MIGA Issues Record $6.4 Billion Guarantees in FY23

WASHINGTON, July 31, 2023 – The Multilateral Investment Guarantee Agency (MIGA), whose mandate is to promote cross-border investment in developing countries by providing guarantees to investors and lenders, issued $6.4 billion in new guarantees in fiscal year 2023 across 40 projects in 29 countries. The volume of guarantees is the highest in the 35 years since the founding of MIGA. In addition to the 40 projects on MIGA’s own account, there was one supported by two MIGA-administered trust funds.

Throughout FY23, MIGA remained steadfast in its commitment to encourage private sector investors to invest in developing countries. Working with clients and partners, the agency mobilized $5.7 billion in financing from private sources through guarantees. Some 27 percent of the guarantees supported projects in low-income countries,19 percent went to fragile and conflict-affected countries, and 28 percent of the guaranteed investment contributed to climate change efforts, a strong reflection of MIGA’s continued commitment to these strategic priority areas. 

Both the immediate and ongoing impacts of these guarantees are significant. The guarantees issued in FY23 are expected to add 40 million new subscribers to the Internet, help connect 55 million people to mobile telephone networks, generate more than $128 million in annual tax revenue to the host governments, create over 8,700 jobs, and avoid around 800,000 metric tons of CO2 emissions annually.

“From dealing with effects of multiple global crises to mitigating the growing threats of climate change, MIGA worked with host governments and private sectors in extremely challenging environments,” said Hiroshi Matano, MIGA’s Executive Vice President. “Throughout the fiscal year, MIGA continued to successfully mobilize record amounts of private capital for developing countries, effectively addressing their development needs.” 

In FY23, MIGA acted swiftly in response to the crisis in Ukraine, deploying multiple products to assist the embattled population. This effort included joining forces with the European Bank for Reconstruction and Development to cover trade finance risk and ensure that the flow of essential drugs, food, fuel, and fertilizer continued to the war-torn nation. MIGA also issued guarantees to international banks to support liquidity and working capital for small businesses in Ukraine and established the Support for Ukraine’s Reconstruction and Economy (SURE) trust fund to enable issuance of additional guarantees. SURE was launched with a $23 million anchor contribution from Japan, followed by up to £20 million from the United Kingdom, and is expected to grow.

Climate finance was a priority during the fiscal year; and MIGA’s climate portfolio grew significantly from $5.3 billion at the end of FY19 to $8.4 billion at the end of FY23. The agency supported 32 projects across 24 countries in FY23 to mitigate and adapt to climate change. In total, MIGA issued $1.5 billion in climate-related guarantees during the fiscal year.

One climate project included partnering with an investment firm and a solar power innovator to develop a 2.8-megawatt solar hybrid power plant in Somalia, MIGA’s first guarantee in the country. The project will deliver significant additional electricity in a country where less than half of residents have access to it, while also demonstrating the potential for private sector investment in fragile and conflict-affected contexts. This first-of-its-kind transaction will serve as a model for other international development organizations seeking clean energy at a lower cost, while encouraging energy access for communities and governments. Similarly, MIGA’s first project in Saint Lucia will install 24,640 energy-efficient LED streetlights, saving energy and reducing emissions.

MIGA continued to emphasize and promote digitalization as a key to development by helping to connect millions of people to mobile networks and the Internet. In Ethiopia, a country plagued by conflict, MIGA partnered with IFC and provided guarantees of $1 billion to support the rollout and operation of 4G and 5G telecommunications networks across the country.

In the context of slowing global trade and increasing protectionism, MIGA took a significant step by issuing its first trade finance guarantee. The guarantee amounted to a facility of up to $20 million, which was provided to the Bank of Kigali to facilitate trade with Rwanda. Supporting trade through such guarantees will be prioritized through similar agreements.

MIGA remained committed to promoting gender equality and played an important role in mobilizing capital for businesses led and owned by women. One such project involved a MIGA-guaranteed loan to state-owned Banco de Comercio Exterior de Colombia S.A. (Bancóldex) to support micro, small, and medium enterprises in Colombia, thus facilitating the recovery of economic activity in the post-COVID-19 pandemic. By extending support to such initiatives, MIGA sought to foster an inclusive and sustainable economic environment.

Many developing countries are still grappling with the lingering economic effects of the COVID-19 pandemic. MIGA’s COVID-19 Response Fast-track Facility issued $2.3 billion in new guarantees in FY23 alone. Since the facility was launched, 49 projects in 66 countries have benefited from MIGA guarantees amounting to $9.9 billion. The guarantees were utilized to purchase medical goods and services, credit enhancement through government agencies, and capital optimization for financial institutions.

MIGA celebrated its 35-year anniversary in FY23. Since it was founded in 1988, MIGA has issued $76.3 billion of guarantees, supporting over 1,000 projects in 123 countries. FY23 concluded MIGA’s FY21-23 Strategy, during which the Agency achieved an impressive average annual new guarantee of over $5.5 billion.

About MIGA

MIGA was created in 1988 as a member of the World Bank to promote foreign direct investment in emerging economies by helping to mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and offering credit enhancement to private investors and lenders. Since its creation, MIGA has issued over $76 billion in guarantees across 123 developing countries, supporting more than 1,000 projects. Over the past decade, MIGA’s guarantees have generated more than 156,000 jobs in developing countries.

Contacts:

In Washington: 

Elizabeth Howton, (202) 458-5922, ehowton@worldbankgroup.org

For more information, please visit: https://www.miga.org

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