IFC and the Multilateral Investment Guarantee Agency (Miga) have announced a new working relationship to enhance the World Bank Group’s development impact in the private sector. This move is particularly aimed at promoting foreign direct investment (FDI) in emerging economies.
The two organisations believe the enhanced coordination will lead to improved joint solutions in support of clients, while maximising development impact in transitioning and emerging markets.
IFC can bring its global presence, extensive client base, and wide range of products to the relationship, while Miga brings to the table its unique set of political risk insurance (PRI) instruments and understanding of the dynamics and management of political risk.
In terms of the new relationship, IFC and Miga have established a contractual arrangement on cross-selling products, so that private sector clients of the World Bank Group will be able to obtain the complete range of product offerings available.
In addition, Jean-Marie Masse has been appointed to a new joint IFC-Miga position as head, business development and partnerships, IFC-Miga. Masse, who has been with IFC for 15 years, leaves his existing role as IFC head, financial markets business development, Europe, based in Paris to take up the new position in Washington.
The closer cooperation between IFC and Miga has already produced a notable outcome in the financial sector, where the two organisations joined forces to support countries negatively affected by the global financial crisis.
As part of its global financial sector initiative, Miga set aside €2bn of PRI capacity to support banking sector recapitalisation, and has already committed a substantial portion of this amount, for the most part to assist banks in Eastern Europe and Central Asia.
IFC, through its crisis response initiatives in sectors including banking, infrastructure, and trade as well as through its traditional investment and advisory services, is expected to contribute up to €2bn to the region. The preparatory work, deal sourcing and a portion of the due diligence for these interventions were carried out jointly.
Going forward, Miga will review how within the framework of this new cooperation agreement it can leverage IFC’s global presence on the ground to achieve improved access to potential investors and develop business, particularly in Asia.
Izumi Kobayashi, Miga’s executive vice-president, says the new working relationship is significant. “Enhanced collaboration should facilitate building better client relationships and identifying situations where the presence of both organisations can be a deciding factor in getting a project done. This will lead to more investments in the countries that need it most.”
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