Political Risk Insurance and Credit Enhancement Solutions...TMB-Ayesa-Inelectra O&M Contract Line 1 Metro Project Metro de Panama S. A. (Operator) Project: Construction of first line

Political Risk Insurance and Credit Enhancement Solutions

April 2016

1 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

1. MIGA in the World Bank Group 2. MIGA’s Product Lines 3. MIGA Guarantee Examples

3.1 Political Risk Insurance 3.2 Credit Enhancement

4. MIGA’s Value Added 5. MIGA’s Performance Appendix

• MIGA Underwriting Process • Other Project Examples • Award-Winning Projects


World Bank Group

IBRD International Bank for Reconstruction and Development

IDA International Development Association

MIGA Multilateral Investment

Guarantee Agency

Support countries’

economic and

institutional development

Governments of member

countries with annual per

capita income of less than

$1,025

- Technical Assistance

- Interest-Free Loans

- Policy Advice

Promote cross-border

investment and lending

Debt and equity investors in

member countries

- Political Risk Insurance

- Credit Enhancement

Est. 1945 Est. 1960

IFC International Finance Corporation

Promote private sector

development

Investors in member

countries

- Equity/Quasi-Equity

- Long-Term Loans

- Advisory Services

Est. 1956 Est. 1988

Role:

Clients:

Products:

Support countries’

economic and

institutional development

Governments of member

countries with annual per

capita income between

$1,025 and $6,055

- Technical Assistance

- Loans

- Policy Advice

Shared Mission: “End extreme poverty and build shared prosperity”


Political Risk

Insurance

Currency Inconvertibility and Transfer Restriction Cover

MIGA’s Product Line

Breach of Contract Cover

Expropriation Cover

Non-honoring

of Financial Obligations

Sovereign

Sub-sovereign

War and Civil Disturbance Cover

State-owned enterprise


Eligible Investments

• Equity • Shareholder loans • Non-equity direct investment (e.g. management

contract, EPC contracts) • Non-shareholder loans (bank loans) • Other forms of medium or long-term investment (e.g.

bonds), subject to Board approval by special majority All investments must meet MIGA’s environmental and

social criteria and support the host country’s development strategy


EPC Contract Basic Transaction Structure

Investor Commercial

Bank

Host

Government

EPC

Contract

Performance Bond

Investment

Project

Host Country


EPC O&M contract

Govt. of Honduras through

COALIANZA

Concession Agreement

Grodco Prodecon

Project: Rehabilitation of 220km of roads and reconstruction of bridges.

30-year concession agreement with a minimum revenue guarantee from the State.

Financing: 15yr USD 145M of debt.

MIGA cover • Against the risks of TR, Expro,

WCD, BoC. • Debt: 15yr, USD 115M cover to

JPMorgan and CIFI. • Equity: 20yr, USD 60M cover to

Grodco. • Both issued 2015.

JPMorgan, USA

Ficohsa, Honduras

Equity Debt

Prodecon, Colombia

Grodco, Colombia

Grodco, Costa Rica

ADASA

Direct Agreement

CIFI, Panama

Political Risk Insurance – Expropriation, Currency Inconvertibility and Transfer Restriction, War and Civil Disturbance, Breach of Contract Cover Autopistas del Atlantico S.A. en C.V., Honduras

Guarantee holder

Project enterprise Obligor


Power Purchase Agreement

Non-Honoring of Sovereign Financial Obligations Ashuganj South Power Generation Project, Bangladesh (Buyer Credit Facility)

Project: Construction of the 450MW gas-fired combined cycle Ashuganj Power Plant

Debt financing arranged by HSBC and consisting of ECA tranche (Hermes, ONDD and CESCE) & MIGA-covered tranche

MIGA Cover:

• Amount: $251m

• Tenor: 13 years

• Issued: December 2012

APSCL

Ashuganj South Power Project

Subcontractors

EPC Contractors (Consortium)

BPDB (Power Utility)

Petrobangla (Gas Utility)

Gas Sales Agreement

Commercial Facility

Agreement (Debt

Financing)

HSBC Swap Agreement

Intercreditor Agreement

Government of Bangladesh – MOF

HSBC and Participating Banks

Obligor Guarantee holder Project

EPC Contract


Loan

Government of Panama – Secretariat

of the Metro

Citi BTMU Mizuho

Citi (Guaranteed by COFACE, CESCE);

Andean Dev. Corp; GoP Cash & T Notes

EPC Contractor

Line One Consortium EPC Contract

O&M Contractor

TMB-Ayesa-Inelectra O&M Contract

Line 1 Metro Project

Metro de Panama S. A. (Operator)

Project: Construction of first line of Panama metro-rail, connecting northern and southern Panama City

