New Cooperation Agreement paves the way for greater private investment among ADB member countries.
WASHINGTON DC, May 29, 2019 – MIGA, the political risk insurance arm of the World Bank Group, and the Asian Development Bank, have agreed to cooperate more closely to increase the flow of private sector investment into emerging economies in Asia and the Pacific, in line with the 2030 development goals.
The two institutions signed a Cooperation Agreement today that envisages greater use of the institutions’ respective financial products in joint projects.
“I am pleased to renew our commitment to greater cooperation with the ADB,” said Keiko Honda, CEO of MIGA. “This agreement charts a course for more private capital and investment across ADB member countries.”
The Cooperation Agreement replaces a previous agreement and will be effective for three years from signing. It lays out a commitment to stronger collaboration on identifying new projects, while deepening ties between the two institutions and potential private sector investors. The agreement further calls for greater coordination on all stages of a project, from consultations and marketing, to underwriting and implementation.
“This agreement will enable both organizations to leverage additional private capital for development purposes,” said ADB Vice-President for Private Sector Operations and Public-Private Partnerships Diwakar Gupta. “It is an important force multiplier of multilateral development financing that will help the region manage challenges to its inclusive and sustainable growth.”
To help encourage more private investment in developing countries, the Eminent Persons Group established by the G20 advised that MIGA and other Multilateral Development Banks collaborate more closely, and this Cooperation Agreement contributes toward that agenda.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. In 2018, it made commitments of new loans and grants amounting to $21.6 billion. Established in 1966, it is owned by 68 members—49 from the region.
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.
Since its creation, MIGA has directly supported over $52 billion in investments in 111 developing countries.
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