MIGA’s Board Approves Enhancement and Ex-pansion to Agency’s Regulations
WASHINGTON, April 15, 2009—The Board of Directors of the Multilateral Investment Guarantee Agency (MIGA) has approved modifications to MIGA’s policies and operational regulations that will enable the agency to respond more effectively to market demand.
The twelve modifications endorsed by MIGA’s Board are intended to increase MIGA’s operational flexibility and to improve efficiency. They include one new area of coverage, enhancements to several existing areas of coverage, and clarifying and streamlining existing procedures.
“The urgency for institutional renewal is heightened given the turmoil in the financial markets and it is incumbent on the World Bank Group to be especially adaptive and responsive at this time” said MIGA’s Executive Vice President, Izumi Kobayashi. “These modifications will also aid MIGA in achieving greater development effectiveness, particularly in our areas of focus which include the world’s poorest countries, complex projects, promotion of South-South investments, and countries affected by conflict.”
The new area of coverage available to MIGA clients is the non-honoring of sovereign financial obligations. This coverage is intended to address the needs of investors and lenders who are hesitant to commit to a project due to concerns about the prospect of a prolonged arbitration process. MIGA’s existing breach of contract coverage will be enhanced by extending coverage to state-owned enterprises and to accommodate situations in which the investor does not have recourse to a dispute resolution forum, or legal proceedings are taking an unreasonably long time. War and civil disturbance coverage will also be enhanced to provide coverage for temporary business interruption.
Definitions surrounding eligibility for MIGA coverage have also been ex-panded and clarified. This will help MIGA extend the instances in which it can provide coverage and lead to reduced transaction costs for MIGA and its clients. MIGA has also clarified a number of procedural issues with respect to engaging prospective clients.