MIGA FY22 Highlights
Increasing Investment in EgyptRead more
Together, MIGA and EBRD created a new credit enhancement mechanism that boosted the sustainable refinancing of six operational solar power plants in Egypt. This credit enhancement was essential for attracting private capital investment—especially from major institutional investors that were mobilizing investment contributions for the first time in Egypt. This backing, along with other transaction features, also earned the bonds an investment-grade rating from European credit rating agency Scope.
MIGA's support facilitated lower project costs and improved overall financial viability, enhancing resilience to financial shocks and preserving the project's ability to generate greenhouse gas (GHG) emissions savings. In addition, the reduced cost of financing is generating ongoing cost savings that enable the project sponsors to share this benefit with the government of Egypt through a cash transfer. The rating upgrade provides a positive signal and serves as a model to countries as well as investors, helping motivate a new class of private institutional investors to engage in similar financial structures in other sectors.
Supporting Financial Inclusion Through Mobile Money in Sub-Saharan AfricaRead more
Mobile money, which provides access to basic financial services through mobile networks, is an important enabler of financial inclusion, particularly for low-income populations who may lack access to formal bank accounts. In Sub-Saharan Africa, the growth and impact of mobile money services has been particularly profound: the region has over 180 million active accounts, and total transaction values reached $700 billion in 2021, representing 70 percent of global mobile money transactions.
To support the development of mobile money services, MIGA issued guarantees to cover investments made by The Rise Fund into Airtel Money, one of the region’s leading mobile money service providers. Originally a subsidiary of Airtel Africa, Airtel Money, with presence in 14 different countries across Sub-Saharan Africa, was spun off as a separate entity to help bring in outside investors such as The Rise Fund and Mastercard to foster growth and innovation. These investments, many of which are targeted to IDA and FCS countries, will help push forward the World Bank Group’s Digital Economy for Africa initiative, and MIGA is proud to play a role in mobilizing private investment to deepen financial services in the region.
Increasing COVID-19 Response Capacity in BogotáRead more
The COVID-19 pandemic has adversely affected Colombia and its capital, Bogotá. The country has reported over 6 million confirmed COVID-19 cases and 138,000 deaths as of late February 2022. Bogotá, a densely populated urban metropolis of more than 8 million people, has experienced major outbreaks and a greater incidence of COVID-19 than the country at large. Colombia’s economy has also suffered, with gross domestic product (GDP) falling an estimated 6.8 percent in 2020 before rebounding to precrisis levels in 2021. The country’s publicly funded and highly decentralized health care system offers comprehensive health insurance to nearly 98 percent of the population. However, the COVID-19 pandemic has exposed health system vulnerabilities, ranging from outdated infrastructure and lack of ICU beds to shortages of laboratories and reagents to analyze COVID-19 tests. In Bogotá, COVID-19 surges have stressed the health care system significantly, with ICU occupancy rates at times approaching 100 percent.
The MIGA-guaranteed loan supported Bogotá’s response to the pandemic by funding COVID-19 testing and the purchase of ambulances, personal protection equipment, and other materials to support COVID-19 mitigation efforts. The loan also supported improvements in Bogotá’s health care services through the expansion and upgrading of its health infrastructure, provision of equipment for primary care and specialized clinics, and strengthening of Bogotá’s Medical Emergency Information System.
Supporting the Tourism and Hospitality Sector in Sub-Saharan AfricaRead more
Few industries have been hit harder by the COVID-19 pandemic than hospitality. Hotels in Sub-Saharan Africa were no exception as many nations closed borders, blocking the international visitors who sustain the industry there. When a hotel closes for an extended period, management cannot simply open its doors and welcome guests back. Pipes must be cleared of lead and copper that accumulate in stagnant water; surfaces must be examined for mold; and showerheads, toilets, and hot tubs must be tested for bacteria. All of that costs money—and in developing economies, capital can be hard to come by.
MIGA guarantees will help ensure that hotels are built or redeveloped in Sub-Saharan African countries and will help to preserve jobs in hotels that are being remodeled to improve energy efficiency. In January 2022, MIGA issued a master contract to Kasada Hospitality Fund LP. MIGA’s support to Kasada, whose operations span 10 countries, has already materialized through a subproject bringing guarantees to eight hotels acquired by the fund in 2021 in Cameroon, Côte d’Ivoire, and Senegal.
