Overview Outline MIGA Overview Within the WBG History Products - - PowerPoint PPT Presentation

Overview

1 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

Outline

MIGA Overview

• Within the WBG
• History
• Products
• Development Impact
• Sustainability

2 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

WBG Institutions

IBRD

International Bank for Reconstruction and Development

IDA

International Development Association

MIGA

Multilateral Investment Guarantee Agency

Support countries’ economic and institutional development Governments of member countries with annual per capita income of less than $1,025

• Technical Assistance
• Interest-Free Loans
• Policy Advice

Promote cross-border investment and lending Debt and equity investors in member countries

• Political Risk Insurance
• Credit Enhancement
• Est. 1945
• Est. 1960

IFC

International Finance Corporation

Promote private sector development Investors in member countries

• Equity/Quasi-Equity
• Long-Term Loans
• Advisory Services
• Est. 1956
• Est. 1988

Role:

Clients: Products:

Support countries’ economic and institutional development Governments of member countries with annual per capita income between $1,025 and $6,055

• Technical Assistance
• Loans
• Policy Advice

Shared Mission: “End extreme poverty and build shared prosperity”

3 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

MIGA History: Dr. Ibrahim Shihata – Founder

“When I joined the Bank on August 1, 1983, as general counsel, I was convinced that the need for an international agency to encourage foreign investment was greater than ever. Such investment not only was concentrated in a few countries; its volume had started an historical decline. An agency supported by the World Bank and receiving the full confidence of both capital exporting and importing countries could, in my view at the time, reverse that trend to the benefit of both sides. In particular, it could play a significant role by rebuilding confidence in investing in developing countries and by breaking the psychological barrier that magnified political risks… The basic objective of the newly projected agency, to which I gave the name of the Multilateral Investment Guarantee Agency was described in terms of encouraging and promoting the flow of private resources among members for productive purposes.”

4 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

MIGA’s Products Political Risk Insurance (PRI) Non-honoring (Credit Enhancement

• NHFO)

Transfer restriction & currency inconvertibility Expropriation War & civil disturbance Breach of contract Non-honoring of a sovereign financial obligation Non-honoring of a sovereign financial obligation – sub-sovereign Non-honoring of a financial obligation of SOE

• MIGA’s mandate is to facilitate FDI into developing countries
• As WBG’s provider of investment insurance, MIGA secures

investment flows against political and sovereign risks

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MIGA’s Value Added

Strong pre-claim management Highly rated Financially stable Strong Risk Appetite Environmental and social risk mitigation

• Management of risks at pre-claim level (100+ pre- claims among
• ver 800 projects. Two claims paid for expropriation, six for war

and civil disturbance)

• Leveraging the World Bank network
• Highly rated multilateral by Basel Committee
• Reduce risk weighting and capital provisioning
• Strong capital base
• Mobilize reinsurance capacity
• Operates in challenging markets
• Longer tenors (15 years)
• Best practices in environmental and social standards

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• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

NHFO Issued by FY PRI Issued by FY

MIGA’s Growth 1990 – 2016

NHSFO introduced in 2009

(New Guarantees Issued, $ million, FY)

Agency Established in 1988

Aspire to grow new guarantees issued by 50% from FY13 to FY17

NH for SOE

• bligors

Introduced in 2013 Decoupling

• f debt and

equity introduced in 2010

7 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16

NHFO Portfolio PRI Portfolio

MIGA’s Portfolio 1990 – 2016

(Gross Exposure, $ million, FY) June 30, 2016 Gross Exposure: $14.2B PRI: $8.8B; NH: $5.4B

NHSFO introduced in 2009 Agency Established in 1988 NH for SOE

• bligors

Introduced in 2013 Decoupling

• f debt and

equity introduced in 2010

MIGA has continued to increase its development impact through its stimulation of private investment

SOURCE: MIGA development impact estimates

USD billions

177+ million

people provided access to transport

3+ million

metric tons of greenhouse gases avoided

50+ million

people provided access to power

Development impact (FY13-16)

Gross issuance Private co-financing

FY12 FY13 FY15 FY11 FY10 FY06 FY07 FY08 FY09 FY05 FY04 FY14 1.1 1.2 1.3 1.4 2.1 1.4 1.5 2.8 3.2 2.8 2.7 2.1 5.6 5.9 9.9 8.8 3.4 FY16 4.3 27.31 No co-financing data available for FY04-FY10

SOURCE: MIGA development impact estimates

MIGA-supported projects have advanced the Sustainable Development Goals in powerful ways over the last 4 years

Core areas of development impact, FY13 - FY16

Power

50+ million people with access

Transport

177+ million people with access

Clean Water

18.2 million cubic meters flowing/yr

Greenhouse Gas Reduction

3+ million metric tns prevented

Access to Finance Growing economies Tax revenue

Jobs

65k+ direct, full- time jobs created $6.0 billion dollars in finance enabled for SMEs $1.7 billion in locally procured goods $1.8 billion in local taxes and fees

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Monitoring

Investment Due Diligence (Underwriting) Management & Board Approvals Environmental and Social Due Diligence Disclosure period 30/60 days Contract Negotiation & Issuance Engaging MIGA Initial Management Approval Contract Execution

Origination, Structuring, Application Investments Due Diligence Contract Negotiations

Technical and Commercial Due Diligence

Underwriting –Process and Timeline

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E&S Sustainability Policy Access to Information Policy 8 Performance Standards

MIGA’S Sustainability Framework

Client

Responsibilities

Implementation Tools

E&S Review Procedures Guidance notes WBG EHS Guideline Good Practice Material

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Performance Standards

PS1: Assessment and Management of E&S Risks and Impacts PS2: Labor and Working Conditions PS3: Resource Efficiency and Pollution Prevention PS4: Community Health, Safety and Security PS5: Land Acquisition and Involuntary Resettlement PS6: Biodiversity Conservation and Sustainable Management

• f Living Natural Resources

PS7: Indigenous Peoples PS8: Cultural Heritage

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