Multilateral Investment Guarantee Agency (Miga), a member of the World Bank Group, issued guarantees amounting to a record $5.3 billion in the 2018 financial year, helping draw in some $17.9 billion in foreign private capital to developing countries.

The guarantees will help deliver big benefits on the ground, with 8 million people receiving access to power, an estimated 3 million tons of CO2e emissions avoided, 1.4 million people getting access to new or better telecom services, and $1.4 billion in fees and taxes paid to host governments, said a statement.

Nearly 60 per cent of projects Miga covered in FY18 were in support of climate mitigation and adaptation, it said.

The agency also issued its first guarantees using the International Development Association’s Private Sector Window (PSW), a facility designed to reduce project risk, and catalyse private sector investment in low-income and conflict-affected countries, it added.  

Founded in 1988 to facilitate foreign direct investment (FDI) to developing countries, this past year marked Miga’s thirty-year anniversary. At the time of the agency’s creation, Overseas Development Assistance (ODA) was larger than FDI, however, FDI surpassed ODA in 1994, and was seven times larger by 2016.

Cross-border private investment is today an important source of financing, expertise, and solutions. MIGA plays an essential role in bringing private investors to developing countries, and ranked third in 2017 among multilateral development banks in direct private capital mobilisation to low and middle-income countries, said a statement.

As part of the World Bank Group, Miga is ramping up its collaboration with partners and its sister agencies under the Maximizing Finance for Development (MFD) approach, which aims to systematically leverage all sources of finance, expertise, and solutions to support developing countries’ sustainable growth.

Keiko Honda, chief executive officer and executive vice president of Miga, said: “We have doubled our new issuances and portfolio since five years ago. This will lead to big impact on the ground, including facilitating delivery of power to eight million people.”

“Moreover, we’ve mobilised over $8 billion from private reinsurers in the last three years. Through such instruments, we are finding effective and efficient ways to work with host governments, private investors and donor governments,” he added.

Key projects Miga provided guarantees for included:
•A new raisin processing plant in Afghanistan that has an expected production capacity of 15,000 tonnes per year, and will work with 3,000 smallholder farmers in remote parts of the country;
•Six solar power plants in Egypt that once operational, will have enough capacity to provide power to the equivalent of 350,000 additional residential households;
•A seventeen-story, state-of-the art, energy efficient office tower in Djibouti that will house high-end office facilities;
•Installation and maintenance of 4,000 km of fiber optic cable across six states and eight metropolitan areas in Myanmar;
•Modernisation and expansion of a cell phone network in Sierra Leone through the deployment of 300 telecom towers and improvement in network quality and reliability.

Miga was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and offering credit enhancement to private investors and lenders.

This year marks MIGA's 30th Anniversary. Over the last three decades, Miga has directly supported almost $50 billion in investments for over 845 projects in 111 developing countries, it stated. – TradeArabia News Service