I N S U R I N G I N V E S T M E N T S  E N S U R I N G O P P O R T U N I T I E S

MIGA’s Role MIGA is the entity within the World Bank Group that promotes developmentally sound foreign direct investment. It does this by providing political risk insurance (guarantees) to the private sector. Established in 1988 173 member countries Approximately 100 staff

Why Promote FDI? Job creation and provision of basic infrastructure “Freeing up” government resources for spending in basic education, etc. But the majority of flows go to just a handful of countries—leaving the world's poorest economies largely ignored…. Foreign direct investment can play a critical role in reducing poverty by creating jobs, and providing basic infrastructure It “frees up” government resources that can be redirected from infrastructure spending, for example, to social sectors But the majority of flows go to just a handful of countries—leaving the world's poorest economies largely ignored….

MIGA’s Strategic Priorities Insuring investments In IDA-eligible countries In conflict-affected environments In complex infrastructure projects From one developing country to another (South- South) MIGA’s strategic priorities Insuring investments…. In IDA-eligible countries In conflict-affected environments In complex projects, particularly in infrastructure, the extractive industries, and other project finance deals From one developing country to another (South-South)

Risks What “political risks” does MIGA cover? Currency inconvertibility and transfer restrictions Expropriation War and Civil Disturbance (including revolution, insurrection, coups d'état, sabotage, and terrorism) Breach of Contract Breach or repudiation of a contract between the investor and the Host Country authorities (particularly relevant in infrastructure) Risks

Risks covered Currency inconvertibility and transfer restriction Expropriation War and civil disturbance, including terrorism Breach of contract War and Civil Disturbance (including revolution, insurrection, coups d'état, sabotage, and terrorism) Breach of Contract Breach or repudiation of a contract between the investor and the Host Country authorities (particularly relevant in infrastructure) Investment types covered Equity Shareholder loans Loan guarantees Loans from financial institutions Non-shareholder loans Non-equity direct investment

Added Value for Investors MIGA guarantees can help investors Access funding, and lower borrowing costs Access the WBG’s collective knowledge and expertise Establish best practice in environmental and social management Resolve disputes by leveraging the WBG “umbrella” Mobilize and complement insurance capacity from other public and private insurers through coinsurance and reinsurance What is MIGA’s added value for investors? MIGA guarantees can help investors Access funding, and lower borrowing costs Access the WBG’s collective knowledge and expertise Establish best practice in environmental and social management Resolve disputes by leveraging the WBG “umbrella”, which allows projects to stay on track Mobilize and complement insurance capacity from other public and private insurers through coinsurance and reinsurance

Disclosure Summary of Proposed Guarantee Environmental and Social Review Summary Environmental Impact Assessment Project Brief

$115 million guarantee hydropower in Uganda Project examples Bujagali Hydropower Project in Uganda Addresses Uganda’s acute electricity shortage $115m guarantee from MIGA, $115m partial risk guarantee from IDA, $130m in IFC financing $115 million guarantee hydropower in Uganda

$427 million guarantee port in Djibouti Project examples Doraleh Container Terminal in Djibouti Contributes to economic growth by helping country strengthen its position as the gateway to the African hinterland $427 million guarantee from MIGA $50 million reinsured with Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) Shariah-friendly $427 million guarantee port in Djibouti

$7.3 million guarantee Moldova financial sector Project examples I.C.S. Raiffeisen Leasing S.R.L. in Moldova Covers Raiffeisen Bank SA Romania’s shareholder loan to its subsidiary I.C.S. Raiffeisen Leasing S.R.L. (RLM) ($7.34 m) Supports start-up phase of Raiffeisen Zentralbank (RZB) Group’s leasing operations in Moldova Meets demand for equipment (trucks, trailers, and industrial equipment) by start-ups and SMEs Helps develop a nascent financial sector $7.3 million guarantee Moldova financial sector

Working with World Bank Group Six strategic themes Contribution to Country Assistance/Partnership Strategy Participation in specific projects with other Bank group entities Specific initiatives Environmental and social standards, information disclosure MIGA’s work with World Bank Group Alignment with six strategic themes to help achieve an inclusive and sustainable globalization Contribution to Country Assistance/Partnership Strategy Participation in specific projects with other Bank group entities Specific initiatives (example: Sustainable Infrastructure Action Plan) Environmental and social standards, information disclosure

Gross Exposure 2008, US$ billion 6.5 5.40 5.25 5.20 5.19 5.08 5.10 4.36 US$20 billion issued in close to 100 developing countries since 1988 2.28 1.05 0.42 0.13 2008

Knowledge Agenda Lack of knowledge and information about investment environments and opportunities, and perceptions of political risk often inhibit FDI in the countries that need it the most.

www.FDI.net Online Investment Information and Knowledge Services A portal that promotes foreign direct investment in emerging markets by highlighting Specific investment opportunities, and Information on business and legal environments www.FDI.net

www.pri-center.com Online Investment Information and Knowledge Services PRI-Center.com www.pri-center.com A risk management information service for investors and practitioners highlighting Country analysis and risk ratings Research and tools from public and private PRI providers www.pri-center.com

www.miga.org For more information, visit www.miga.org Or for business inquiries, write to migainquiry@worldbank.org or call 202-458-2538