MIGa Final Copy

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Powerpoint Templates

Page 1Powerpoint Templates

a study onMIGA (Multilateral

Investment GuaranteeAgency)

Presented To: Presented By:Dr Y C Joshi Ashwini Yadav (10M05)

Kaushil Shah (10M16)Manan Buch (10M19)

Pallavi Agrawal (10M26)

G.H.Patel Postgraduate Institute ofBusiness Management, V V Nagar

Sardar Patel University
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MISSION

To promote foreign direct investment intodeveloping countries to supporteconomic growth, reduce poverty and

improve peoples lives.
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HISTORY

On April 12, 1988 an international convention

established MIGA as the newest member of theWorld Bank Group

The agency opened for business as a legally

separate and financially independent entity

Membership was open to all IBRD members, andthe agency began with capital stock of $1 billion.There were 29 members at the initial phase


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ConT

MIGA convention defined its core mission: "to

enhance the flow to developing countries of capitaland technology for productive purposes underconditions consistent with their developmentalneeds, policies and objectives, on the basis of fair

and stable standards to the treatment of foreigninvestment."


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OBJECTIVES OF THE STUDY

To study organization and structure of MIGA

To study how MIGA selects areas of its operations

To understand different non commercial risks that

MIGA guarantees

To study procedure of providing guarantees

To study MIGAs operation in India and its future

vision


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METHODOLOGY OF THE STUDY

Secondary information was accessed from the

following sources:

Journals

MIGAS website

Other authenticated websites


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Powerpoint Templates Page 7

INTRODUCTION

MIGA is a member of the World Bank Group. Like

IBRD,IFC,IDA and ICSID

IBRD and IDA provide loans at preferential rates tomember countries, as well as grants to the poorest

countries while IFC and MIGA include investment inthe private sector and providing insurancerespectively

MIGA provides guarantees against noncommercial

risks to protect cross-border investment indeveloping member countries


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ConT

Over the years, the organization has provided more

than $24 billion in political risk insurance for over600 projects in more than 100 developing countries

MIGA's task is also to provide water, electricity and

other basic infrastructure, in addition to generatingtax revenues and creating training programs


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ConT

There are 175 member countries in MIGA

MIGAs team has extensive experience in politicalrisk insurance, with backgrounds including bankingand capital markets, environmental and social

sustainability, project finance and sector specialties,and international law and dispute settlement.

MIGAs strength lies of it being the member ofWorld Bank Group and an international structure

made of shareholders forming of internationalcountries.


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OBJECTIVES OF MIGA

The objective of the Agency is to:

Encourage the flow of investments for productivepurposes among member countries, and inparticular to developing member countries

Supplementing the activities of the InternationalBank for Reconstruction and Development(hereinafter referred to as the Bank), theInternational Finance Corporation and other

international development finance institutions.


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To serve its objective, the Agency shall:

Issue guarantees, including coinsurance andreinsurance, against non-commercial risks inrespect of investments in a member country whichflow from other member countries;

Carry out appropriate complementary activities topromote the flow of investments to and amongdeveloping member countries; and

Exercise such other incidental powers as shall benecessary or desirable in the furtherance of itsobjective.


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MIGAS STRATEGY

Its strategy is to attract investors and private

insurers into difficult operating environments It insures investments in the areas where they can

make the greatest differenceo Countries eligible for assistance from the

International Development Association (theworlds poorest countries)o Conflict-affected environmentso Complex deals in infrastructure and extractive

industries, especially those involving project

finance and environmental and socialconsiderations

o South-South investments


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Types of Non Commercial Risks

Currency inconvertibility and transfer restriction

Expropriation

War, terrorism, and civil disturbance

Breach of contract

Non-honoring of sovereign financial obligations


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INSURANCE COVERAGE

Benefits that investors and lenders have:

Deterring harmful actions

Resolving disputes

Accessing funding

Lowering borrowing costs

Increasing tenors

Providing environmental and social expertise


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Eligibility

Criteria for corporations and financial institutions

Criteria for state-owned company

Criteria for non-profit organization


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Terms & Conditions

Pricing

Duration of guarantee

Coverage


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Underwriting Process

Definitive Application and Client Documentation

Underwriting Fees

Review, Disclosure, and Due Diligence by MIGA


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Accountability

Environmental and Social Safeguards

o Derived from our extensive experience insuringinvestments around the world Category A if it may have potentially significant

adverse social or environmental impacts that arediverse, irreversible, or unprecedented

Category B if it may have potentially limited adversesocial or environmental impacts that are few innumber, generally site specific, largely reversible, andreadily addressed through mitigation measures

Category C if the project has minimal or no adversesocial or environmental impacts, including certain

financial intermediary projects with minimal or noadverse risks

Category FI is assigned to all financial intermediaryprojects excluding those that are Category C projects


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Accountability

Institutional Integrity

o Combating Fraud and Corruption in MIGA-Supported Projects Checks of involved parties Clients safeguards for dealing with fraud

and corruption The project structure and contractualarrangement.

o MIGAs objective is to ensure a fair, transparent,

and rational way to evaluate allegations of

misconduct in any MIGA project


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Accountability

Information disclosure

o Project Informationo Summaries of proposed guarantees

(SPGs)o Environmental and Social Review

Summarieso Institutional information


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Accountability

Independent Evaluation Group

o IEG is charged with evaluating the guaranteeprojects and services

o The Director-General of IEG reports directly tothe World Bank Group's Board of Directors

o

The goals of evaluation are to provide anobjective assessment of the results of the BankGroups work and to identify and disseminate

lessons learned from experience


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Accountability

Compliance advisor

o As the independent recourse mechanism forIFC and MIGA, CAO helps address theconcerns of communities who believe they areaffected by IFC/MIGA projects with the aim of

improving social and environmental outcomeson the ground..


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MIGA and India

India joined MIGA in 1993

MIGA offers insurance product for SMEs in India MIGA helps Indian investors in expanding their

business abroad Projects invested by MIGA in India are:

o

Motorola, Inc.o Aarti Steel Nigeria Ltd.


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MIGAs future plans

Constant endeavor towards the expansion,

modernization and financial restructuring of itsexisting projects

Be innovative and flexible in mobilizing its partnersto increase the availability of political risk insurance

for countries and clients To increase capital in its future activities Face challenges ahead of them in terms of

investment promotion


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Be Insured!!!


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Documents

MIGa Final Copy