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Political Risk Insurance and Credit Enhancement Solutions
April 2016
1 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
1. MIGA in the World Bank Group 2. MIGA’s Product Lines 3. MIGA Guarantee Examples
3.1 Political Risk Insurance 3.2 Credit Enhancement
4. MIGA’s Value Added 5. MIGA’s Performance Appendix
• MIGA Underwriting Process • Other Project Examples • Award-Winning Projects
2 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
World Bank Group
IBRD International Bank for Reconstruction and Development
IDA International Development Association
MIGA Multilateral Investment
Guarantee Agency
Support countries’
economic and
institutional development
Governments of member
countries with annual per
capita income of less than
$1,025
- Technical Assistance
- Interest-Free Loans
- Policy Advice
Promote cross-border
investment and lending
Debt and equity investors in
member countries
- Political Risk Insurance
- Credit Enhancement
Est. 1945 Est. 1960
IFC International Finance Corporation
Promote private sector
development
Investors in member
countries
- Equity/Quasi-Equity
- Long-Term Loans
- Advisory Services
Est. 1956 Est. 1988
Role:
Clients:
Products:
Support countries’
economic and
institutional development
Governments of member
countries with annual per
capita income between
$1,025 and $6,055
- Technical Assistance
- Loans
- Policy Advice
Shared Mission: “End extreme poverty and build shared prosperity”
3 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
1. MIGA in the World Bank Group 2. MIGA’s Product Lines 3. MIGA Guarantee Examples
3.1 Political Risk Insurance 3.2 Credit Enhancement
4. MIGA’s Value Added 5. MIGA’s Performance Appendix
• MIGA Underwriting Process • Other Project Examples • Award-Winning Projects
4 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Political Risk
Insurance
Currency Inconvertibility and Transfer Restriction Cover
MIGA’s Product Line
Breach of Contract Cover
Expropriation Cover
Non-honoring
of Financial Obligations
Sovereign
Sub-sovereign
War and Civil Disturbance Cover
State-owned enterprise
5 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Eligible Investments
• Equity • Shareholder loans • Non-equity direct investment (e.g. management
contract, EPC contracts) • Non-shareholder loans (bank loans) • Other forms of medium or long-term investment (e.g.
bonds), subject to Board approval by special majority All investments must meet MIGA’s environmental and
social criteria and support the host country’s development strategy
6 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
1. MIGA in the World Bank Group 2. MIGA’s Product Lines 3. MIGA Guarantee Examples
3.1 Political Risk Insurance 3.2 Credit Enhancement
4. MIGA’s Value Added 5. MIGA’s Performance Appendix
• MIGA Underwriting Process • Other Project Examples • Award-Winning Projects
7 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
EPC Contract Basic Transaction Structure
Investor Commercial
Bank
Host
Government
EPC
Contract
Performance Bond
Investment
Project
Host Country
8 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
EPC O&M contract
Govt. of Honduras through
COALIANZA
Concession Agreement
Grodco Prodecon
Project: Rehabilitation of 220km of roads and reconstruction of bridges.
30-year concession agreement with a minimum revenue guarantee from the State.
Financing: 15yr USD 145M of debt.
MIGA cover • Against the risks of TR, Expro,
WCD, BoC. • Debt: 15yr, USD 115M cover to
JPMorgan and CIFI. • Equity: 20yr, USD 60M cover to
Grodco. • Both issued 2015.
JPMorgan, USA
Ficohsa, Honduras
Equity Debt
Prodecon, Colombia
Grodco, Colombia
Grodco, Costa Rica
ADASA
Direct Agreement
CIFI, Panama
Political Risk Insurance – Expropriation, Currency Inconvertibility and Transfer Restriction, War and Civil Disturbance, Breach of Contract Cover Autopistas del Atlantico S.A. en C.V., Honduras
Guarantee holder
Project enterprise Obligor
9 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
1. MIGA in the World Bank Group 2. MIGA’s Product Lines 3. MIGA Guarantee Examples
3.1 Political Risk Insurance 3.2 Credit Enhancement
4. MIGA’s Value Added 5. MIGA’s Performance Appendix
• MIGA Underwriting Process • Other Project Examples • Award-Winning Projects
10 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Power Purchase Agreement
Non-Honoring of Sovereign Financial Obligations Ashuganj South Power Generation Project, Bangladesh (Buyer Credit Facility)
Project: Construction of the 450MW gas-fired combined cycle Ashuganj Power Plant
Debt financing arranged by HSBC and consisting of ECA tranche (Hermes, ONDD and CESCE) & MIGA-covered tranche
MIGA Cover:
• Amount: $251m
• Tenor: 13 years
• Issued: December 2012
APSCL
Ashuganj South Power Project
Subcontractors
EPC Contractors (Consortium)
BPDB (Power Utility)
Petrobangla (Gas Utility)
Gas Sales Agreement
Commercial Facility
Agreement (Debt
Financing)
HSBC Swap Agreement
Intercreditor Agreement
Government of Bangladesh – MOF
HSBC and Participating Banks
Obligor Guarantee holder Project
EPC Contract
11 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Loan
Government of Panama – Secretariat
of the Metro
Citi BTMU Mizuho
Citi (Guaranteed by COFACE, CESCE);
Andean Dev. Corp; GoP Cash & T Notes
EPC Contractor
Line One Consortium EPC Contract
O&M Contractor
TMB-Ayesa-Inelectra O&M Contract
Line 1 Metro Project
Metro de Panama S. A. (Operator)
Project: Construction of first line of Panama metro-rail, connecting northern and southern Panama City
MIGA Cover
• Amount: $320 million
• Tenor: 12 years
• Issued: June 2012
Loan
Non-Honoring of Sovereign Financial Obligations Panama City Metro Project, Panama (Buyer Credit Facility)
Obligor Guarantee holder Project
12 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
1. MIGA in the World Bank Group 2. MIGA’s Product Lines 3. MIGA Guarantee Examples
3.1 Political Risk Insurance 3.2 Credit Enhancement
4. MIGA’s Value Added 5. MIGA’s Performance Appendix
• MIGA Underwriting Process • Other Project Examples • Award-Winning Projects
13 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Strong pre-claim management
Highly rated
Financially stable
Strong Risk Appetite
Environmental and social risk mitigation
• Management of risks at pre-claim level (100+ pre- claims
among over 800 projects. Two claims paid for expropriation, six for war and civil disturbance)
• Leveraging the World Bank network
• Highly rated multilateral by Basel Committee • Reduce risk weighting and capital provisioning
• Strong capital base • Mobilize reinsurance capacity
• Operates in challenging markets • