MIGA Launches New Facility for Conflict-Affected and Fragile Economies
Washington, June 28, 2013 – At a signing ceremony held with donors today in Washington, the Multilateral Investment Guarantee Agency (MIGA), the political risk insurance arm of the World Bank Group, launched its Conflict-Affected and Fragile Economies Facility. The Facility will use donor partner contributions together with MIGA’s guarantees to assume higher risk and insure more investment projects in conflict-affected and fragile economies. It will target high development impact projects that support economic growth and poverty reduction through job creation, infrastructure services, and access to financial markets.
Promoting jobs and livelihoods in these economies is a key priority for the World Bank Group. Since the Bank Group launched the World Development Report 2011: Conflict, Security, and Development, MIGA’s support for projects in in these economies has grown significantly.
The additional resources allocated by the Facility will enhance MIGA’s ability to work closely with the World Bank and the International Finance Corporation to promote the expansion of investment flows into conflict-affected and fragile economies. MIGA will also partner with donors, export credit agencies, insurance companies, and other multilaterals.
“Since 2010, we have tripled our exposure in fragile and conflict-affected economies. This new Facility will allow MIGA to further expand our operations in this area, a long-standing priority for us,” says MIGA’s Executive Vice President Izumi Kobayashi. “We are grateful to our initial donor partners, the Government of Canada and the Swedish International Development Cooperation Agency (Sida), for their support and look forward to the participation of more public and private donors to this Facility.”
“We are pleased to be supporting this Facility, which will help mobilize private sector investment into challenging environments. These efforts are closely aligned with the recent high-level panel report on the post-2015 agenda, which calls for increased focus on conflict-affected countries.” says Sida Deputy Director General Bo Netz. “There are more than 1.5 billion people living in countries or territories experiencing conflict and fragility, so the need for investment that will help these countries rebuild is urgent.”
Canada’s support for the Facility is underpinned by its focused efforts to encourage more private sector-led development. “This initiative is another example of how Canada can help stimulate private-sector led sustainable economic growth that allows people to move from a position of fragility or conflict to one of prosperity,” said Julian Fantino, Canada’s Minister of International Development. “The Facility will promote business growth, and in turn create jobs and generate tax revenues that fund social services and public infrastructure.”
The Facility comprises a CAD 20 million first loss grant from the Government of Canada, a US$10 million first loss grant from the Sida, and US$30 million of second loss guarantees from Sida. MIGA will complement this by providing US$20 million of first loss guarantees as well as providing significant excess loss guarantees. MIGA anticipates that the Facility will be able to crowd-in significant levels of private political risk insurance. As a result, MIGA expects to provide aggregate risk mitigation of US$ 400 million in conflict-affected and fragile economies over the next four to five years. The Facility’s impact is expected to be substantially in excess of this amount over its twenty-year life.
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