MIGA Meets with South African Dev. & Bus. Community

World Bank Agency Meets with South African Development and Business Communities
NEPAD initiative at center of discussions

Johannesburg, December 6, 2002 — With the New Partnership for Africa's Development (NEPAD) at a critical phase in implementation, the Multilateral Investment Guarantee Agency (MIGA) is working hard to encourage regional businesses to fill the investment void, MIGA's Vice President for Underwriting, Roger Pruneau, told South African development and business leaders this week.
Pruneau and a group of MIGA representatives are in the region to share information about how the agency's investment guarantee (insurance) program can help South African and other regional investors. MIGA's guarantee coverage against noncommercial risks-such as transfer restriction, breach of contract, expropriation, and war and civil disturbance-offers protection to private investors who find business opportunities in Africa attractive but may be concerned about political risks.

"South Africa is the most active investor in the region," Pruneau told the NEPAD Secretariat, adding that "MIGA is extremely willing to work with African countries to achieve early wins under this initiative."

Since South Africa became a member of MIGA in 1994, the agency has provided nearly $223 million in political risk insurance to South African investors, supporting six projects across the African continent. The projects are in the mining, manufacturing, services, infrastructure, and agribusiness sectors.

One joint South African/Mauritian investment involves the rehabilitation and partial privatization of Mozambique's largest sugar estate. The project will have important employment and import substitution effects. Another South African investment covered by MIGA involves new electricity distribution facilities that provide the critical energy supply to the Mozal aluminum smelter in Mozambique. In addition to supplying the power Mozal needs to operate, the investment also benefits the people of southern Mozambique, South Africa, and Swaziland, by providing low-cost, reliable power 24 hours a day.

"We want Africa to be developed by Africans and are looking for local investors to help meet NEPAD's goals across the continent," Pruneau said. Another objective is to ensure that host countries receive the true value for their assets in any business transactions.

In addition to offering guarantees, MIGA is assessing the business environment in South Africa, at the request of the NEPAD Secretariat, to identify other potential risk mitigation instruments.
For information

In Johannesburg:
Happy Nkhomah, nkhomah@hotmail.com, t. 27.72.377.7192
In Washington:
Angela Gentile, agentile@worldbank.org,
t. 202.473.3509