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MIGA’s goal is to promote foreign direct investment into developing countries to support economic growth and more.

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Learn about the progress MIGA is making in its mission to support economic growth, reduce poverty and improve people’s lives.

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Explore different types of political risk insurance guarantees provided to investors and lenders.

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FirstRand Rest of Africa Central Bank Mandatory Reserves Coverage

$25.6 million
Project Brief

Project Description

On June 30, 2020, MIGA issued guarantees covering the equity investments by FirstRand EMA (Pty) Ltd of South Africa (FirstRand), which is the Rest-of-Africa holding company for FirstRand Limited (FirstRand Group or FSR) into Rand Merchant Bank Nigeria Limited (RMBN) in Nigeria. FirstRand Group’s interest in RMBN is held by FirstRand being the investor. The investor received coverage from MIGA for up to US$25.6 million in mandatory reserves for a period of up to 15 years.

FirstRand Group, South Africa-based, is one of the largest pan-African financial institutions in terms of total assets with operations in ten countries in Sub Saharan Africa. Its subsidiary banks outside of South Africa are required to maintain reserves at the central banks in their respective jurisdictions, based on the volume of customer deposits that these subsidiaries have. Mandatory reserves contribute to FirstRand Group’s overall risk-weighted assets (RWA) at the consolidated level, consuming a level of capital that could otherwise have been deployed in productive assets.
Environmental Categorization

This Project is a Category FI-1 project according to MIGA’s Policy on Environmental and Social Sustainability (2013). RMBN, a merchant bank, started its operations in 2013 and is currently providing finance to clients in corporate and investment banking. In addition, RMBN provides solutions in global markets risk management (foreign exchange, regulation and tax advisory), private equity and debt funding and sector specific research. RMBN is operating from its only office in Lagos, Nigeria with no other branches in the country.

MIGA analyzed the portfolio of RMBN for types of transactions, tenor, size, industry sectors, and exposure to MIGA’s Exclusion List. As of June 2019, 100% of the bank transactions are to corporate clients where long-term financing accounts for 44% of the total portfolio and 56% is short-term. Corporate client exposures include sectors such as chemical industry, manufacturing, downstream oil and gas, agribusiness, telecommunications, food and beverage, fast moving consumer goods (FMCG) and trading. RMBN does not have any exposure to activities on MIGA’s Exclusion List, coal projects, or extractives including upstream oil and gas and mining. The main environmental and social (E&S) risks of this project are associated with the bank’s lending activities in medium-high risk sectors, namely production of fertilizers, trading and storage of hydrocarbons, steel manufacturing, production of crops, food processing and its capacity to manage these E&S risks/impacts. The applicable E&S requirements for the bank’s portfolio are MIGA’s Exclusion List; applicable national environmental and social laws and regulations; and MIGA’s Performance Standards.

FirstRand Group became an Equator Principles (EP) signatory in 2009 and has developed a Guideline for the Management of Environmental and Social Risks in Financing which describes the Environmental and Social Risk Assessment (ESRA) due diligence process implemented in a number of the Group’s business units including RMBN. FirstRand Group has policy statements on environmental sustainability, policy statements relating to restrictions on the financing of certain sectors/activities, and thermal coal financing policy. FSR has developed an Exclusion List and a Sensitive Industries Matrix. The Exclusions List indicates activities that FSR will not finance at all (“strict exclusions” such as projects involving child labor/forced labor, activities and material deemed illegal under host country laws and international agreements, cross border trade in waste, destruction of high conservation value areas, unbounded asbestos fibers, pornography/ prostitution, racist and anti-democratic media), or sectors within which the amount of financing provided has been limited to a selected limit (“limited exclusions” including radioactive materials, substantial involvement in alcoholic beverages, tobacco, weapons and munitions, gambling/ casinos, commercial logging operations for use in primary tropical moist forest and production or trade of wood or other forestry products other than sustainably managed forest). The activities on the Sensitive Industry Matrix potentially raise significant environmental and social issues which require a position to be taken by the bank regarding potential lending to these industries. They include nuclear power generation, fracking, biofuels, political party funding, hunting of exotic and endangered species, trade of conflict minerals and cannabis-based products. FSR policies are publicly disclosed on the FSR website. In addition, FSR publishes on its website Equator Principles performance reports, that have been attested by an independent third party and reflect information about project finance activities and E&S performance in line with the requirements of the EPs.  

