MIGA Sees Rising Interest in Political Risk Insurance
MIGA Sees Rising Interest in Political Risk Insurance
World Bank Agency Reports $2.1 Billion in New Issuance for Fiscal Year 2011
WASHINGTON, DC, September 15, 2011—The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance arm of the World Bank Group, announced today its support for projects in developing countries substantially increased last year despite the continued global economic uncertainty. The agency issued a record high of $2.1 billion in new investment guarantees (insurance) for the fiscal year ending June 30, 2011, representing a 43 percent increase from the previous year. MIGA closed the year with an outstanding gross portfolio of $9.1 billion. (See MIGA's 2011 Annual Report)
"Our fiscal year results confirm that foreign direct investment (FDI) in developing countries has picked up since the sharp contraction of 2009, despite important, lingering economic concerns," said Izumi Kobayashi, MIGA’s Executive Vice President. "At the same time, events in the Middle East and North Africa have created a resurging awareness of political risk." She added, "In this still-evolving economic and political environment, FDI is critical to growth and we have sent strong signals that MIGA is open for business."
MIGA’s fiscal year results also show more diversity across sectors and regions, including four new host countries: Iraq, Kosovo, Liberia, and the Republic of Congo. Of all fiscal year 2011 contracts signed, 72 percent fell into one or more of MIGA’s priority areas: investments in the world’s poorest countries, "South-South" (investment from one developing country to another) investments, investments in conflict-affected countries, and investments in complex projects.
For example, in Indonesia, MIGA guarantees are supporting financing for the expansion of cellular services to underserved customers and remote islands. A MIGA-backed $450 million Islamic finance facility is part of a larger $1.2 billion package for the expansion of Indonesian telecom company PT Natrindo Telepon Seluler (NTS).
In Liberia, MIGA supports a biomass cultivator that is developing a sustainable energy source from unproductive rubber trees, as well as helping to rehabilitate the country’s most important industry. The project brings investment, experience, and technology to one of the world’s poorest countries, which is also affected by conflict.
MIGA’s first guarantee in Iraq bolsters a South-South investment into that conflict-affected country. The agency is backing an investment by a Turkish company into a Baghdad plant that manufactures much-needed material for beverage bottles. This project is an important signal to potential investors into Iraq, which needs support to rebuild, create jobs, and diversify its economy.
All projects MIGA supports are detailed in the agency’s annual report.
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MULTILATERAL INVESTMENT GUARANTEE AGENCY
A Member of the World Bank Group
1818 H Street, NW, Washington, DC 20433
MIGA Contact:
Mallory Saleson, MIGA
Tel: +1 202 473-0844
E-mail: msaleson@worldbank.org
Rebecca Post, MIGA
Tel: +1 202-473-1964
E-mail: rpost@worldbank.org
Cara Santos Pianesi
Tel: +1.202.458.2097
E-mail: csantospianesi@worldbank.org