MIGA Cover

• Amount: $320 million

• Tenor: 12 years

• Issued: June 2012

Loan

Non-Honoring of Sovereign Financial Obligations Panama City Metro Project, Panama (Buyer Credit Facility)

Obligor Guarantee holder Project


Strong pre-claim management

Highly rated

Financially stable

Strong Risk Appetite

Environmental and social risk mitigation

• Management of risks at pre-claim level (100+ pre- claims

among over 800 projects. Two claims paid for expropriation, six for war and civil disturbance)

• Leveraging the World Bank network

• Highly rated multilateral by Basel Committee • Reduce risk weighting and capital provisioning

• Strong capital base • Mobilize reinsurance capacity

• Operates in challenging markets • Longer tenors (15 years)

• Best practices in environmental and social standards

MIGA’s Value Added


MIGA’s New Guarantee Issuance (US$ billion in fiscal year)

1,5

2,1

2,7 2,8

3,2

2,8

2010 2011 2012 2013 2014 2015 2016 July-March

3.6


Supported more than 800

projects in 109 countries

MIGA’s Gross Exposure (US$ billion in fiscal year)

5,3

6,5

7,3 7,7

9,1

10,3 10,8

12,4 12,5

2007 2008 2009 2010 2011 2012 2013 2014 2015

14.3

2016 July-March


Underwriting Process

Preliminary Application

Definitive Application (fees apply)

Initial Screening Meeting

Underwriting • Analysis of development impact • Environmental and social review • Integrity checks • Economic, financial viability assessment • Pricing and reinsurance

Monitoring/Evaluation

Second Internal Review Meeting

Board Approval

Contract Preparation & Signing

Host Country Approval

Public Disclosure

Investor


MIGA Contacts

Senior Management Team, Washington DC

Keiko HONDA Executive Vice-President and CEO +1 202 473 2503 [email protected]

Karin M.FINKELSTON Vice-President and COO +1 202 473 7768 [email protected]

Sector Managers, Washington DC

Marcus WILLIAMS Energy and Extractive Industries (acting) +1 202 473 1023 [email protected]

Olga SCLOVSCAIA Finance and Capital Markets +1 202 458 2823 [email protected]

Carlo BONGIANNI Infrastructure (Telecom Transport and Water) +1 202 473 4615 [email protected]

Nabil FAWAZ Agribusiness and General Services +1 202 473 8437 [email protected]

MIGA Hubs - Asia and Europe offices

Ana-Mita BETANCOURT Director and General Counsel +1 202 458 7124 [email protected]

Santiago ASSALINI Director Finance and Risk +1 202 458 5060 [email protected]

Tim HISTED Head – South and Southeast Asia +1 852 2509 8163 [email protected]

Jae Hyung KWON Head – North Asia +82 (0) 32 713 7020 [email protected]

Dan BILLER Co-Director (acting) Economics and Sustainability +1 202 473 3037 [email protected]

Elena PALEI Head – Europe Hub +33 1 40 69 31 58 [email protected]

Muhamet FALL Director (acting) Operations +1 202 458 2695 [email protected]

Yasser IBRAHIM Co-Director (acting) Economics and Sustainability +1 202 473 8645 [email protected]


Award-Winning Projects Guaranteed by MIGA

African Power Deal of the Year 2012 Azito Thermal Power Plant & Expansion, Côte d’Ivoire

Deal of the Year 2014 São Paulo Sustainable Transport, Brazil

Deal of the Year 2013 Cambambe Hydropower, Angola

Americas Deal of the Year 2013 Panama Metro Line One

Asia- Pacific Deal of the Year 2012 Ashuganj Power Station, Bangladesh

Deal of the Year 2012 Passenger-Car Ferry TANIT, Tunisia

Deal of the Year 2012 Istanbul Metro

Best Deals of the Year 2015 Oyu Tolgoi, Mongolia

Multi-Sourced Financing 2015 Azura-Edo, Nigeria

Best Asia-Pacific Deals of the Year 2015 Mira Power Ltd. (Gulpur Hydro), Pakistan

Power Deal of the Year 2012 Azito Thermal Power Plant & Expansion, Côte d’Ivoire

African Transport Deal of the Year 2012 Henri Konan Bedié Bridge, Côte d’Ivoire

Best Infrastructure Financing: Central America 2015 Corredor Turistico, Honduras

Beyond Business Awards 2012 Chayton Atlas Investments, Zambia

Deal of the Year 2015 Senegal Swap 2

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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

April 2016
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Documents

Political Risk Insurance and Credit Enhancement Solutions...TMB-Ayesa-Inelectra O&M Contract Line 1 Metro Project Metro de Panama S. A. (Operator) Project: Construction of first line