorism)
Breach of Contract Breach or repudiation of a contract between the investor and
the Host Country authorities (particularly relevant in infrastructure)
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Investment types covered
Equity
Shareholder loans
Loan guarantees
Loans from financial institutions
Non-shareholder loans
Non-equity direct investment
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
What does MIGA offer investors and host countries?
MIGA cover can help investors obtain project finance and/or lower borrowing costs
Access to World Bank Group’s collective knowledge and expertise
Best practice in environmental and social management
WBG “umbrella” provides leverage in dispute resolution, allowing projects to stay on track
Ability to mobilize and complement insurance capacity from public and private insurers through coinsurance and reinsurance
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
MIGA’s work with World Bank Group
Alignment with six strategic themes to help achieve an inclusive and sustainable globalization
Contribution to Country Assistance/Partnership Strategy
Participation in specific projects with other Bank group entities
Specific initiatives (example: Sustainable Infrastructure Action Plan)
Environmental and social standards, information disclosure
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Project examples
Bujagali Hydropower Project in Uganda
Address Uganda’s acute electricity shortage $115m guarantee from MIGA, $115m partial risk guarantee
from IDA, $130m in IFC financing
Doraleh Container Terminal in Djibouti
Contribute to economic growth by helping country strengthen its position as the gateway to the African hinterland
$427m guarantee from MIGA $50m reinsured with Islamic Corporation for the Insurance of
Investment and Export Credit (ICIEC) Shariah friendly
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Project examples
I.C.S. Raiffeisen Leasing S.R.L. in Moldova Covers Raiffeisen Bank SA Romania’s shareholder loan to its
subsidiary I.C.S. Raiffeisen Leasing S.R.L. (RLM) ($7.34 m) Supports start-up phase of Raiffeisen Zentralbank (RZB) Group’s
leasing operations in Moldova Meet demand for equipment (trucks, trailers, and industrial
equipment) by start-ups and SMEs
Support to nascent financial sectors helps Improve access to finance for under-served markets Strengthen standards by establishing best practices, developing
new products, and fostering competition among financial institutions
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Gross Exposureas of June 30, 2008 in US$ B
US$ 19.5B issued in 95 developing countries
since 1988
0.130.42
1.05
2.28
4.36
5.2 5.255.08 5.19 5.1
5.4
6.5
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
41% Infrastructure37% Financial9% Agribusiness and Manufacturing9% Oil, Gas and Mining
45% Europe and Central Asia20% Latin American and the Caribbean16% Sub-Saharan Africa11% Asia and the Pacific11% Middle East and North Africa
Outstanding Guarantees Portfolio by sector, as of July 2008
Outstanding Guarantees Portfolioby host region, as of July 2008
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Top Investors and Host Countries as of July 2008
Investor Country Gross Exposure(%)
Austria 19.3
France 14.3
Belgium 10.1
Spain 7.1
United Arab Emirates 6.1
South Africa 4.7
Finland 4.6
United Kingdom 4.2
Switzerland 2.9
Luxembourg 2.6
Total 75.9
Host Country Gross Exposure (%) $M
Russian Federation 13.6 880.4
Turkey 10.4 671.8
Ukraine 9.6 623.1
Djibouti 6.3 407.4
Uruguay 4.6 300.6
Mozambique 3.7 237.3
Brazil 3.6 235.4
Costa Rica 3.0 192.3
Bosnia and Herzegovina 2.9 189.1
China 2.6 169.0
Total 60.3 3,906.4
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
MIGA and the Knowledge Agenda
Lack of knowledge and information about
investment environments and perceptions of
political risk often inhibit FDI, with the majority
of flows going to just a handful of countries.
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Online Investment Information and Knowledge Services
FDI.net: Promoting foreign direct investment in emerging markets
Specific investment opportunities Investment information on business and legal environments
PRI-Center.com: Risk management information service for investors and practitioners
Country analysis and risk ratings Research and tools from public and private PRI providers
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
For more information, visitwww.miga.org
Or for business inquiries, write to migainquiry@worldbank.org
or call 202-458-2538
Thank you!
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