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MIGA issues $2.7b investment guarantees in 2012 fiscal year

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The Multilateral Investment Guarantee Agency (MIGA) issued $2.7 billion in investment guarantees, also known as political risk insurance for 52 projects in 2012 fiscal year ending June 30, 2012, according to its 2012 Annual Report released September 27, 2012.

According to the political risk insurance arm of the World Bank Group, its support for investments in developing countries increased substantially this year, particularly in high-priority areas such as sub-Saharan Africa and infrastructure.

MIGA’s gross exposure reached a record high of $10.3 billion.

Infrastructure investments accounted for 58% of the Agency’s new volume this year, according to the report. They included power and transport investments in Albania, Côte d’Ivoire, Ghana, Kenya, Pakistan, Panama, Rwanda, Tunisia, and Senegal, it added.

MIGA explains;“These investments represent important milestones in host countries’ development strategies.”

“Investors are seeking new markets as growth in traditional markets continues to stagnate,” said MIGA’s Executive Vice President Izumi Kobayashi.

“This year’s high demand for our political risk insurance stems from investors’ caution as they enter more frontier markets in an environment of generally increased risk perception,” Kobayashi noted.

She continues, “In these uncertain times, MIGA’s guarantees are helping developing countries secure private investment in critical infrastructure and other job-creating enterprises.”

Investments in the Middle East and North Africa region featured prominently in MIGA’s portfolio as the Agency recently launched an initiative to mobilize $1 billion in insurance capacity to retain and encourage foreign direct investment in the region.

The Agency also  issued guarantees of $442 million for investments in Jordan, Morocco, and Tunisia, as well as two projects in the West Bank and Gaza insured through the MIGA-administered West Bank and Gaza Investment Guarantee Fund.

As part of a World Bank Group effort to mitigate the impact of the euro zone crisis, MIGA said it committed to increasing its exposure in Central and Southeastern Europe and issued $928 million in guarantees during the year.

By Ekow Quandzie

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