2021: A Year of Unprecedented Challenge
For the world and for MIGA, 2021 was a tough year. It began with a surge in COVID-19 cases, and it is ending with one. Just when it appeared that the pandemic might ebb at the end of 2020, the Delta variant appeared, driving the global case count higher. Vaccine campaigns tempered that surge. Now, Omicron is upon us, and cases are rising again. The graph looks just like the rollercoaster ride we all feel we’re on. But through difficult days, MIGA continued to issue guarantees and engineer new products to help keep liquidity flowing. Here’s what 2021 looked like for us, month by month.
MIGA issues $25.6 million in guarantees to Escotel, a firm that’s helping mobile phone company Orange cut greenhouse emissions from its towers in Sierra Leone and Liberia by installing solar panels, batteries, and energy-management systems. The upgrades ease dependence on the dirty diesel fuel that powers cell antennas and allow Orange to slash the number of fuel trucks it sends rumbling to distant installations.
Poor, export-led economies have suffered more than most during the pandemic, and Paraguay is no exception. Exports account for 35 percent of Paraguay’s GDP, and when the world stops buying, Paraguayans suffer. MIGA helps ease the pain by guaranteeing $101 million of loans from Citibank NA and Commerzbank AG so that Banco Nacional de Fomento of Paraguay can keep cash flowing to exporters, many of them small.
In celebration of International Women’s Day, MIGA honors Singapore financier Audra Low with its Gender Leadership Award. Low is Chief Executive Officer at Clifford Capital, a firm that has committed more than $3.3 billion of financing to projects around the world, catalyzing an additional $11.7 billion from other lenders.
MIGA client Ravinala Airports S.A. in Madagascar has the misfortune of opening a brand new airport just as the pandemic shuts down global air travel. To buoy employee spirit, Ravinala and 1,000 workers join the Jerusalema Challenge, a dance competition that started in Angola and went global. Teams from the taxi stand to the control tower and everywhere in between, including food service and security, dance in small groups and all together, waving flags, pushing luggage carts, and spraying water from fire engines. The project lifts spirits and raises the airport’s profile. The performance gets more than 4 million views on social media.
Even in good times, credit is hard to come by in Albania, a country with shallow capital markets and few large banks. One of the biggest, Alpha Bank A.E. of Greece, keeps capital flowing during the pandemic with help from MIGA. The agency issues €47.5 million in capital optimization guarantees to Alpha Bank, making room on its balance sheet for more loans to Albanian companies, most of which are tiny. Of Albania’s 107,450 businesses, just 181—or 0.2 percent—had more than 250 employees in 2018, according to Albania’s Institute of Statistics.
COVID-19 was bad enough, but in The Bahamas, the pandemic follows Hurricane Dorian, the worst natural disaster in the nation’s history. MIGA responds by guaranteeing $128 million in loans from Banco Santander S.A. to repair and upgrade two of The Bahamas’ three public hospitals and to support the country’s struggling small businesses. The project is expedited under MIGA’s Pillar-1 COVID-19 Response Program, a $6.5 billion facility launched in 2020 to expedite urgently needed guarantees.
The pandemic hammers demand for some goods and snarls supply chains. MIGA responds with an unprecedented effort, teaming with IFC on a new program to support trade in food, medical equipment, and other critical goods in low-income and fragile countries. The program focuses on small and medium-sized businesses and is managed under IFC’s Global Trade Finance Program, which has issued over $72 billion guarantees in emerging markets since 2004.
Bboxx is a small company with a big goal: to end energy poverty worldwide by building sustainable electric grids in remote places where big utilities won’t go. MIGA helps by guaranteeing investments in the grids in Rwanda, Kenya, and the Democratic Republic of the Congo. In August, MIGA goes to work on a video to tell the story of that collaboration.
MIGA products are complex. To make them more understandable, MIGA staffers make a series of five animated videos featuring Maya, an international investor, and Max, a lender, looking to invest in green-power systems, bottling plants, and other job-creating projects.
MIGA holds two virtual events as part of COP26 in Glasgow. The first, on Nov. 8, is called Accounting for Climate Risks in Political Risk Insurance Ratings. A day later, MIGA holds a session on de-risking carbon markets. As part of the WBG’s commitment to low-carbon, resilient development, 85 percent of MIGA’s board-approved real sector operations will be aligned with the Paris Agreement starting July 1, 2023.
Foreign direct investment in Africa, already ebbing before COVID-19 struck, tumbled during the pandemic as investors became more cautious. As part of a broader effort to turn the tide, MIGA holds a web event called Driving Foreign Direct Investment (FDI) to Africa, featuring a panel with MIGA staff and FDI experts from other agencies and governments.