report under the task force on climate-related financial disclosures

This report is MIGA’s first disclosure under the guidelines recommended by the Task Force on Climate-related Financial Disclosures (TCFD). It comes at the end of the landmark World Bank Group (WBG) Climate Change Action Plan 2016–2020 and follows the adoption in June 2021 of the WBG Climate Change Action Plan 2021–2025, which is shaping the WBG’s climate action agenda for the next five years.

As part of MIGA’s efforts under the Action Plan, MIGA is adopting the disclosure recommendations of the TCFD to more effectively communicate its climate strategy, internal procedures for climate change management, and potential climate-related risks and opportunities. This report should be viewed as an initial disclosure, noting that MIGA’s climate change management structures, policies, and procedures are currently evolving and undergoing enhancements to meet the ambition of the new Climate Change Action Plan. The report reflects MIGA’s continued commitment to maintain and strengthen our climate-related disclosures across all aspects of our mission and to continue this journey in future TCFD-related disclosures.

The TCFD’s recommendations on climate-related financial disclosure are structured around four core elements (see figure 1), and this report takes these core elements as its organizing principles.

Figure 1. Core Elements of TCFD Disclosure Recommendations

Core Elements
All aspects of MIGA’s climate business and internal climate change management procedures are overseen by MIGA’s Executive Vice President (EVP), who reports to the President of the World Bank Group (WBG). The WBG President sets the overall ambition on climate action for the WBG and is selected by the IBRD, IDA, IFC, and MIGA Boards of Directors. MIGA’s Board of Directors, comprising 25 representatives from MIGA’s member countries, are responsible for approving all of MIGA’s climate business operations, policies, and overall governance structures. Notably, over the past year, the MIGA Board of Directors endorsed a new climate finance target and a Paris Agreement alignment target, which will drive MIGA’s climate business and climate change management procedures over the next five years. MIGA reports its progress on climate activities to the MIGA Board of Directors as part of the quarterly EVP Board Reports. Separately, the WBG reports progress on the Action Plan annually to the Board of Executive Directors. The WBG corporate scorecard will also report annually on key high-level climate indicators such as climate finance. (For further details, see the “Metrics and Targets” section below.)

Vice Presidential and Departmental Leadership

Under the responsibility of MIGA’s EVP are two Vice Presidents: The Vice President & Chief Operating Officer oversees the Operations departments, which are mandated to seek opportunities to grow MIGA’s climate business. The Vice President & Chief Risk, Legal and Administration Officer oversees three MIGA departments: (a) Finance and Risk Management, (b) Economics and Sustainability, and (c) Legal Affairs and Claims. The Economics and Sustainability department is mandated to provide climate analytics and technical expertise to MIGA’s climate business; contribute to WBG climate analytics and strategy; support the development of MIGA’s climate business; and evaluate, monitor, and report on MIGA’s climate activities. MIGA’s Vice Presidents also participate in various WBG formal and informal groups that review major WBG initiatives, strategies, policies, and targets—including those pertaining to climate—before submission to the Board of Directors.

The Director of Economics and Sustainability (under the supervision of the Vice President & Chief Risk, Legal and Administration Officer) oversees the Sustainability and Climate Unit, which works with MIGA’s operations management and staff, as well as clients and businesses, to address environmental and social risks and the impacts of climate change to foster sustainable practices in all MIGA operations. The unit includes a team of climate change specialists who are responsible for evaluating all new business for climate mitigation and adaptation finance opportunities; conducting climate risk analysis and greenhouse gas (GHG) accounting; and providing inputs for carbon pricing analysis, environmental and social project due diligence, development impact assessments, and climate-related commitments in legal contracts. The team of climate change specialists also actively monitors the existing portfolio of projects against climate requirements and commitments made at the approval stage. In addition, MIGA participates in several joint working groups with other multilateral development banks (MDBs) on opportunities for harmonizing approaches related to MDB climate activities.

The Vice President & Chief Operating Officer oversees all guarantee operations at MIGA. Two operations departments are under his leadership: (a) Infrastructure, Manufacturing, Agribusiness, Services (MAS) and Trade Finance; and (b) Climate, Energy, and Finance. The latter formulates MIGA’s strategy and implementation plans at the agency, sectoral, and regional levels to grow MIGA’s climate finance origination and business and to foster MIGA’s climate objectives. Both operations departments work to drive and innovate MIGA’s products and product applications, achieve business targets (including climate finance targets), and grow MIGA’s guarantee business in climate activities.

