The Multilateral Investment Guarantee Agency (MIGA) is the political risk insurance arm of the World Bank Group.
Established in 1988 to help developing countries attract and retain private investment, it furnishes private enterprises investing in developing countries with non-commercial risk insurance and provides developing country members with technical assistance regarding investment promotion. MIGA guarantees protected investors against loss resulting from expropriation, breach of contract, war and civil disturbance including insurrection, coups d’état, revolution, sabotage and terrorism. In addition to offering insurance to private companies, MIGA mobilizes additional guarantees for investors and assists host governments with legal services and strategic advice regarding investment.
By September 2008, MIGA had issued 922 guarantees for over 96 developing countries cumulatively worth over $19.5 billion since 1990.
All countries belonging to IBRD are eligible to join MIGA. Its current membership stands at 175 countries.
Each member country is represented on the Council of Governors, which meets annually but delegates its power to a Board of Directors with 24 members. The Board of Directors oversees MIGA’s day-to-day operations. While MIGA is legally separate from the World Bank, its Board of Directors is comprised of the same members as the World Bank’s Board, with slightly different voting shares. MIGA is divided into eight functional units under the leadership of an Executive Vice President. MIGA’s Executive Vice President is Izumi Kobayashi.
The current functional units:
- Underwriting Department
- General Counsel
- Legal Affairs and Claims Department
- Central Administration Department
- Finance and Risk Management Department
- Policy and Environment Department
- Investment Marketing Services Department
- Operations Evaluation Department
MIGA’s Organizational Chart (World Bank Group website)
Biography of Former Executive VP Yukiko Omura (MIGA website)
MIGA member countries (MIGA website)
World Bank Group Board of Executive Directors webpage (includes link to monthly Board Calendar and list of Board members) (World Bank website)
Accountability at MIGA: Compliance Advisor/ Ombudsman (CAO)
MIGA’s activities fall under the jurisdiction of the Compliance Advisor/Ombudsman (CAO) office, an internal World Bank Group body charged with assisting MIGA and IFC Management to improve their environmental and social performance and resolve problems related to the impacts of their projects on affected populations. For more information on the CAO, see BIC’s CAO page.
Since 1990, MIGA has issued guarantees totaling $19.5 billion and insured up to 922 guarantees for projects from over 91 developing countries. IDA eligible countries are top MIGA clients making up 63 percent of MIGA’s gross outstanding portfolio. In 2008, MIGA issued 38 guarantees to 24 projects totaling $2.1 billion with Gross Exposure at $6.5 billion.
MIGA encourages development by insuring new cross-border investments from any MIGA member countries. MIGA insured investment includes: expansion, modernization, or financial restructuring of existing projects, privatization of state-owned enterprises. MIGA also insures investments involving equity, shareholder loans, and shareholder loan guarantees with minimum maturity of three years; unrelated borrowers with shareholder investment already insured; technical assistance, management contracts, franchising.
In FY 2008, 60 percent of MIGA guarantees were issued to Europe and Central Asia while the Middle East and North Africa region received 21 percent of MIGA’s overall guarantees. This was followed by Sub-Saharan Africa at 10 percent and Latin America and the Caribbean at 8 percent. Asia and the Pacific only made up 2 percent of guarantees issued by MIGA. By sectors, MIGA’s coverage of the infrastructure is largest and stands at 44 percent. FInance is next at 30 percent, manufacturing and services at 15 percent, and extractive industries at 12 percent.
Pricing for MIGA guarantee premiums is calculated based on both country and project risk with duration up to 15 years. MIGA can terminate the contract only when the guarantee holder default on its contractual obligation to MIGA, but after three years of coverage, the guarantee holder may cancel or reduce coverage on any contract anniversary. Four types of coverage are transfer restriction, expropriation, war and civil disturbance, breach of contract, and investors may select one or a combination for MIGA coverage. Equity investments can be insured limit is 90 percent and debt up to 95 percent. MIGA is allowed to insure up to $200 million, with further coverage arranged through syndication of insurance.
Requirements to receive lending
Eligibility for coverage is considered case-by-case. Nationals from MIGA member countries may be eligible for MIGA provided the nationality of the investor and the investment are not the same. MIGA makes for exception under certain conditions. Coverage for corporations requires the company to be incorporated with its principal place of business in a member country, or with majority-ownership by nationals of member countries. A state-owned corporation’s eligibility depends on its commercial basis.
To qualify for MIGA coverage, preliminary applications must be submitted before an investment commitment. MIGA only covers new investments. With the submission of the preliminary application, MIGA staff will decide within three business days on the project merit. Further process requires a confirmation letter and a definitive application with request for further details on the project. MIGA can usually process a guarantee within three to four months after receiving a definitive application. The application process fee of $5000 could be waived under special circumstances for Small and Medium Investors and Enterprises.
Technical assistance from MIGA helps government and other intermediaries to respond to investor needs. In March 2007, MIGA’s technical assistance services were integrated into the Foreign Investment Advisory Service (FIAS), a World Bank Group entity. Established 20 years ago, FIAS works to increase the level and impact of private investments. The FIAS strategy for fiscal years 2008 to 2011 centers around regulatory simplification to make investment less costly, less risky, and more attractive; and investment generation, including investment policy and promotion, and industry-specific approaches to investment.
MIGA undertakes the majority of its operations in strict confidentiality, making very little information available about individual projects.
As of October 2007, MIGA has a new disclosure policy which supersedes their 1999 Disclosure Policy.
MIGA Disclosure Policy (MIGA website)
Environmental & Social Safeguards
As of October 2007, MIGA has a set of performance standards which is is supposed to adhere to.
MIGA’s Performance Standards address:
- social and environmental assessment and management
- labor and working conditions
- pollution prevention and abatement
- community, health, safety and security
- land acquisition and involuntary resettlement
- biodiversity conservation and sustainable natural resources management
- indigenous peoples
- cultural heritage
Brief descriptions of guarantees provided by MIGA can be found in quarterly reports or in periodic news alerts or press releases on MIGA’s website. See the most recent issue of MIGA News.
World Bank InfoShop
Environmental impact assessments for Category A (high-risk) projects must be made available through the World Bank Group’s InfoShop at least 60 days prior to project approval. Click here for information about the availability of environmental documents for Category A projects. Requests for publicly available information about MIGA’s activities should be directed to the World Bank Group InfoShop. Requests may be submitted by email or post, to the InfoShop offices in Washington, London, Paris and Tokyo, or any of the IBRD’s resident missions.
- World Bank InfoShop
1818 H Street, N.W.,
Washington, DC 20433, USA
Fax: (202) 522-1500
Hours of Operation: 9:30am to 5:30pm (M-F)
Connect to other networks working on these issues through the links below.
- 1800 G Street, N.W., Suite 1200
Washington, D.C. 20433 U.S.A.
- 1818 H Street, N.W.
Washington, D.C. 20433 U.S.A.
NGO & CSO Relations
- Tel: 202.473.4632