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MIGA - How Political Risk Insurance by Keiko Honda at GIB Summit
 

MIGA - How Political Risk Insurance by Keiko Honda at GIB Summit

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Presented at the 4th Global Infrastructure Basel Summit 21 & 22 May 2014. Read more at www.gib-foundation.org.

Presented at the 4th Global Infrastructure Basel Summit 21 & 22 May 2014. Read more at www.gib-foundation.org.
Next Summit: 27 & 28 May 2015 in Switzerland

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    MIGA - How Political Risk Insurance by Keiko Honda at GIB Summit MIGA - How Political Risk Insurance by Keiko Honda at GIB Summit Presentation Transcript

    • How Political Risk Insurance Can Help Further Investment in Sustainable Infrastructure May 21, 2014 Global Infrastructure Basel
    • 1MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP Sub-Saharan Africa Infrastructure Needs (2008) Government Funding 65% ODA 14% Private Sector Funding 21% Current Sources of Financing Not only can we focus on mobilizing funding but also on tackling the efficiency gap $17 billion $ 31 billion Efficiency Gap Funding Gap $45 billion $93 million in funding needs
    • 2MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP Risks Covered Political Risk Insurance (PRI) Credit Risk Transfer restriction & currency inconvertibility Expropriation War & civil disturbance Breach of contract Sovereign Sub-sovereign State-owned enterprise +
    • 3MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP MIGA’s Growth (New Guarantees Issued, $ billion, FY) 0.0 0.5 1.0 1.5 2.0 2.5 3.0 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 NHSFO Issued by FY PRI Issued by FY Onset of global financial crisis - MIGA’s IFI Initiative launched Agency established in 1988 NHSFO introduced in 2009 NH for SOE obligors introduced Decoupling of debt and equity, introduced in 2009 Growth Rate (CAGR, %, FY03-13) Total:7.3% PRI: 3.6%
    • 4MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP  Expansion of underground metro system on Asian side of Istanbul  MIGA cover: NHSFO on a loan provided to MMI by a consortium of banks, with WestLB acting as facility agent  Tenor: 9.5 years  Amount: €280M, including principal, interest & premium Istanbul Metro Project Turkey
    • 5MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP FDI Growth: Mostly in Investment-grade Countries 136 156 139 111 11 12 +7% p.a. 6 221822 09 10 11 12 214 226 171 136 +16% p.a. 09 10 11 12 5149 34 40 +8% p.a. 67 60 5349 +11% p.a. 09 10 11 12 15141718 -6% p.a. 09 10 11 12 5122 09 10 11 12 FDI Inflows, USD bn A BBB BB B CCC <CC NR BB/B/CCC/ <CC and not rated Growth rate: 3.2% 09 10 11 1209 10 71%
    • 6MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP MIGA Activities in Political Risk Insurance – Strong in Riskier Markets New cover provided in calendar year 2012 * S&P rating used, MIGA non- honoring risk rating when S&P not available 41.2 16.710.7 7.9 7.6 2.4 A BBB BB B CCC <CCRating* 0.6% 0% 6.3% 5.0% 2.3% 28.7%MIGA’s share (%) Market size ($ billions) Below investment grade countries Investment grade countries
    • 7MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP  Construction and operation of power generation project using methane gas from Lake Kivu  MIGA cover: expropriation, transfer restriction, war & civil disturbance, breach of contract provided to investor ContourGlobal  Tenor: up to 20 years  Amount: $66.8M Kivuwatt Power Project Rwanda
    • miga.org miga-twitter miga-linkedin I N S U R I N G I N V E S T M E N T S  E N S U R I N G O P P O R T U N I T I E S