Strategy, Policy and Project Review Process

MIGA’s strategies, policies, and projects are reviewed by the MIGA Management Team (MMT), which includes MIGA’s Directors, Vice Presidents, and Executive Vice President. The MMT reviews all guarantee projects to be supported by MIGA in two stages:

  1. Before the Early Screening Committee, chaired by MIGA’s EVP, the MIGA project team presents the project rationale and determination of the potential for alignment with MIGA’s mandate and policies and provides guidance to the project team for due diligence. Climate finance opportunities are flagged at this stage, as are whether the project advances, hinders, or is neutral to the attainment of the principles and goals of the Paris Agreement (“Paris Aligned”) as well as any climate resilience concerns or opportunities.
  2. Before the Project Review Committee, in a decision meeting chaired by MIGA’s EVP, the project team presents the full evaluation of the project, including climate finance volumes; climate risks to project performance; any avoided GHG emissions or climate mitigation benefits of the project; whether the project is Paris Aligned and the project’s consistency with MIGA’s Sustainability Policy and MIGA’s Environmental and Social Performance Standards, and its development impact, among many other aspects of the project. If a project is approved at this stage, the project will then proceed for approval to MIGA’s Board of Directors, further to the delegated authority from the WBG President to MIGA’s EVP.

MIGA’s report to the Board includes climate information pertaining to the project, such as whether it has a climate finance component. All individual projects supported by MIGA are either approved by the Board of Directors directly or under specific authority delegated by the Board to MIGA’s management. MIGA’s Board of Directors can seek clarification from MIGA, including potential climate risks to projects, opportunities to maximize climate finance by enhancing the climate mitigation or climate adaptation benefits yielded, and the project’s alignment with the Paris Agreement.


Increasing MIGA Support to Cross-Border Climate Finance Investments

MIGA’s political risk insurance and credit enhancement products have helped cross-border investors to protect their long-term investments in climate mitigation and climate adaptation activities across diverse markets and regions. As one of the few multilateral institutions that provides long-maturity guarantees, MIGA is instrumental in fostering the lock-in of transformational climate action. In FY21, MIGA issued about US$1.35 billion of guarantees supporting climate change mitigation or adaptation in 22 countries across four regions, representing 26 percent of its guarantee issuance, up from only 7 percent five years ago.

Implementing the Climate Change Action Plan

The WBG Climate Change Action Plan (CCAP) 2021–2025 aims to advance the climate change aspects of the WBG’s Green, Resilient, and Inclusive Development (GRID) approach, which views poverty eradication and shared prosperity through a sustainability lens. The Action Plan reflects WBG support to public and private sector clients to maximize the impact of climate finance, aiming for measurable improvements in adaptation and resilience and measurable reductions in GHG emissions. It also considers the vital importance of natural capital, biodiversity, and ecosystems services. The CCAP 2021–2025 represents a shift toward accelerating the ramping up of climate finance while pursuing broader development objectives through the GRID approach.

Climate change is a priority area in MIGA’s strategy along with support for low-income (IDA-eligible) countries and countries facing fragility, conflict, and violence (FCV). MIGA’s climate strategy reflects the ambition of the commitments made in both the WBG CCAP 2021–2025 and MIGA’s Strategy and Business Outlook (2021–2023) to deepen its impact as countries recover from the COVID-19 pandemic. MIGA’s commitments under the new WBG CCAP 2021–2025 include:

  • Increasing the share of MIGA guarantees toward climate mitigation and adaptation to an average of 35 percent of MIGA’s overall business over 2021–25
  • Working with the World Bank and IFC to produce the WBG’s own dedicated country climate and development diagnostic, the Country Climate and Development Report (CCDR), which will help countries align their climate action and development agendas while analyzing key mechanisms by which climate change is affecting the country and key features of the economy that are affecting climate
  • Mobilizing more private capital toward climate action through innovative applications of MIGA’s political risk insurance and credit enhancement products in high-climate-impact sectors
  • Aligning MIGA’s financial flows with the low-carbon and climate-resilient objectives of the Paris Agreement by (a) ensuring that 85 percent of Board-approved real sector operations are aligned with the goals of the Paris Agreement starting in July 2023 and 100 percent starting in July 2025 (which will require beginning to align 100 percent of MIGA’s projects at the concept stage well ahead of July 1, 2023); and (b) applying a methodology for financial institutions and funds, once finalized, to this business line in a similar manner
  • Helping to drive private sector investments into resilience and climate adaptation by integrating climate into its country risk assessment work and screening all proposed MIGA guarantees for physical climate risks by the end of FY23

MIGA continues to focus on five key strategic areas for its climate business: clean energy, climate-smart agribusiness, green buildings, public transportation, and green finance. This focus will entail assessing opportunities to enhance low-carbon and climate-resilient development pathways by evaluating both physical and transition climate-related risks in these sectors to limit climate change impacts at the country level, which will be critical to achieving the WBG’s twin goals of reducing poverty and boosting shared prosperity.

