Multilateral Investment

Guarantee Agency 
(MIGA)

Presented By:
Vivek Pandey
Introduction to MIGA
Estb. in 1988 to encourage the flow of foreign direct
investment to, and among, developing member countries.
It is a insurance arm of World Bank.
It provides investors with investment guarantees against
non-commercial risks.
It gives advice to govt. on improving climate for foreign
investment.
By 1999, it had 173 member countries & a further 15
countries in the process of fulfilling the membership
requirements.
Objectives of MIGA
promoting economic growth and development.
investment projects must be financially and
economically viable.
consistent with the labor standards and other development
objectives of the country hosting the investment.
promotes FDI’s into developing countries by insuring investors
against political risk.
advising governments on attracting investment.
sharing information through on-line investment information
services.
mediating disputes between investors and governments.
Risks To Investors
MIGA provides guarantees against non-commercial risks
to protect cross-border investment in developing member
countries. Guarantees protect investors against the risks
of:
Currency transfer restrictions
Expropriation
War and civil disturbance
A. Transfer Restrictions
Coverage protects against losses arising from an investor's
inability to convert local currency (capital, interest,
principal, profits, royalties, or other monetary benefits)
into foreign exchange for transfer outside the host
country.
Coverage also insures against excessive delays in
acquiring foreign exchange caused by the host
government's actions or failure to act.
B. Expropriation
Coverage offers protection against loss of the insured
investment as a result of acts by the host government that
may reduce or eliminate ownership of, control over, or
rights to the insured investment.
This policy also covers partial losses, as well as "creeping
expropriation," a series of acts that over time have an
expropriator effect.
Bona fide, non-discriminatory measures taken by the host
government in the exercise of its legitimate regulatory
authority are not considered expropriator.
C. War and Civil Disturbance
Coverage protects against loss due to the destruction,
disappearance, or physical damage to tangible assets
caused by politically motivated acts of war or civil
disturbance.
War and civil disturbance coverage also extends to events
that result in the total inability of the project enterprise to
conduct operations essential to its overall financial
viability.
Benefits to Investors
Providing extensive country knowledge:
MIGA applies decades of experience, global reach, and
knowledge of developing countries to each transaction.
Providing environmental and social expertise:
MIGA helps investors and lenders ensure that projects
comply with what are considered to be the world’s best
social and environmental safeguards.
Eligibility for MIGA
A corporation is eligible for coverage if it is either
incorporated and has its principal place of business in a
member country, or if it is majority-owned by nationals of
member countries.
New investment contributions associated with the
expansion, modernization, or financial restructuring of
existing projects are also eligible.
Thank You
Have A Nice Day