Priority Areas

IDA Countries / Fragile and Conflict-affected Situations (FCS)

In its FY21–23 strategy, MIGA set out a goal to deepen its commitment across two critical areas: a. Increasing engagement in IDA and FCS countries and b. Increasing its support for projects that address climate change.

IDA and FCS

IDA (low-income) countries and fragile and conflict-affected situations (FCS) continue to be severely affected by the COVID-19 pandemic. In FCS in particular, COVID-19 threatens to reverse hard-won advancements in poverty reduction and development. As a result of the pandemic, rising food inflation, and the war in Ukraine, compared with pre-pandemic projections, 20–22 million more people in FCS are estimated to live in extreme poverty in 2022. Moreover, GDP growth in such countries is projected to average 4.4 percent a year in 2022–23, 0.6 percentage points below previous forecasts.

Before and throughout the crisis, MIGA has continued to support projects in IDA countries and FCS—accounting for 65 percent of all FY22 projects. Guarantees totaling $1.6 billion were issued to support projects in IDA-eligible countries, and guarantees totaling $570 million backed investments in IDA countries affected by fragility, conflict, and violence, such as the Democratic Republic of Congo, Ethiopia, Kosovo, and Mozambique.

MIGA leverages the IDA Private Sector Window (PSW) to further expand operations into IDA-eligible countries, many of which are also FCS. In FY22, MIGA issued 16 IDA PSW-supported guarantees in 10 countries—Burkina Faso, Chad, the Democratic Republic of Congo, the Republic of Congo, Ethiopia, Malawi, Mozambique, Niger, Uganda, and Zambia—for a total of $457 million, of which $97 million was ceded to IDA using a shared first-loss structure.

Climate Change

MIGA is leveraging the use of its guarantees to mobilize financing for projects that support climate mitigation or adaptation. In FY22, the Agency issued $1.1 billion of guarantees supporting climate adaptation and mitigation projects in 28 projects across 17 countries, representing 28 percent of the total guaranteed investment of the projects supported. The projects signed in FY22 will help avoid an estimated 1.6 million metric tons of CO2 emissions annually.

Notable climate projects this year included those ensuring that highways in Kenya and Serbia will be resilient to flooding caused by climate change. In power projects in Bangladesh and Gabon and a major port project in Colombia, MIGA clients incorporated measures to make the projects resilient to the impacts of extreme weather in those regions.

To increase its climate action, the World Bank Group announced a new Climate Change Action Plan (CCAP) to guide its interventions from 2021 through 2025. The CCAP provides a bold strategic road map for tackling climate change and helping client countries to fully integrate their climate and development goals. MIGA’s products have helped cross-border investors protect their long-term investments in climate mitigation and adaptation activities across diverse markets and regions. As one of the few institutions that provides long-tenor guarantees, MIGA will be instrumental in fostering the lock-in of transformational climate action.

The CCAP also sets forth MIGA’s goal to align its future portfolio with the Paris Agreement: 85 percent of Board-approved real sector operations will be aligned starting July 1, 2023, and 100 percent by July 1, 2025.

As part of its ongoing effort to help countries integrate climate and development objectives, the Bank Group recently launched its series of Country Climate and Development Reports (CCDRs). CCDRs are a new core diagnostic to help countries prioritize the most high-impact actions that can reduce GHG emissions and boost adaptation. A summary of the preliminary findings of these reports will be published in the coming months to foster action-oriented discussion in the global community.

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Environmental and Social (E&S) Sustainability at MIGA

MIGA believes that an important component of achieving positive development outcomes is the environmental and social sustainability of its projects, which MIGA expects to achieve through the application of the MIGA Policy on Environmental and Social Sustainability and a comprehensive set of environmental and social performance standards widely accepted in the financial sector, known as the Equator Principles².

Actions to Ensure E&S Sustainability Integration at MIGA

Prescreening all projects for social and environmental impact
Gathering development effectiveness indicators from clients
Applying MIGA's Impact Performance Assessment and Comparison Tool (IMPACT) framework to assess a project's expected development impact
Ensuring that projects meet the MIGA Performance Standards on Environmental and Social (E&S) Sustainability
Verifying E&S impact through ex post evaluations
Assessing climate risk

MIGA helps investors raise the bar on E&S objectives in several ways

Ensuring that investments meet vigorous and internationally recognized standards
Working with clients to continually monitor and report on E&S impacts
Allowing clients to enter markets they otherwise would not have been able to reach, which can bring high development returns.

