Working with Partners to Mobilize FDI 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 (SDGs), 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.
Under the leadership of MIGA’s Vice President and Chief Risk, Legal and Administrative Officer, Ethiopis Tafara, we work with our partners to expand the use of PRI, steer outreach among our members and stakeholders, and contribute to thought leadership on the PRI and development landscape.
Global FDI Event
Working Together to Unlock FDI
With global foreign direct investment (FDI) flows expected to drop as a result of the COVID-19 pandemic, the need for better coordination among international financial institutions is now greater than ever.
On December 8, 2020, MIGA launched a new handbook Expanding Political Risk Insurance: A Partnership Approach to Grow Private Investment, which calls for deepened and systematic collaboration to mobilize private capital.
To mark the launch of the new handbook, MIGA hosted a global virtual event ”Working Together to Unlock FDI” and brought together multilateral development banks (MDBs), the private sector, and other stakeholders in the development community to discuss the opportunities and challenges of using political risk insurance to unlock private capital in developing countries.
FDI Dialogue Series
As part of MIGA’s outreach to promote foreign direct investment (FDI) in developing member countries, MIGA is hosting a series of roundtable dialogues convening key stakeholders for candid conversations, with a view to improving investment conditions and increasing cross-border investments. The roundtables will be held across regions in Africa, Asia, and the Caribbean.
The first event of the series was held in Lomé on March 15, 2022, and co-hosted with the Government of Togo. Country host, Togo, was represented by Honorable Kodjo Adedze, Minister of Commerce, Industry and Private Sector Development who served as co-chair, and Honorable Kayi Mivedor, Minister of Investment Promotion. Senior government officials from Côte d’Ivoire, the Democratic Republic of the Congo (DRC), Gabon, Guinea, and Senegal flew to Lomé, Togo to attend the dialogue, with Honorable Hugues Mbadinga Madiya, Minister of Investment Promotion and Public-Private Partnerships representing Gabon. Providing the private sector and development finance institutions (DFI) perspectives were senior executives from MIGA’s private sector clients and representatives from IFC, the World Bank, Africa 50, and AFC.
MIGA Vice President Ethiopis Tafara moderated the discussion, drawing upon the agency’s experience in mobilizing private sector investment into developing countries and providing political risk mitigation solutions through its guarantee products.
A number of subsequent roundtables are being organized to take place in Africa later this year. Private investors and government officials could have more opportunities to discuss issues of mutual interest around facilitating more investments in African countries.
IFI & MDB Partners
MIGA works with international finance institutions (IFIs) and multilateral development banks (MDBs) to leverage political risk insurance and mobilize private capital for development. In 2018, the G20 Eminent Persons Group on Global Financial Governance, entitled ”Making the Global Financial System Work for All”, recommended that MDBs, ”as a system, leverage on MIGA as a global risk insurer to development finance”. Since then, the Agency has taken key steps with other MDBs and IFIs to help realize these recommendations.
As a multilateral global risk insurer, MIGA collaborates on a regular basis with IFIs in structuring de-risking solutions and bringing projects to life. MIGA’s goal is to develop more systematic partnerships to develop joint pipelines of projects that will not happen unless the institutions come together to apply their respective instruments to de-risk such projects. This form of partnership encourages guiding principles that facilitate joint project origination, set standards for streamlined due diligence and knowledge.
Over the years, MIGA has entered memoranda of understanding and cooperation agreements with a number of MDBs and DFIs. Most recently, MIGA has signed cooperation agreements with CDC Group, AFC, and DEG.
Partnering with others in insurance and development finance is essential to deliver results on the ground. MIGA serves as co-chair of the Insurance Development Forum (IDF), a public-private partnership that brings together private and public insurance companies to optimize the use of insurance to build greater resilience. The Agency is also a member of the Berne Union of global export credit and investment insurance providers. The Berne Union actively facilitates cross-border trade by supporting international acceptance of sound principles in export credits and foreign investments.
In addition, MIGA works alongside export credit agencies to deliver solutions to clients in the areas of reinsurance, co-insurance. To systemize this type of collaboration, MIGA entered into a cooperation agreement with Nippon Export and Investment Insurance (NEXI), the official export credit agency of Japan.
Through knowledge outreach and initiatives, MIGA engages with the development community, government officials and private investors to raise awareness of MIGA and political risk insurance (PRI) products and develop tools to enhance its offerings and serve clients’ evolving needs. MIGA has a key role to play in knowledge and capacity building because of its unique perspective as a multilateral provider of PRI on a global basis.
MIGA and the International Law Institute (ILI), a capacity-building and technical assistance institute, signed an MOU to train stakeholders from developing countries on political risk insurance products; optimal structures for public-private partnerships requiring MIGA products; and other issues that arise in the context of political risk insurance, cross-border transactions, dispute resolution, and governance. The collaborative effort will increase the institutional capacity of government officials, legal practitioners, private sector officers, and members of multilateral and other international development organizations.
In June 2021, MIGA became a founding member of the 2XCollaborative as part of implementing its Gender Strategy. The 2XCollaborative is a global industry body designed to serve capital providers in making gender-focused investments. Similarly, MIGA confirmed its participation in the 2X Challenge, as an observer. The 2X Challenge is a joint commitment to invest into 2X eligible businesses under a joint time-bound volume target.
Funding Partners – Trust Funds
MIGA Partnerships coordinates donor relationships and activities in support of MIGA’s trust funds. The team also focuses on donor engagement and fundraising and identifies trust fund objectives and targets.
All MIGA trust funds are operated within the framework of the MIGA Strategic Priorities Facility. A full description of the MIGA Strategic Priorities Facility and Trust Funds can be found here.