To those ends, MIGA will continue to search for new market opportunities in the following areas:

  • Cities: MIGA will aim to scale up its green building business, both through de-risking of asset owners directly and through financial intermediaries by increasing the use of green mortgages and green construction finance. MIGA will support our clients to adopt circular economy approaches to advance climate, development, and broader sustainability goals.
  • Transportation: MIGA will support investments in energy efficient equipment and infrastructure, particularly in rail, ports, and airports.
  • Manufacturing: MIGA will help the manufacturing sector to accelerate a path toward decarbonization via resource efficiency and low-carbon solutions. By providing de-risking products, MIGA will support clients to implement proven abatement measures and innovative technologies. MIGA will apply three principles to investments across heavy manufacturing industries: (a) not supporting new coal-fired power projects or wet process in cement; (b) differentiating the sustainability and climate “bar” for supported investments based on the development stage of client countries while also promoting progressive transitional sustainability improvements where absolute sustainability is not yet achievable; and (c) assessing the sustainability and climate-related drivers in projects, such as energy sources and alternatives, materials used and alternatives, products produced and alternatives, and process technology, striving for best-in-class production processes
  • Nature-based solutions: MIGA will scale up private sector investments that integrate climate risk management measures and support resilience and adaptation. Therefore, nature-based solutions are key to developing sustainable business models that consider biologically diverse ecosystems and protect biodiversity. In support of these efforts, MIGA is integrating ecosystem services valuation into its climate risk screening framework. The approach will allow MIGA to demonstrate to its clients the costs and benefits (avoided losses) yielded from the protection of natural capital.
  • Climate-smart agriculture: MIGA will increase its support for sustainable agribusiness transactions by supporting investors in de-risking private financial flows and climate finance to agribusiness operations and interconnected value chains. Moreover, MIGA will emphasize the adoption of climate-smart techniques that increase resilience to climate-related shocks, raise awareness about identifying and managing climate risks, and propose GHG emissions accounting methodologies tailored to our clients.
  • Energy: MIGA will seek to scale up its renewables portfolio by maximizing private sector participation in utility-scale solar, wind, hydropower, and geothermal opportunities. MIGA will continue to strive to develop innovative ways for its guarantees to support micro- and off-grid solutions that can accelerate electrification to underserved communities, specifically in IDA-eligible countries and in those affected by FCV.

A just transition away from coal is crucial to achieving the goals of the Paris Agreement. MIGA, in collaboration with the World Bank and IFC, will work with our clients to support the phaseout of coal, including through innovative financing or de-risking instruments and incentives. The transition away from coal must be done justly, with due attention to people and the distributional effects.

MIGA is also prioritizing the use of its guarantee products to support the greening of financial intermediaries (FIs), with a focus on promoting climate-friendly sustainable financing practices. MIGA’s engagement with FI clients is serving to direct the use of proceeds of MIGA-supported finance—or the capital relief facilitated by MIGA’s capital optimization product—toward climate adaptation and mitigation investments while also helping to strengthen clients’ climate risk strategies whenever possible. In addition, MIGA will no longer support FI clients that do not have a plan to phase out their investments in coal and coal-related projects over an agreed period of time, but no later than 2030, and will support its FI clients in developing disclosure frameworks

MIGA will also help FI clients to green their portfolios, grow their climate finance business, and mainstream climate risk assessments, including by (a) evaluating the clients’ existing capacity and providing guidance on organizational constraints and knowledge gaps related to climate change management; (b) evaluating the clients’ existing portfolio of investments and helping them identify climate finance opportunities; (c) supporting clients in developing relevant climate-related policies and low-carbon and climate-resilient development trajectories; (d) conducting capacity building centered on tools and methodologies to facilitate better carbon and climate risk management; and (e) providing guidance on enhanced climate-related financial disclosures, including supporting and adopting the TCFD recommendations.

project highlight: climate and rural roads in kenya

Kenya’s transportation sector is relatively underdeveloped in some regions, thereby limiting economic development and contributing to regional disparities. In FY21, MIGA provided US$211.6 million in guarantees to cover equity and loans for the design, construction, rehabilitation, and maintenance of over 80 kilometers of rural and peri-urban roads in 10 counties in central and western Kenya.