RMBN has implemented the Nigerian Sustainable Banking Principles (The Principles) initiated by the Central Bank of Nigeria in September 2012. There are 9 principles that include E&S Risk Management, E&S input in Business Operations, Human Rights, Women’s Economic Empowerment, Financial Inclusion, E&S Governance, Capacity Building, Collaborative Partnerships and Reporting. The Principles are publicly available at

The requirements of ESRA and the Principles are reflected in the RMBN Sustainable Banking Policy document developed in November 2019.  According to this Policy, Business Units (BUs) are responsible for screening all transactions against RMBN’s Exclusion List (that incorporates FSR restricted sectors including tobacco, alcohol, gambling, and weapons), assigning E&S Category, and conducting the E&S due diligence. This process is conducted via the on-line system and is supported by the FirstRand Bank South Africa (FRBSA) E&S specialists in South Africa who request and review clients’ E&S documentation. Information on E&S risks and ESRA results is communicated to the RMBN’s credit approval forums and feeds into the decision on credit approval at the Final Credit Committee meeting. Credit monitoring specialists conduct monitoring site visits to selected high risks projects to ensure that the clients are managing the E&S risks, meeting the national laws and requirements and complying with the E&S covenants stipulated in the loan agreements. FirstRand Group E&S specialists conduct regular training on ESRA process for RMBN’s staff including BU’s, Credit Analysts and Credit Officers. Compliance with E&S guidelines during the credit process is included in the scope of the RMBN’s internal audit. RMBN  has recently appointed a dedicated E&S specialist to oversee the implementation of ESRA.

RMBN has developed a set of human resources (HR) policies and procedures which cover conditions of employment and compensation, working time, benefits and performance management. RMBN’s Grievance Policy and Procedure (January 2017) describes various levels of grievance redress within the organization, whereas the Whistle Blowing Policy (October 2019) describes the ways for reporting of misconducts to both the FirstRand Ethics Committee and the international consulting company who acts as an external auditor to the FirstRand Group. RMBN’s Separation Policy (February 2017) describes procedures for voluntary and involuntary termination of contract including as a result of downsizing.  As reflected on the RMBN website (, the bank is implementing gender equality and women empowerment programs focusing at attracting, developing, advancing and retaining female talent at all levels. RMBN HR policies and procedures are in line with the requirements of MIGA Performance Standards 2.

RMBN has a Business Continuity Plan (BCP) and the Emergency Response Plan (ERP) in place that cover emergency response procedures, crisis management and business recovery protocols for the critical business processes, internal/ external notification and decision tree, requirements for training and drills and the requirements for auditing of the business continuity plans. Thus, RMBN’s BCP reflects the requirements of the emergency preparedness and response plan in Performance Standards 1.

Based on MIGA’s review and applicable performance requirements, an environmental and social action plan (ESAP) was agreed with RMBN prior to entering into the MIGA guarantee and will be implemented within an agreed timeframe. The ESAP contains the following items:

  1. Update the ESRA system to include MIGA E&S requirements.
  2. Appoint an E&S specialist/officer responsible for the Environmental and Social Management System (ESMS)/ESRA. This item has been completed.
  3. Develop and implement a procedure for external communications to screen and assess the issues raised by the public through its open channel and document responses in line with requirements of Performance Standards 1.

RMBN will report periodically to MIGA on the development and implementation of the ESMS and application of the Performance Standards.

Development Impact

The aim of MIGA’s guarantees is to help FirstRand Group reduce the risk of some of its assets, which would lead to a reduction in the group’s RWA on a consolidated basis. FirstRand Group plans to deploy this headroom of consolidated RWA across its Africa operations, including Nigeria, thus increasing the potential reach, development impact, and financial returns of the foreign investment.

MIGA’s coverage to FirstRand Group is aligned with the most recent World Bank Group’s strategy for Nigeria, as it seeks to promote private-sector-led growth via increased access to finance in the country and to promote sustainable investments.




MIGA supports its clients (as defined in MIGA Policy on Environmental and Social Sustainability) in addressing environmental and social issues arising from their business activities by requiring direct investment clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities. MIGA support to Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations as per the requirements of Performance Standards 1. 
In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for MIGA. The CAO is mandated to address complaints from people affected by MIGA-guaranteed business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of MIGA.
Independent of MIGA management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of MIGA’s environmental and social performance through its compliance arm.
Complaints may relate to any aspect of MIGA-guaranteed business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of a MIGA-guaranteed business activity. Complaints can be submitted to the CAO in writing to the address below:

Compliance Advisor/Ombudsman

International Finance Corporation

2121 Pennsylvania Avenue NW

Room F11K-232

Washington, DC 20433 USA

Tel: 1 202 458 1973

Fax: 1 202 522 7400