MIGA and NEXI to Share Risk through Reinsurance
WASHINGTON DC, May 7, 2018— MIGA, the political risk insurance arm of the World Bank Group, and NEXI, Japan's official export credit agency, signed a Memorandum of Understanding last week on the sidelines of the Japan-Africa Public–Private Economic Forum held in Johannesburg, South Africa. The MoU formalizes an agreement to share risk, through reinsurance, on investments made by Japanese firms in developing countries.
MIGA's support for Japanese firms represents the fourth highest among investor countries, with MIGA currently providing over $2b in guarantees for investments made by Japanese firms across the globe.
"MIGA's strategy for the next few years focuses on mobilizing private capital to three priority areas: clean energy, fragile and conflict-affected situations, and low-income countries," said MIGA Executive Vice President and CEO Keiko Honda. "This agreement with NEXI helps us work more closely with Japanese firms, and to turn our strategy into results."
Through the arrangement, MIGA and NEXI will share risk by purchasing reinsurance policies from each other, reducing the exposure either would face individually. This in turn allows both agencies to support projects that could in some instances be too challenging for either to handle alone.
"Through the MOU, MIGA and NEXI are expected to use their own strengths to help Japanese companies develop effective investment projects. I definitely believe that the collaboration between MIGA and NEXI will make a further positive contribution to many countries." said NEXI Chairman and CEO Mr. Kazuhiko Bando.
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.
This year marks MIGA's 30th Anniversary. Over the last three decades, MIGA has directly supported almost $47 billion in investments for over 830 projects in 111 developing countries.
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