Because flooding is a prevalent concern in these regions, a climate risk analysis was performed for the roads. An ensemble of climate change projections was reviewed, and it was evident that a significant increase in the frequency and intensity of extreme rainfall events is likely for the region over the near-to-mid term. Since built infrastructure, like roads, often alters a region’s hydrological regime and can exacerbate flood risks, leading to detrimental impacts on neighboring communities, climate resilience measures were required to ensure the performance of the roads and to limit any adverse impacts to communities.

Working with the construction engineers, MIGA’s client approved construction of road drainage components to a 20-year design level rather than a 5- to 10-year design level, which is typical for roads of this class in Kenya. Specifically, this means, for example, that 1,200 millimeter (mm) pipe culverts, 600 mm access culverts, and 600 x 600 mm U-shaped drains will be constructed instead of the typical 900 mm pipe culverts, 300 or 450 mm access culverts, and 450 x 450 mm U-shaped drains. Adopting the incremental cost approach of the joint MDB climate finance methodology, up to 12 percent of the MIGA guarantees were tagged as climate adaptation finance.

Risk Management

MIGA’s approach to identifying, assessing, and managing climate risks is conducted in accordance with MIGA’s Policy on Environmental and Social Sustainability. Under this policy, all projects are screened against the requirements of the MIGA Performance Standards on Environmental and Social (E&S) Sustainability. For each project supported by MIGA, before Board approval, an Environmental and Social Review Summary that captures E&S risks (including climate-related physical and transition risks and mitigation options) is publicly disclosed according to MIGA’s Access to Information Policy. The disclosure period varies by the nature of the risks and expected impacts for a project, but is typically either 30 or 60 days.

Among the MIGA Performance Standards (PS), the climate-related risks are identified and addressed within PS1: Assessment and Management of Environmental and Social Risks and Impacts; and PS3: Resource Efficiency and Pollution Prevention.

Within PS1, climate-related physical risks that can affect the E&S performance of a project are identified, evaluated, and addressed. The assessment includes a description of climate change hazards from a review of climate model projections and observational datasets, climate-specific project vulnerabilities, and coping capacities or climate resilience measures being taken to limit any adverse climate-related impacts to and by the project. All real-sector projects in all regions are screened for climate risks. MIGA has developed an internal climate risk screening tool that extracts climate change projections from over 25 climate models and creates hazard projections for drought, flood, wildfire, tropical cyclones, extreme temperature, and wind. Hazard projections are provided for multiple climate scenarios and over multiple time horizons. The MIGA climate risk screening tool also includes a module to assess the potential impacts of climate hazards to the performance of a project.

Within PS3, climate-related transition risks are evaluated. Currently, this is limited to GHG accounting for Scope 1 and Scope 2 emissions generated by the project1 . Both gross and net GHG emissions are calculated, where net GHG emissions reflect the total avoided GHG emissions that result from the project through either energy efficiency gains or lower emissions profiles than the closest viable alternative to the project. Under the requirements of PS3, all projects that are expected to or currently produce more than 25,000 tons of carbon dioxide equivalent (tCO2e) annually must quantify and report to MIGA (a) the direct emissions from the facilities owned or controlled within the physical project boundary; and (b) the indirect emissions associated with the off-site production of power used by the project.

MIGA’s Contract of Guarantee typically includes an Environmental and Social Action Plan (ESAP) for projects for which PS gaps were identified during the project due diligence. Monitoring requirements are also included, and MIGA’s clients must submit Annual Monitoring Reports (AMRs) and status reports on the ESAP. In addition, MIGA staff may conduct periodic site monitoring visits to ensure compliance2.

MIGA also started piloting carbon pricing to address transition risks in the economic analysis for carbon- intensive projects. A carbon price is included in the economic analysis of MIGA projects that have a defined use of proceeds and where estimated annual project emissions exceed 25,000 tCO2e. The carbon price levels applied are in line with the 2016 report of the High-Level Commission on Carbon Prices and consistent with those used by the World Bank. Both low and high carbon values are used in project analysis. Carbon price levels depend on the host country income grouping as classified by the WBG, with low values starting at US$40 per tCO2e in 2020 and increasing to US$78 in 2050, and high values starting at US$80 in 2020 and reaching US$156 by 2050.

In addition, as part of MIGA’s efforts to address carbon risks and minimize its indirect exposure to coal-related projects, MIGA follows the WBG practice of not investing in greenfield coal power generation. In 2019, MIGA extended this practice to upstream oil and gas investments. In addition, MIGA does not support new loans to financial institutions for coal-related activities.

