MIGA Provides Record $2.8 Billion in Coverage for Investments into Developing Countries
WASHINGTON, DC, September 18, 2013 —The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance and credit enhancement arm of the World Bank Group, announced today that it issued a record $2.8 billion in coverage during the fiscal year ending June 30, 2013. Well over half of the new issuance supported transformational projects, including critical infrastructure investments in developing countries. MIGA also insured investments in job-creating manufacturing enterprises and financial institutions in riskier markets. (See MIGA’s 2013 Annual Report, which launched today.)
The Agency’s support for investments in sub-Saharan Africa continued to grow, doubling over the previous year and representing over half of new issuance this year. Energy projects that will help address the continent’s power generation deficit and improve access to electricity accounted for the majority of MIGA’s new exposure in the region.
In addition to significant volume in sub-Saharan Africa, MIGA continued to see strong demand in the Middle East and North Africa. Since the onset of the Arab Spring, MIGA has made a concerted effort to reach out to investors targeting the region to maintain and encourage foreign direct investment in this period of transition.
MIGA supported investments in the energy and manufacturing sectors in Latin America and Asia this year, including a wind farm in Nicaragua and a packaging manufacturing project in Pakistan, among others.
Many of the projects MIGA insured this year are transformational for the host countries. For example, in Côte d’Ivoire MIGA’s guarantees in support of two investments will mitigate the risk of equity and commercial bank financing for energy—with a major impact on job creation, competitiveness, and growth.
In addition, robust uptake of MIGA’s non-honoring of financial obligations cover by lenders has allowed the Agency to assume a significant role in facilitating private debt financing of public infrastructure projects. This credit-enhancement application of MIGA’s guarantees offers a new tool to bridge the gaps in infrastructure financing. Examples this year include MIGA’s support to power in Angola and Bangladesh, as well as transportation in Turkey.
MIGA tripled the Agency’s exposure in conflict-affected and fragile countries in the past three years and this year supported projects in Afghanistan, Angola, Côte d’Ivoire, Libya, Sierra Leone, and the West Bank and Gaza. In addition, MIGA launched its Conflict-Affected and Fragile Economies Facility that will use donor contributions together with MIGA guarantees to insure even more investment projects in places affected by conflict.
“Underlying our continued strong business results is a very compelling development story,” said Keiko Honda, MIGA’s Executive Vice President. “MIGA backstops investments that bring power, transportation, and more efficient technologies into countries with the greatest need.” She added, “At a time of continued fiscal strain, we’re seeing that governments are keen to partner with the private sector in order to achieve their development goals. Both our clients and our member countries are calling on us to support this trend, and we are responding to these demands.”
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