Presentation is loading. Please wait.

Presentation is loading. Please wait.

Conflict Affected and Fragile States Facility (CAF) Environmental and Social Challenges Trust Fund Two new Facilities: WBG Donor Forum – Paris – May 19,

Similar presentations


Presentation on theme: "Conflict Affected and Fragile States Facility (CAF) Environmental and Social Challenges Trust Fund Two new Facilities: WBG Donor Forum – Paris – May 19,"— Presentation transcript:

1 Conflict Affected and Fragile States Facility (CAF) Environmental and Social Challenges Trust Fund Two new Facilities: WBG Donor Forum – Paris – May 19, 2010

2 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 2 MIGA – Two Examples of New Ways to Expand our Core Business Creation of a new Facility to encourage investment in post-conflict and fragile states: Offer a wider set of instruments and services Expansion of an existing pilot Facility: provide technical assistance to existing or potential MIGA clients to help them achieve compliance with MIGAs environmental and social standards.

3 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 3 Private investment helps reduce the return to conflict Economic growth reduces the risk of reverting to conflict Main driver: job creation Long-term structural employment requires private sector development Growth rate of private sector is reduced by risk and lack of investment

4 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 4 But – Private investment tends to come in several years after aid peaks

5 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 5 High Demand, Low Capacity for Insuring Projects in Conflict Affected States Investors, lenders and exporters express interest in conflict affected states, but risk is often too high and risk mitigation options are limited: Private insurance market: case by case basis only, short tenors, high premiums. Public market: many Export Credit Agencies are either off- cover or offer limited cover (e.g. case by case basis, short term only) for export credit insurance. Limited amounts of investment insurance coverage are available.

6 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 6 Private PRI in Conflict-affected and Fragile States - Market Failure Maximum feasible price

7 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 7 MIGA - Proposed Conflict-affected and Fragile States Facility (CAF) Allow MIGA to start addressing gaps in the supply of insurance for projects in target countries Context Promoting sustainable development in post conflict and fragile states. Influence investment and trade decisions by means of insurance Facility will be fully donor funded, providing for the insurance products that clients need to invest in and trade with target countries Facility would harness private sector insurance market to create a public-private partnership (PPP) solution

8 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 8 Facility is set up as a Public-Private Partnership Donor Investors, exporters and lenders Conflict Affected and Fragile States Insurance cover premium Donor Private Sector (PRI Market) Private Sector (PRI Market) Donors Investment and trade Facility Excess of Loss Layer ($400 million) Excess of Loss Layer ($400 million) First Loss Layer ($100 million) First Loss Layer ($100 million) Facility

9 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 9 Main principles of the Facility Facilitate projects with positive developmental impact in conflict affected and fragile states Offer insurance products such as investment insurance, export credit insurance, coverage for local currency financing All projects insured under the Facility will comply with WBG safeguard policies and fit in the Debt Sustainability Framework Facility complements WBG and other Development Partners activities

10 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 10 Proposed risk mitigation instruments Investment insurance for equity or debt: both cross border and local, new and existing War and Civil disturbance, including business interruption Expropriation Currency conversion and transfer Breach of contract Non-honoring of a sovereign financial guarantee Structured trade credit insurance (pre-export finance) Export credit insurance All instruments to be used both for inward or domestic flows and for outward trade and investment

11 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 11 The World Bank Groups Role in the CAF Facility Fiduciary responsibility for management of the fund Clients value multilateral participation Attracting Beneficial Investment - screen investors Ensuring respect of debt sustainability ceilings Facility would complement existing programs (Peace and State-building Fund, governance, investment climate)

12 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 12 MIGA - Environmental and Social Challenges Trust Fund Purpose: Provide technical assistance to help MIGA clients achieve compliance with MIGAs environmental and social performance standards. Important resource which has received positive feedback from the clients.

13 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 13 Examples of Technical Assistance Provided through the Trust Fund between 2007 and 2009: Resettlement in Nigeria Human Rights in DRC Communities and Workers health and safety in Mozambique Development of environmental management systems in Rwanda and Uganda Artisanal miners in Burkina Faso.


Download ppt "Conflict Affected and Fragile States Facility (CAF) Environmental and Social Challenges Trust Fund Two new Facilities: WBG Donor Forum – Paris – May 19,"

Similar presentations


Ads by Google