Metrics and Targets

Climate Change Targets

To build low-carbon and resilient business across sectors, MIGA continues to diversify its climate business and identify new areas of growth. Under the WBG’s second CCAP, 35 percent of MIGA’s gross issuance will consist of direct climate finance over the five-year period of 2021–25, on average. In addition, MIGA has made commitments for projects to be aligned with the low-carbon and climate-resilient development goals of the Paris Agreement following the Paris Alignment methodology developed jointly by the MDBs. MIGA will align 85 percent of Board-approved real sector operations starting July 1, 2023, and 100 percent of these operations by 2025. To be ready to meet these targets, MIGA, well ahead of the July 2023 target date, will need to begin aligning virtually 100 percent of our projects at the Early Screening Meeting stage. For MIGA’s support of financial institutions, MIGA is working with the IFC on the methodology and will join the IFC in announcing the timeline for alignment of these operations to the Paris Agreement in October 2021. This phased approach to Paris Alignment will help ensure that, working closely with our clients, we are well prepared to deliver projects that meet both the mitigation and adaption goals of the Paris Agreement while remaining true to our development mandate.

In FY21, direct climate finance accounted for 26 percent of MIGA’s total issuance through FIs (US$654 million), renewable energy (US$615 million), and infrastructure and agribusiness (US$78 million). This represents a significant increase in climate finance issuance, both in dollar terms and as a share of MIGA’s total issuance since FY16 (figure 2). MIGA’s climate finance supports projects that yield either climate change mitigation and/or climate change adaptation benefits. MIGA has backed climate finance projects across all of the regions covered by MIGA (figure 3). From FY16 to FY21, almost one third of MIGA’s climate finance supported projects were in Sub-Saharan Africa (figure 4).

MIGA reports the following indicators, at least annually:
  • Climate finance as a proportion of total gross issuance of guarantees (%)
  • Private mobilization toward climate finance
  • GHG emissions avoided (tCO2e/year)
  • GHG gross emissions (scope 1 and 2).

Figure 2. MIGA Climate Finance Issuance, FY16–FY21

Climate Finance

Figure 3. MIGA Climate Finance Issuance, by Region, FY16–FY21

Climate Finance by region

Figure 4. Regional Shares of Total Climate Finance Issuance across MIGA’s Client Countries, FY16–FY21

Regional ShareMarking

Development Impact

Highlights of MIGA supported projects’ anticipated results include:

  • Projects for renewable energy and energy efficiency, which are expected to result in over 10 million metric tons of avoided GHG emissions per year
  • Projects that provide over 22 million people with access to power generated from renewable sources
  • Projects that enable over US$545 million in finance for small and medium enterprises to engage in climate action.

MIGA developed its internal Impact Performance Assessment and Comparison Tool (IMPACT), which assesses and rates expected (ex ante) project-specific outcomes (including those related to environmental and climate outcomes) as well as beyond-the-project outcomes to provide positive demonstration effects to foreign investors (including those pertaining to environment and climate). Before approval, all projects are assessed and rated for expected development impact. Projects that support expected positive climate and environmental outcomes are expected to deliver better development outcomes and receive higher ratings than projects without these benefits.

Greenhouse Gas (GHG) Emissions and Footprint

MIGA continues to calculate and report GHG emissions avoided (tCO2e/year) and GHG gross emissions (scope 1 and 2). MIGA calculates gross GHG emissions for all real sector projects with emissions over 25,000 tCO2e. MIGA continues to disclose ex ante estimated annual gross GHG emissions through the publicly available Environmental and Social Review Summary available for all MIGA projects.

From FY19 to FY20, MIGA reduced its carbon footprint from 2,543 tCO2e to 1,878 tCO2e. This target is in line with the WBG’s commitment to reduce facility-related emissions by 28 percent over the same period. Owing to the COVID-19 pandemic and its implications for MIGA’s staff working arrangements, the comparable figure for FY21 is not available at this time.


MIGA publicly reports its progress against climate finance commitments in this annual report and in the public Joint Report on Multilateral Development Banks’ Climate Finance.

As indicated earlier, MIGA also reports internally to MIGA and WBG senior management on progress toward the CCAP 2021–2016. A scorecard is submitted annually to the Board of Directors that provides a snapshot of results and performance in institutional priority areas, including MIGA’s annual climate finance business. In addition, MIGA’s progress against its climate change commitments and targets is provided in the EVP’s quarterly reports to the MIGA Board and in the individual project documentation provided to the Board when it approves a MIGA guarantee. MIGA also reports annually to the Board of Directors in several briefings.

  1. Scope 1 emissions are direct emissions from owned or controlled sources. Scope 2 emissions are indirect emissions from the generation of purchased energy
  2. Since the COVID-19 pandemic began, staff E&S monitoring of projects is frequently being conducted virtually