1. Risk Mitigation for Investments in MOZAMBIQUE
Good morning Ladies and Gentlemen,
I am told we have 30 minutes for this presentation. I intend to give you an overview of what we do, hopefully in half the time. Then I will respond to your questions. But please, interrupt me as we go along if you have to.
This talk is mainly about the role MIGA can play in further stimulating FDIs in developing countries
Christophe Bellinger
Director, Europe
October 3, 2003

2. History and Membership
Mission: Facilitate FDI into developing member countries
Founded April 1988
Field offices in Africa, Asia and Europe
Total FDI Facilitated (est.): $50 billion; total coverage: US$12.4 billion
163 Members
22 Category One countries
141 Category Two countries
When talking about non-commercial risks, we mean political risks. Typical cases of which include:
- repossession of privatized assets,
defaults on government obligations
revocation of concessions given by previous governments.
in some cases projects have simply been shelved
there have also been cases of financing difficulty for new projects due to government interference, and
frustrations due to inadequate legal & regulatory frameworks in many countries

3. MIGA Products Insurance Against Non-Commercial Risks
protect investors and financial institutions from non-commercial risks
War and civil disturbance
Transfer restriction and inconvertibility
Expropriation
Breach of contract
coverage for medium to long-term investments (3 to 15/20 years)
complement public and private political risk insurers
Investment Promotion and Mediation Services
advice to investment intermediaries
on-line investment promotion services
mediation services and dispute resolution between investors and host countries
Training to public and private political risk insurers
To achieve its objective, MIGA provides two types of services: The first consists in assisting local investment promotion agencies or in offering mediation services.
The second and the main role of MIGA is to offer political risk insurance. MIGA can provide coverage up to US$200 million per project and US$420 million per country.

4. MIGA’S GUARANTEE PROGRAM Host Country Approval
All MIGA-guaranteed projects must be approved by the host country
Purpose:
Inform host country about project and MIGA coverage
Ensure that MIGA coverage is consistent with host country development priorities
Approval is not a government counter-guarantee, nor does it imply a contingent liability
MIGA offers four types of political risk coverage, which are:
currency transfer restriction and inconvertibility
expropriation
war and civil disturbance, and
breach of contract

5. MIGA’S GUARANTEE PROGRAM What Does MIGA Cover?
equity and quasi-equity
shareholder loans and loan guaranties
commercial loans
other forms of investments
capital markets transactions
technical assistance
management contracts
operating leases
franchising and licensing agreements
performance bonds
movable property
turnkey contracts
MIGA can support equity and investments and shareholder loans. We also cover loan guarantees, and other forms of investments such as leases, management contracts, technical assistance, licensing agreements, and performance bonds.

6. Guarantees Portfolio gross Exposure, by region
Guarantees Portfolio gross Exposure, by region* and sector, in percent (as of 06/30/03)
Latin American and Caribbean
Europe and Central Asia
Sub-Saharan Africa
Asia and the Pacific
Middle East and North Africa 43 26 19 12 3
$5.1 B
Infrastructure
Financial
Manufacturing
Mining
Oil and Gas
Tourism
Services
Agribusiness 41 29 10 6 4 3 1
* Figures exceed 100% due to master contract with one client

7. MIGA Priority Areas IDA-eligible countries Africa
South-South investments
SMEs
Complex infrastructure projects
Conflict-affected countries
Under-represented regions (MENA, Africa, Asia)
To achieve its objective, MIGA provides two types of services: The first consists in assisting local investment promotion agencies or in offering mediation services.
The second and the main role of MIGA is to offer political risk insurance. MIGA can provide coverage up to US$200 million per project and US$420 million per country.

8. FDI Trends for Sub-Saharan Africa
13,814
FDI
($ million)
Less than 1% of global FDI flows
Less than 5% of FDI flows into developing countries
Majority of FDI into only 3 countries: South Africa, Angola, Nigeria
8,092
7,000
6,506
6,076
1998
1999
2000
2001
2002*
*estimate

9. MIGA Guarantees Portfolio in Africa
893
Gross exposure
($ million)
788
Total issuance: Over $1.1 billion in 23 countries
FDI facilitated: $5.3 billion (est.)
FY99: 8% of portfolio – FY03: 18%
FY99-03: 58 projects covered
621
524
294
FY99
FY00
FY01
FY02
FY03*
*estimate

10. MIGA in Mozambique
Mozambique is MIGA’s 4th largest host country, overall and MIGA’s largest host country in Africa
MIGA’s Guarantees have facilitated $2.8 billion in FDI into the country
MIGA’s outstanding portfolio in Mozambique consists of 18 contracts of guarantee
Exposure: 5.2% of the Agency’s gross exposure
Total of $262 million in gross exposure and $192 million in net exposure

11. Guarantees in Mozambique
MIGA currently underwriting 4 projects in Mozambique (total coverage: $100 million)
In the second half of FY03, MIGA supported 3 important projects (issuing $107 million in coverage)
Sasol (Oil & Gas)
Moma (mining)
Maputo Port (infrastructure)

12. CASE STUDY: Sasol/Mozambique
Investors
Sasol Gas Holdings; Sasol Petroleum International (South Africa)
gas field and pipeline
equity coverage
$72 million in guarantees for 15 years against:
transfer restriction
expropriation
war and civil disturbance
breach of contract
South-South, IDA, post-conflict investment
Joint project with WB, IFC
Development Impact:
Over $2 billion in payments, taxes, etc. to Mozambique
Local purchases: over $1 million/year
Job creation
Improved infrastructure
Landmine removal

13. Investment Marketing Services in Mozambique
MIGA works with the Mozambique Investment Promotion Center (CPI) to support its efforts to attract FDI and strengthen linkages with the local business community
In FY03, MIGA focused on the completion of a baseline evaluation of Mozambique as a beneficiary under MIGA-Swiss Partnership (MSP)
MIGA completed the investigations required to define a targeted technical assistance program under the MSP
Under MSP, MIGA carried out an assessment of country’s apparel sector: an apparel industry outreach program for Mozambique to Honk Kong in September 2003

14. Thank you www.miga.org Christophe Bellinger Director, Europe
66 Avenue d’Iena
75116 Paris
Tel: (33)
Justin Kouakou
Senior Underwriter
66 Avenue d’Iena
75116 Paris
Tel: (33)
In conclusion we see ourselves playing an increasingly important role in financing Foreign Direct Investments in developing countries
We also believe that MIGA can further stimulate investments into its Category Two member countries
Clearly, there are a few constraints due to our status as a multilateral institution. But overall, we believe we are on the right track.