MIGA and Korea Eximbank team up to Promote Investment in Developing Countries
WASHINGTON, DC, March 1, 2010 — The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, and Korea Eximbank, will cooperate to promote private sector investment in developing countries and have signed a Memorandum of Understanding (MoU) to that effect.
The MoU was signed by MIGA Executive Vice President Izumi Kobayashi and by Korea Eximbank Chairman and President Dongsoo Kim at MIGA’s headquarters in Washington, DC.
The aim of the MoU is to strengthen cooperation between MIGA and the Korea Eximbank in promoting foreign direct investment into developing countries and support Korean outward investment. The MoU will also facilitate general cooperation in specific projects where both MIGA and the Eximbank are involved. This partnership will enable the two institutions to work closely on, among other things, mitigating political (or non-commercial) risks in developing countries.
Kobayashi welcomed the expanding relationship between MIGA and the Korea Eximbank. “Ensuring close and effective cooperation between international financial institutions is a key priority, especially as the economic recovery takes hold following nearly two years of economic turmoil. The Korea Eximbank and MIGA can provide mutual assistance to promote private investment into developing countries that can facilitate job creation and future growth opportunities.”
Kim said “Foreign direct investment plays a crucial role in economic growth of developing countries while providing business opportunities for developed countries. I hope that the MoU between MIGA and the Korea Eximbank will contribute to promoting foreign direct investments and sustainable growth in developing countries. With an increase in Korean firms’ overseas investment in developing countries, particularly in the development of natural resources, and construction of infrastructure, the strengthened cooperation with MIGA will greatly facilitate the Bank’s financial support for the overseas activities of Korean firms.”
MIGA provides insurance against political risks for eligible investments made by investors from a MIGA member country into a developing member country. The types of investments the agency can cover include equity, shareholder loans, certain non shareholder loans, certain shareholder loan guarantees, management contracts, asset securitisations, capital market bond issues, and leasing, services, franchising and licensing agreements. Projects supported by MIGA have a strong developmental impact through job creation, skills and technology transfer and assisting countries to tap natural resources in an environmentally sustainable way. Specifically, they provide water, electricity, and other basic infrastructure, generate tax revenues and help strengthen financial systems.
The Korea Eximbank provides a broad range of loans, guarantees, and other financial services in order to facilitate Korean firms’ overseas activities. For the overseas investments, it provides investment loans, guarantees, and equity investments. Entrusted by the Ministry of Strategy and Finance, it also acts as an official central agency for the collection, production, and analysis of statistical data related to Korea’s outward investments since 1999.
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment into emerging economies to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance (guarantees) to investors and lenders, covering risks including expropriation, breach of contract, currency transfer restriction, war and civil disturbance, and non-honoring of sovereign financial obligations. MIGA works actively with investors and host countries, helping to resolve disputes before they reach a claims situation. The agency also offers technical assistance to its member countries and provides free online investment information and knowledge services. Since its inception, MIGA has supported 600 projects in 100 developing countries, totaling more than $21 billion in coverage. MIGA’s gross exposure stands at $7.5 billion. For more in-formation visit www.miga.org
The Korea Eximbank is an official export credit agency providing comprehensive export credit and guarantee programs to support Korean firms in conducting overseas business. Since its establishment in 1976, the Bank has actively supported Korea’s export-led economy and facilitated economic cooperation with foreign countries. Korea Eximbank’s primary services include export loans, trade finance, and guarantee programs structured to meet the needs of clients engaged in overseas business. The Bank also provides overseas investment credit, import credit, and information services related to business opportunities abroad. For more information, visit www.koreaexim.go.kr.
Mallory Saleson, MIGA
Tel: +1 202 473-0844
Rebecca Post, MIGA
Tel: +1 202-473-1964
Rene Jo, Korea Eximbank
Tel: +82 2 3779 6388