Agribusiness, Manufacturing, Services
We have extensive experience supporting projects in agribusiness, manufacturing, and services. At the close of fiscal year 2012 these sectors accounted for 15 percent of MIGA's gross exposure.
MIGA and Agribusiness, Manufacturing, and Services Investments
As with cross-border investments in many sectors, there are non-commercial risks associated with agribusiness, manufacturing, and services projects in emerging economies. Despite the best intentions and thorough planning, unforeseen events can disrupt projects. Newly stabilized governments could still be on shaky political ground. Unclear or incomplete laws on property ownership can obscure the profit picture. Restrictions on revenue repatriation could complicate a project’s finances even more, exacerbating imbalances between foreign-denominated debt and locally denominated revenue. Threats such as terrorism add another layer of uncertainty, potentially derailing even the most promising of investments. Combined, such political risks contribute to high costs of capital. Some lenders may not be willing to lend at all in the absence of political risk insurance policies.
MIGA’s political risk insurance can mitigate the political risks associated with investing in these sectors in developing countries. We can insure investments of all sizes. Our Small Investment Program, which offers a streamlined underwriting process for investors looking for coverage of less than $10 million, is particularly relevant in these sectors.
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