The Multilateral Investment Guarantee Agency (Miga) has issued US$1.4bn in guarantees in support of 26 projects in developing countries in the fiscal year ending June 30, 2009.
In addition, Miga’s outstanding portfolio grew by US$800mn in the same period to close at US$7.3bn, a record high. According to the agency, which acts as the political risk insurance arm of the World Bank Group, this was as a result of the low level of portfolio run off, due in part to lower-than-typical cancellations, which underscores the importance clients place on maintaining coverage during uncertain times.
In a year defined by economic turmoil, Miga continued to support foreign direct investment into developing countries and substantially contributed to the World Bank Group’s overall response to the needs of countries hit by the crisis.
“In responding to the crisis, Miga has been a partner in many of the World Bank Group’s efforts to mobilise resources – including financing, hedging products and guarantees, knowledge services, and partnerships to provide rapid assistance to countries most in need,” says World Bank Group president Robert Zoellick. ”At the same time, Miga has continued to focus on its core business: supporting projects that create jobs, provide water, electricity, and other basic infrastructure, rebuild collapsed financial systems, generate tax revenues, and transfer skills and technological know-how.”
During the fiscal year, Miga joined the World Bank and IFC in supporting initiatives and programmes for Europe and Central Asia, Africa, and Latin America to help economies in these regions emerge from the current turmoil. The agency also provided political risk insurance to support ten small and medium-size enterprise projects under the small investment programme designed to reach out to an important and underserved investor class. The majority of these guarantees are supporting projects in Sub-Saharan Africa, including two in Sierra Leone, one in the Democratic Republic of Congo, and two in Rwanda.
“The past fiscal year was difficult for Miga and our clients, but we maintained our focus on achieving strong development impact, particularly in those regions most severely affected by the economic slowdown. We fine-tuned our organisational structure, expanded our product offerings, and improved our service to meet client needs,” says Izumi Kobayashi, Miga’s executive vice-president. “Despite the challenging external environment, we are working hard to position Miga for the future and the economic recovery that we all hope will begin in 2010.”
The results bring total guarantee coverage issued since Miga’s inception in 1988 to US$21bn.
Last Updated September 21, 2009
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