Presentation on theme: "MIGA A Multilateral Risk Mitigator Insuring Investments, Ensuring Opportunities."— Presentation transcript:
MIGA A Multilateral Risk Mitigator Insuring Investments, Ensuring Opportunities
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP MIGAs 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 countriesleaving the world's poorest economies largely ignored….
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP MIGAs 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 Groups 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 MIGAs 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 Ugandas 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 Romanias shareholder loan to its subsidiary I.C.S. Raiffeisen Leasing S.R.L. (RLM) ($7.34 m) Supports start-up phase of Raiffeisen Zentralbank (RZB) Groups leasing operations in Moldova Meet demand for equipment (trucks, trailers, and industrial equipment) by start-ups and SMEs Support to nascent financial sectors helps Improve access to finance for under-served markets Strengthen standards by establishing best practices, developing new products, and fostering competition among financial institutions
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP Gross Exposure as of June 30, 2008 in US$ B US$ 19.5B issued in 95 developing countries since 1988
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 41% Infrastructure 37%Financial 9%Agribusiness and Manufacturing 9%Oil, Gas and Mining 45%Europe and Central Asia 20%Latin American and the Caribbean 16%Sub-Saharan Africa 11%Asia and the Pacific 11%Middle East and North Africa Outstanding Guarantees Portfolio by sector, as of July 2008 Outstanding Guarantees Portfolio by 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 (%) Austria19.3 France14.3 Belgium10.1 Spain 7.1 United Arab Emirates6.1 South Africa4.7 Finland4.6 United Kingdom4.2 Switzerland2.9 Luxembourg2.6 Total75.9 Host Country Gross Exposure (%) $M Russian Federation13.6880.4 Turkey10.4671.8 Ukraine9.6623.1 Djibouti6.3407.4 Uruguay4.6300.6 Mozambique3.7237.3 Brazil3.6235.4 Costa Rica3.0192.3 Bosnia and Herzegovina2.9189.1 China2.6169.0 Total60.33,906.4
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, visit www.miga.org Or for business inquiries, write to email@example.com or call 202-458-2538 Thank you!