MIGA Signs CUP Agreement with Zurich-American Political Risk
Washington, D.C., April 30, 1998 — The Multilateral Investment Guarantee Agency is pleased to announce that it jointly issued a guarantee contract for US$68.6 million in coverage with Zurich-American Political Risk of Washington, D.C. (Zurich-American), for an oil and gas project in Argentina. The contract reflects the increasing interest of investment insurers in MIGA's Cooperative Underwriting Program (CUP).
MIGA's CUP provides coinsurance under which the Agency acts as the insurer-of-record for the entire amount of coverage issued while it retains only a portion of the coverage for its own account. The Program is designed to expand insurance capacity available to prospective investors, host countries, and investment insurers.
The coverage was issued to El Paso Energy International Company of the United States, for its equity investment in an oil and gas exploration project in Argentina. The project enterprise, Companias Asociades Petroleras S.A., will use the investment to restructure and expand its subsidiary in the Neuquen province. It is the only thermal power plant in Argentina with captive gas reserves. The restructuring will refinance existing debt on more favorable terms and the expansion will develop a combined cycle plant and a liquid petroleum gas facility. The country will benefit from increased availability of electricity and an efficient source of low-cost power by using clean-burning natural gas. On-the-job training will be provided in the use of the technology.