Measuring and Evaluating Development Impact

Assessing impact is critical to understanding the reach and results of the projects we support. From project origination to project close and after, MIGA implements several frameworks and tools that measure, track, monitor, and evaluate E&S performance.

Despite COVID-19 restrictions, MIGA was able to perform project assessments, monitoring work and evaluations.

Impact Framework

The Impact Performance Assessment and Comparison Tool (IMPACT) assesses expected project-specific outcomes as well as beyond-the-project effects on foreign investment. The framework complements the agency’s broader results measurement system. IMPACT has the following objectives:

Perform ex ante assessments of development impact for individual projects
Enable comparative analysis
Inform project prioritization based on assessment of expected development impact
Align with IFC’s Anticipated Impact Measurement and Monitoring (AIMM) framework and coordinate development impact ratings for IFC-MIGA joint projects.
Follow an agile approach to integrate IMPACT efficiently with MIGA’s existing guarantee processes.

Development effectiveness Indicator system

MIGA's Development Effectiveness Indicator System (DEIS) helps measure and track the development impact of projects that the agency insures. Through this system, MIGA measures a common set of indicators across all projects: investment support, direct employment, locally procured goods, and taxes and fees paid to host governments, among others. It also measures sector-specific indicators and puts into place a process to measure projects' development outcomes three years from the time of contract signing.

Evaluation

Since FY12, all projects have been evaluated by MIGA and the World Bank Group's Independent Evaluation Group (IEG), an independent evaluation body. The evaluations assess the achievement of the development outcomes of MIGA-supported projects through Project Evaluation Reports (PERs). MIGA conducts self-evaluations that are then validated by the IEG. Project evaluations are useful not only for assessing the results but also for generating lessons for future projects. MIGA actively uses evaluation findings in staff learning events.

Integrity

Integrity and reputational risk management are key to MIGA’s role as a development partner. MIGA considers integrity and reputational risk in its clients and projects, subscribing to the World Bank Group’s Anti-Corruption Guidelines, which identify fraud, corruption, collusion, coercion, and obstruction as major impediments to development and are considered sanctionable practices. 

MIGA’s integrity team conducts due diligence as part of business development and underwriting and monitors projects in the portfolio for potential emerging integrity or reputational risk flags. In this work, MIGA uses on-site evaluations; market soundings; experience with the client; World Bank and IFC local knowledge; and desktop resources, including proprietary databases. In FY22, MIGA continued to share integrity best practices through collaboration with other World Bank Group members and development partners as well as through participation in various integrity-focused forums. 

MIGA CLIMATE-RELATED FINANCIAL DISCLOSURE 

In June 2021, the World Bank Group Climate Change Action Plan 2021–2025 was adopted. As part of MIGA’s efforts under the Action Plan, MIGA has adopted the disclosure recommendations of the international Financial Stability Board’s Task Force on Climate-Related Financial Disclosures.

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Innovation

Innovation makes it possible for MIGA to do more with its products, broaden its development impact, and evolve alongside a dynamic investment market in developing economies. While keeping a finger on the pulse of these markets, the Agency has cultivated new innovations that will help to deliver the best possible development outcomes for countries and help its clients further their investment potential.

MIGA Strategic Priorities Facility

The MIGA Strategic Priorities Facility, established in FY22, is a programmatic approach that integrates and manages MIGA’s various trust funds under a common framework and governance structure. Its broad objective is to streamline trust fund operations and enhance administrative efficiencies for MIGA’s trust funds. MIGA establishes special guarantee facilities and trust funds to encourage investment and build capacity in targeted areas. The MSP Facility provides a consistent approach for strategy formulation, review, direction, and monitoring of all constituent trust funds. Within this broader program objective, each trust fund delivers its respective development objectives.

In particular, two trust funds under the MSP Facility, both climate related, were launched this year. The Fund for Advancing Sustainability (FAS) supports investor efforts to boost impact in priority areas such as climate and gender and achieve enhanced standards on ESG performance, corporate governance, and integrity.

The Renewable Energy Catalyst Multi-Donor Trust Fund (RECTF) is a trust fund that aims to enhance MIGA’s ability to catalyze private sector investment into renewable energy projects. It will directly support climate finance investment by backing additional renewable energy projects that will assist host governments in their transition to a climate-friendly, green energy sector. The fund will be available for use in all MIGA member countries, but it will emphasize support of projects in the poorest (IDA-eligible) countries, particularly those in Sub-Saharan Africa. The RECTF offers a variety of risk sharing and technical assistance solutions that provide flexibility and support innovative problem solving. The intended uses include first-loss layer, reinsurance, liquidity support, project development, and business origination, all as related to renewable energy projects. The trust fund will provide risk mitigation or reinsurance for projects that are not eligible for either Conflict-Affected and Fragile Economies Facility (CAFEF) or IDA-PSW support or where its assistance is complementary to the use of the CAFEF or IDA-PSW facilities. The RECTF will also provide liquidity support to address financial and cash flow risks for renewable energy projects in all MIGA member countries, covering both foreign and local investments. In addition to supporting the climate agenda, these projects will bring other important developmental benefits including increasing electricity access and promoting economic growth. The anchor donor for this trust fund is the government of Norway, through the Norwegian Agency for Development Cooperation (Norad).

