GARVIT KUMAR GAURAV KR. SHIVHARE GAURAV MOHANTY GIRINDRA MOHAN SINGH GOVIND CHILHATE JAI KR. SHARMA JAYANT MITTAL JOHNSON MATHEW JUHI JAIN
The Multilateral Investment Guarantee Agency (MIGA) is a member organization of the World Bank Group that offers political risk insurance. It was established to promote foreign direct investment into developing countries. It was founded in 1988 with a capital base of $1 billion and is headquartered in Washington, DC. 175 member countries comprise MIGAs shareholders.
MIGA promotes foreign direct investment into developing countries by insuring investors against political risk, advising governments on attracting investment, sharing information through on-line investment information services, and mediating disputes between investors and governments. MIGAs membership in the World Bank Group enables the organization to intervene with host governments to resolve claims before they are filed.
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 worlds poorest economies largely ignored….
Izumi Kobayashi - Executive Vice President Michel Wormser - Vice President and Chief Operating Officer Ana-Mita Betancourt - Director and General Counsel Kevin Lu - Regional Director, Asia and Pacific Lakshmi Shyam-Sunder - Chief Financial Officer and Director, Finance and Risk Management
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)
Currency transfer restrictions. Expropriation. War and civil disturbance. Breach of contract. Non-honoring of sovereign financial obligations. MIGA guarantees offer much more than just the assurance that losses will be recovered.
MIGA can cover: New, GREEN investments. New investment contributions associated with the expansion, modernization, or financial restructuring of existing projects. Acquisitions involving privatization of state enterprises. existing investments with high development impact when the investor demonstrates a long-term commitment to the project.
Member’s Non-Member’s Brunei, Sao Tome andMembers of the MIGA Principe, Niger, Somalia, Comoros, Saninclude 174 members of the Marino, Bhutan, Myanmar, Tuvalu, Kiribati, Marshall Islands, Samoa, Cuba, NorthUnited Nations and Korea, Andorra, Monaco, Liechtenstein, Nauthe Republic of Kosovo ru, Cook Islands, Niue, Vatican City and the rest of states with limited recognition.
Currency inconvertibility and transfer restrictions Expropriation (including partial and “creeping”) War and Civil Disturbance (including revolution, insurrection, coups détat, sabotage, and terrorism) Breach of Contract Breach or repudiation of a contract between the investor and the Host Country authorities (particularly relevant in infrastructure)
Equity Shareholder loans Loan guarantees Loans from financial institutions Non-shareholder loans Non-equity direct investment
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
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
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 $50m reinsured with Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) Shariah friendly
US$ 19.5B issued in 95 developing countries since 1988 6.5 5.4 5.2 5.25 5.19 5.08 5.1 4.36 2.28 1.05 0.420.13
Outstanding Guarantees Portfolio by host region, as of July 200841% Infrastructure 45% Europe and Central Asia37% Financial 20% Latin American and the Caribbean9% Agribusiness and Manufacturing 16% Sub-Saharan Africa9% Oil, Gas and Mining 11% Asia and the Pacific 11% Middle East and North Africa
Investor Country Gross Exposure Host Country Gross Exposure (%) (%) $MAustria 19.3 Russian Federation 13.6 880.4France 14.3 Turkey 10.4 671.8Belgium 10.1 Ukraine 9.6 623.1Spain 7.1 Djibouti 6.3 407.4United Arab Emirates 6.1 Uruguay 4.6 300.6South Africa 4.7 Mozambique 3.7 237.3Finland 4.6 Brazil 3.6 235.4United Kingdom 4.2 Costa Rica 3.0 192.3Switzerland 2.9 Bosnia and Herzegovina 2.9 189.1Luxembourg 2.6 China 2.6 169.0Total 75.9 Total 60.3 3,906.4