Investment Gurantee Trust Fund for Bosnia and Herzegovina: Cooperation between the European Union and MIGA
Washington, D.C., March 27, 1997 — The Board of Directors of the Multilateral Investment Guarantee Agency (MIGA) approved the establishment of a special Investment Guarantee Trust Fund, sponsored by the European Union and administered by MIGA, to facilitate the flow of foreign investments into Bosnia and Herzegovina. The Trust Fund, consisting of a European Union credit line of 10.5 million ECU, will provide investment insurance against investors' major political risk concerns, including expropriation, currency transfer restriction, war and civil disturbance, and breach of contract (denial of justice).
The Trust Fund will broadly follow the parameters of MIGA's guarantee program and will provide long-term (up to 15 years) insurance for eligible small- and medium-sized investments. MIGA will issue guarantees on behalf of, and pay compensation from, the Trust Fund. New investments, including contributions associated with the expansion, modernization, or financial restructuring of existing projects, and acquisitions that involve the privatization of state enterprises are eligible. Only investors from member countries of the European Union, and certain East European countries, are eligible for Trust Fund guarantees.
In keeping with MIGA's mandate to promote economic growth and development, eligible investments covered by the Trust Fund would have to be financially and economically viable, environmentally sound, and contribute to the country's developmental needs such as creation of jobs, transfer of technology and generation of exports.
The Trust Fund will utilize MIGA's underwriting, claims and recovery expertise, and supplement the Agency's available insurance capacity for foreign investments in Bosnia-Herzegovina.