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MIGA's Capital Stock Doubled: Major Increase in Ability to Facilitate Foreign Investment in Developing Countries

Washington, D.C., April 7, 1999 — The Multilateral Investment Guarantee Agency (MIGA) today announced the approval of a doubling of its capital resources. In a move to complete the two-part funding package totaling US$1 billion, the Agency's Council of Governors, comprising the Finance Ministers and other appointed representatives of its 149 industrialized and developing shareholder countries, approved a US$850 million capital increase by a special majority vote. This will increase MIGA's capital and reserves to more than US$2.0 billion1 .

The funding package will boost MIGA's ability to substantially increase its guarantee services to foreign investors interested in investing in the Agency's 127 developing member countries.

This move follows a landmark increase in the amounts of political risk insurance that MIGA may issue per project, from US$75 million to US$200 million, and per host country, from US$350 million to US$620 million. The recent capital increase will allow MIGA to expand these levels further in the future.

MIGA also recently entered into a series of collaborative arrangements with other insurers, through reinsurance and coinsurance arrangements, to increase the availability of its insurance coverage for investments in developing countries. These arrangements initiated a further expansion of MIGA's guarantee program in order to keep pace with the demand for its guarantee product and to better serve its clients needs.

Mr. Motomichi Ikawa, Executive Vice President of MIGA, said: "I deeply appreciate our shareholders' support of MIGA's operations and for the recent progress the Agency has made on a number of major policy reviews. With the capital increase, MIGA looks forward to being able to increase its underwriting in the coming years beyond its current limits. This will greatly benefit both large and small investors as well the recipient developing member countries. This endorsement of MIGA's success by its Board of Directors and the Council of Governors marks a momentous start to a new chapter in MIGA's history."

1. This amount includes subscribed capital, retained earnings and general claims reserves. MIGA received the first part of the funding package, a US$150 million grant, from the International Bank for Reconstruction and Development (the World Bank) earlier in 1998.
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