MIGA A Multilateral Risk Mitigator Insuring Investments, Ensuring Opportunities

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


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….


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)


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)


Investment types covered

Equity

Shareholder loans

Loan guarantees

Loans from financial institutions

Non-shareholder loans

Non-equity direct investment


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


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


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


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


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


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


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


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.


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


For more information, visitwww.miga.org

Or for business inquiries, write to [email protected]

or call 202-458-2538

Thank you!

Documents

MIGA A Multilateral Risk Mitigator Insuring Investments, Ensuring Opportunities