This year, in the first project to benefit from the RECTF, MIGA signed a €3.5 million guarantee with MIHIA Holding SAS of France for the Zano project in Burkina Faso, which consists of the construction, ownership, operation, and maintenance of a 24 megawatt solar photovoltaic (PV) energy -generating facility. With one of the lowest electrification rates in Sub-Saharan Africa and high unmet demand, Burkina Faso is striving to address its energy access challenges and enhance its energy security. MIGA covers MIHIA’s equity and quasi-equity investments into Quadran Burkina Faso SAS (Zano) against the risks of transfer restrictions and breach of contract.

Regulatory Relief

As part of its COVID-19 Response Program, MIGA continued using its capital optimization product in FY22 to provide regulatory relief to banks. Delivery of this product allowed banks to maintain lending during the challenging economic times caused by the COVID-19 pandemic. In addition, MIGA has made significant progress during the year in using its capital optimization product to scale up climate finance by our client financial institutions, and MIGA plans to further expand this approach. The Agency is also looking into whether a similar product can be tailored for the needs of institutional investors and insurance companies.

MIGA has issued guarantees to Nova Ljubljanska banka d.d., Ljubljana (NLB) of Slovenia, covering up to €41 million in support to subsidiaries NLB Banka AD Podgorica of Montenegro and NLB Banka Prishtina Sh.A. of Kosovo. The guarantees, lasting three years, cover against the risk of expropriation of excess cash reserves held at the subsidiaries’ central banks. This is the first time MIGA’s capital optimization product has been used to cover excess cash reserves, marking an innovative application of the product beyond coverage on mandatory reserves held with central banks. Banks may hold excess cash reserves for precautionary purposes, and NLB’s subsidiaries are holding excess cash reserves in Kosovo and Montenegro as an additional liquidity buffer. MIGA’s guarantees will reduce the regulatory risk weighting applied to these excess reserves on an NLB-wide consolidated basis, freeing up capital to provide financing to MSMEs and for climate projects. NLB’s subsidiaries in Kosovo and Montenegro are the second largest banks in their respective countries as measured by their respective percentages of market share by total assets. With MIGA’s guarantees, NLB subsidiaries will contribute to the resilience of the MSMEs in their lending markets. They will also be able to pursue more robust, greener financing activities.

MIGA also signed a guarantee for Col$1.37 trillion (about $350 million) with BBVA of Spain, providing sub-sovereign Non-Honoring of a Financial Obligation coverage on its Col$1 trillion loan to the Bogotá Capital District in Colombia. Proceeds of the loan facility will be used by Bogotá’s Health Secretariat to finance projects related to the city’s COVID-19 health responses and to improve its overall health care infrastructure and services. This transaction represents MIGA’s first Non-Honoring (NH) guarantee in a local currency (Colombian pesos) and MIGA’s first NH guarantee covering an embedded swap. These innovations in MIGA’s guarantee contract enabled an international lender with euro-funding costs to provide a fixed-rate loan in Colombian pesos, giving Bogotá critical access to longer-tenor financing to improve the quality of health care as the system remains stressed by the ongoing COVID-19 pandemic.

Application to New Technologies

To support the development of mobile money services, MIGA issued guarantees to cover investments made by The Rise Fund into Airtel Money, one of Sub-Saharan Africa’s leading mobile money service providers. Airtel Money—originally a subsidiary of Airtel Africa, with presence in 14 different countries across the region—was spun off into 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 advance the World Bank Group’s Digital Economy for Africa initiative.