Upgrading Roads and Connecting People in KenyaRead more
Roads are the primary mode of transport in Kenya, accounting for over 80 percent of the country’s total passenger traffic and 76 percent of freight. The transport sector is relatively underdeveloped in some regions of Kenya, limiting economic development and climate change resilience and contributing to regional disparities. Although the road network is extensive, only a limited portion is paved and in good condition; the rest consists of gravel and earth roads. The government of Kenya has therefore prioritized the improvement of the country’s road network through selected public-private partnership programs, including the country’s Roads Annuity Programme.
The MIGA guarantees supported improvements to the road network which include shorter travel times by enabling faster driving speeds and the potential of some roads to become traffic bypasses away from densely populated areas or to provide shortcuts between other roads. Road upgrades have also reduced vehicle operating costs given the improvement in road quality and greater fuel efficiency. Furthermore, they contributed to flood resilience as a result of improved road drainage. The initiative is consistent with a low-carbon, climate-resilient development path for Kenya.
MIGA’s Global Crisis Response
With steeply declining global economic growth, rising inflation, deepening food insecurity, and ongoing war and fragility as well as the continued negative effects of the COVID-19 pandemic, the combined impact of these crises on emerging markets and developing economies (EMDEs) is expected to be severe.Read more
World Bank projections show growth slowing for EMDEs from 6.6 percent in 2021 to 3.4 percent in 2022. The World Bank’s most recent Global Economic Prospects report estimates that global growth will decline to 2.9 percent in 2022 and 3 percent in 2023–24 (down from 5.7 percent in 2021) owing to the overlapping global crises.
Amid these global challenges, MIGA stands ready to implement and refine its response to the multiple crises that face developing countries. As the impacts increase fragility and political risks across these countries, MIGA’s role to encourage and help facilitate investment becomes even more crucial.
In particular, the COVID-19 pandemic has worsened an ongoing decline of FDI in all EMDEs. The crisis is presenting a new, unprecedented source of investor risk that is depressing business confidence to historic lows. Although global FDI rebounded in 2021 to $1.58 trillion, the outlook is negative given the ongoing impact of COVID-19 and the other crises affecting EMDEs.
Launched in April 2020, MIGA’s COVID-19 Response Program consists of three stages: (1) the first response, to address the immediate needs of the public and financial sectors; (2) a recovery phase, to support the restoration of economic activity in the real sectors and private enterprise in the short and medium term; and (3) long-term resilience, to support investment across the public and private sectors.
As of June 2022, the program has delivered some $7.6 billion in guarantees across 47 projects throughout Latin America and the Caribbean, Sub-Saharan Africa, East Asia and Pacific, and Europe and Central Asia—$2.1 billion of which was issued this fiscal year. These projects have been highly impactful, helping host countries to bolster their medical response to the COVID-19 crisis and helping governments and private sector clients to mitigate the economic impact of the crisis by providing working capital support to micro, small, and medium enterprises (MSMEs), corporates, and individuals. The COVID-19 Response Program runs through June 2023 with an approved indicative facility amount of $10–12 billion in the aggregate.
Procuring Urgent COVID-19 Medical Supplies and Services
Supporting host governments in purchasing needed medical goods and services (for example, COVID-19 testing kits, hospital gowns, masks, ventilators, and medicines).
Countering Adverse Economic Impacts During the COVID-19 Crisis
Credit enhancement program: Supporting governments at eligible sovereign, sub-sovereign, or state-owned enterprise levels to provide short-term funding and working capital support to SMEs, corporates, and individuals during the crisis.
Capital optimization: Supporting financial institutions in extending lending in host countries by freeing up risk-weighted assets locked up in maintaining their mandatory reserves with central banks.
Complementing IFC Trade Finance
Supporting trade finance to enhance the flow of goods and services through global supply chains, including for critically needed commodities, especially in IDA-eligible and FCS countries.
Capital District of Bogotá
Fondo Mivivienda S.A.
Financiera de Desarrollo Nacional
Agencia Financiera de Desarrollo
NLB/Komercijalna Banka A.D. Beograd
National Bank of Canada
NLB/NLB Banka AD Podgorica
NLB/NLB Banka Prishtina Sh.A.
Banco Santander S.A./ Banco Santander Argentina S.A.
Driving Foreign Direct Investment to Africa – Global Virtual EventRead more
Seventh Annual MIGA Gender Leadership Award: Clean Energy for AllRead more