World Bank’s MIGA Open for Business in Iraq, Insures First Investment
WASHINGTON, DC, October 14, 2010—The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance arm of the World Bank Group, today underscored its commitment to supporting investment into Iraq with an announcement of its first contract of guarantee for the country. The guarantee of $5 million backs a Turkish investment into a Baghdad plant that manufactures polyethylene terephthalate (PET) preforms, the raw material used to manufacture bottles for the beverage industry.
“The investment will help Iraq reduce its reliance on imports,” says MIGA’s underwriter for the investment, Noureddin Ennaboulssi. “Currently, nearly all PET preforms are imported from neighboring countries.” MIGA’s guarantee is covering a shareholder loan by Karo Dis Ticaret ve Sanayi Ltd. of Turkey into the project company, Sebeel Al Safa Manufacturing Petrochemicals and Water Filling Company. The guarantee was issued under MIGA’s Small Investment Program, and provides coverage against the risks of currency inconvertibility and transfer restriction, expropriation, and war and civil disturbance.
Esra Pelitozu, Director of Karo Dis Ticaret ve Sanayi Ltd. says that MIGA’s support for the investment was instrumental in making the project a reality. “The fact that we were seeking a MIGA guarantee helped sig-nificantly in the negotiations with a number of counterparties including the machinery manufacturers, government authorities, and raw material suppliers. It showed that the project is serious and reliable.”
Iraq became a member of MIGA in 2008. The agency’s support to the country is guided by the World Bank Group’s interim strategy for Iraq, which calls for broad-based private-sector-led growth. MIGA’s support also highlights the agency’s commitment to supporting investment into conflict-affected and fragile states.
“This is a small project, but it represents an important step for both Iraq and MIGA,” says Nabil Fawaz, MIGA’s Global Head for Agribusiness, Manufacturing, and Services. “We are committed to supporting pri-vate sector development as the key driver of job creation. I hope this sends a signal to investors that Iraq is open for business, and that we are here to help developmentally sound investments—both small and large—become a reality.”
MULTILATERAL INVESTMENT GUARANTEE AGENCY
A Member of the World Bank Group
1818 H Street, NW, Washington, DC 20433
Mallory Saleson, MIGA
Tel: +1 202 473-0844
Rebecca Post, MIGA
Tel: +1 202-473-1964
Cara Santos Pianesi