Cutting-Edge Finance

As part of MIGA’s ongoing effort to provide innovative financial solutions, a guarantee of $98.3 million to Virtuo Finance S.a.r.l. (Virtuo), boosting the sustainable refinancing of six operational solar power plants in Egypt’s Benban Solar Park in Aswan, the largest PV solar park in Africa. The refinancing will reduce financial costs, improve overall financial viability, and generate cost savings to be shared with the government of Egypt. The power plants will be refinanced through issuance of a first-of-its-kind green bond by Virtuo. Scope Ratings assigned the bond a rating of BBB+, a higher rating than Egypt’s sovereign debt rating. The issuance was arranged by MUFG Securities EMEA. The bond also benefits from certification by the Climate Bonds Initiative and has been independently verified by DNV, a leading technical consultancy. Furthermore, the bond meets MIGA’s Performance Standards on Environmental and Social Sustainability— an international benchmark for identifying and managing environmental and social risks.

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Leveraging MIGA’S Partnerships For Greater Development Impact

Expanding collaboration that encourages productive use of political risk insurance (PRI) is essential for unlocking material private capital, which in turn contributes to achieving the Sustainable Development Goals, boosting shared prosperity, and ending extreme poverty. To this end, MIGA works to enhance coordination with international finance institutions (IFIs), industry partners, and across the World Bank Group.

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Partnerships with International Finance Institutions

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Industry Partnerships

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Knowledge Partnerships

Gender Initiatives

MIGA continues to deliver on its commitment to advancing gender equality through its first Gender Strategy Implementation Plan FY21–23 (GSIP), launched in FY21. The GSIP identifies opportunities for increased gender actions aligned with three strategic pillars: corporate, client engagement, and partnerships.

Under the corporate pillar, MIGA has focused on building staff gender knowledge and skills. This year, the Agency rolled out a training program to enhance the capacity and knowledge of MIGA staff on gender-based violence (GBV), gender in private sector operations, and gender and climate change. MIGA continued to work on increasing gender parity and equality as part of its diversity, equity, and inclusion (DE&I) efforts. This year, all staff were invited to participate in small -group discussions on DE&I, offering a platform for transparent and open discussion. MIGA, as part of the World Bank Group, achieved Gender EDGE Level 2 Certification.

Under the client engagement pillar, MIGA further intensified its efforts to engage its clients on gender—specifically on identifying, managing, and monitoring GBV risks—by implementing new toolkits on GBV risk management processes and guidance. In addition, to support the World Bank Group’s twin goals, MIGA implemented the Gender Flag approach to identify opportunities to narrow gender gaps on projects. Gender Flag highlights include the following:

In June 2021, MIGA signed its first Gender Flag project with a financial sector client in Chile. The client committed to lending a portion of its MIGA-enabled capital to WSMEs.
In June 2022, a client in Argentina committed to a significant year-on-year increase in its lending to WSMEs.
Also in June, a client in Paraguay committed to developing a new product or service targeting the women’s segment and to establishing a corporate training program on gender.

Under the partnerships pillar, MIGA strengthened its close collaboration with IFC and the World Bank, benefiting from their expertise and leveraging lessons learned and best practices. MIGA actively participated in gender initiatives such as the IFC’s “Gender-Smart Investing: Private Sector Approaches to Advance Gender Equality” event under the World Bank Group’s yearlong Accelerate Equality initiative.5 In addition, MIGA deepened its partnership with the 2X Collaborative, a global industry body that convenes the entire spectrum of investors to promote gender-focused investments.

National Bank of Canada’s Gender Actions to Support Women-Owned SMEs

In January 2022, MIGA signed a guarantee with the National Bank of Canada (BNC), covering the risk of expropriation of funds related to the mandatory reserves of BNC’s subsidiary, ABA, held at the Central Bank of Cambodia. This was one of the agency’s first Gender Flag projects and the first in an IDA country. ABA intends to use the MIGA-enabled capacity in support of new lending, of which 75 percent targets WSMEs.

Gender Leadership Award

MIGA’s Gender Leadership Award (GLA), now in its seventh year, recognizes senior managers with a proven track record of furthering the cause of women’s advancement and gender equality in business while contributing to the World Bank Group’s twin goals of reducing poverty and boosting shared prosperity.

This year’s GLA recognized Lucy Heintz, partner and head of energy infrastructure at Actis, for her commitment to further gender equality in the workplace. She co-established and currently chairs Actis’s Inclusion and Diversity Committee, which focuses on enhancing the global investment firm’s approach and policies. Under her leadership, the company has launched initiatives including creation of female networks, open-door policies, unconscious bias awareness, and inclusive leadership training to promote gender equality and diversity. In addition, she has implemented projects to collect data to establish a baseline on diversity metrics, identifying best practices and showcasing success stories of diverse people from Actis portfolio companies across the world. Furthermore, she initiated an innovative mentoring program for talented women from companies within Actis’s African portfolio.

Business Overview

Leadership Messages

MIGA FY22 Highlights

WBG Fiscal Year Data