MIGA Issues Record 54 Guarantees Totaling $4.9 Billion in FY22
WASHINGTON, D.C., August 01, 2022 — The Multilateral Investment Guarantee Agency of the World Bank Group (MIGA), whose mandate is to drive impactful foreign direct investment to developing countries, issued $4.93 billion in new guarantees in fiscal year 2022 across a record 54 projects.
MIGA remained focused on encouraging private investors to work with host governments by helping manage and mitigate country risks. Working with clients and partners, the agency mobilized $6.5 billion in financing (from private and public sources) through guarantees to cross-border private investors in developing countries. Almost a third of the guarantee volume supported projects in IDA (lower-income) countries, and 12 percent went to fragile and conflict-affected countries. Twenty-eight percent of the guaranteed investment contributed to climate change adaptation or mitigation.
As a result, MIGA issuances in FY22 are expected to help provide new or improved access to power to some 15 million people, support nearly 20,000 jobs and enable $1.9 billion in loans, including to small and medium enterprises (SMEs) and for climate-related activities.
“Whether dealing with the lingering effects of the COVID-19 pandemic or those caused by climate change, MIGA’s guarantees address the most difficult development problems in some of the most challenging environments,” said Hiroshi Matano, MIGA’s Executive Vice President. “During this past fiscal year, we continued to mobilize private capital to help countries develop, prosper and benefit the most vulnerable populations.”
Two major projects in Africa demonstrate MIGA’s continuing drive for innovation to mobilize private capital on that continent. The Scatec Green Bond Project involved the refinancing of six solar power plants in Egypt’s Benban Solar Park. MIGA and the European Bank for Reconstruction and Development partnered to create a new risk mitigation structure, leading to the issuance of a green bond with a BBB+ rating, six notches higher than Egypt’s sovereign bond rating. The power plants are contributing to meeting Egypt’s goal of generating 20 percent of national electricity needs from renewable sources by 2022.
MIGA also helped bolster the digital economy in 12 countries in Sub-Saharan Africa, issuing guarantees to support the expansion of mobile-money services to people who lack access to formal bank accounts. Mobile technologies facilitating access to financial services can have a profound effect on inclusion. With only a basic mobile phone, lower income and/or rural consumers can obtain easy access to certain financial services through mobile networks. This easy access has also narrowed the financial inclusion gender gap, particularly in Africa, which is home to more than 50 percent of active mobile money accounts globally.
Climate finance was also a priority for MIGA in FY22. MIGA promoted adaptation, ensuring that highways in Serbia and Kenya will be resilient to flooding brought on by climate change. In power projects in Bangladesh and Gabon and a major port project in Colombia, MIGA incorporated measures to make the projects resilient to the impacts of extreme weather. In FY22, MIGA issued $1.1 billion of guarantees to support climate change mitigation or adaptation, which represents 28 percent of the total guaranteed investment of the projects supported.
To address the economic and social impact from the COVID-19 pandemic, MIGA continued helping investors and lenders respond to the crisis. The COVID-19 Response Program MIGA launched in April 2020 has delivered some $7.6 billion in guarantees issued across 47 projects since inception, $2.1 billion of which were issued this fiscal year. MIGA found innovative ways to provide this support at the local level. In Colombia, MIGA issued its first guarantee on a local currency loan offered by a sub-sovereign government entity – the District of Bogota. MIGA’s support was a critical enabler of the District’s COVID-19 response and will enhance emergency health care response capacity going forward.
Last year, MIGA launched its first Gender Strategy Implementation Plan, reinforcing its commitment to integrate gender into all aspects of MIGA’s business. At the corporate level, MIGA awarded its seventh annual Gender Leadership Award to Lucy Heintz, Partner and Head of Energy Infrastructure at Actis, for her work on gender in the energy sector. At the project level, MIGA worked with its clients to integrate actions to narrow gender gaps; for example, MIGA signed a guarantee with the National Bank of Canada, supporting its Cambodian subsidiary, ABA, for lending to women-owned SMEs. The project was MIGA’s first with gender commitments in an IDA country.
Finally, MIGA used its convening power to host several events promoting foreign direct investment. A public event in December 2021 focused on “Driving Foreign Direct Investment to Africa,” and a high-level dialogue in March 2022, co-hosted with the government of Togo, promoted foreign direct investment into Western Africa. The multi-country roundtable brought together foreign investors with government representatives from Togo, Guinea, Côte d’Ivoire, and Senegal, among other countries.
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 issued nearly $70 billion in guarantees across 122 developing countries in support of nearly 1,000 projects.
Elizabeth Howton, (202) 458-5922, firstname.lastname@example.org
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