MIGA Spreads the Word in Colombia and Central America: Investment equals growth equals poverty reduction
MIGA Spreads the Word in Colombia and Central America: Investment equals growth equals poverty reduction
Washington, DC, November 20, 2000 — The Multilateral Investment Guarantee Agency of the World Bank Group is taking its message on the road, with staff experts traveling to Colombia and Central America through early December to talk about the value of political risk insurance for investments in the region and elsewhere.
Senior managers from the agency are set to hold seminars on its products for potential investors in Barranquilla, Colombia, on November 20—co-hosted by the Barranquilla Investment Promotion Agency and Chamber of Commerce-and in Guatemala City on November 27. Staff will also meet one-on-one with investors and companies in those countries as well as in Belize, Costa Rica, El Salvador, Honduras, Nicaragua, and Panama.
"MIGA's guarantee program allays investor concerns about the safety of their investments and facilitates foreign direct investment into countries—to reduce poverty and improve people's lives," says Roger Pruneau, MIGA's head of guarantees. "We do this by offering, among other things, political risk insurance to investors and lenders. We want to make sure prospective investors and the private sector in the region know about these services, which is why we're conducting these mobile offices."
The trip is particularly timely, given that the region is emerging from a two-year recession spawned by backlash from the global financial crisis of the late 1990s. "A resumption of growth and low asset valuations make the timing ripe for investors to think seriously about the region," says Pruneau.
MIGA is focusing on more than facilitating investment from outside the region. One of the trip's focal points is support for so-called 'south-south' investments, for example, those between developing countries such as Colombia, Costa Rica, and Guatemala, Pruneau adds.
MIGA's guarantees provide investors a high level of comfort in the security of their investments and facilitates their access to international capital markets. This is particularly evident in that in its 13-year history, the agency has successfully resolved a number of disputes between investors and host countries, and had to pay just one claim.
"We have some great examples of successful investments in Central America that have had a strong social and economic impact," says Pruneau. He points out that a MIGA-guaranteed investment in an aerial tramway that carries passengers atop Costa Rica's rainforest continues to generate strong revenues in an environmentally sound way. The agency also recently insured an investment in a geothermal power plant in Nicaragua, its first foray into the country, reflecting a growing push to focus more on lower-income economies.
MIGA guarantees for other investments in the region, which total 179 since 1988, vary from $3 million for a banking project in Peru to over $230 million for a telecommunications project in Brazil.
"At a time when many projects are becoming increasingly complex in terms of their financial structuring, MIGA is well positioned to work with sponsors-including small- and medium-sized companies—on their overall project financing and risk mitigation strategies," Pruneau emphasizes.
For information
Daniel Villar,
dvillar@worldbank.org, t. 202-458-5730
Pierre Nadji,
pnadji@worldbank.org, t. 202-473-5577
Angela Gentile,
agentile@worldbank.org, t. 202-473-3509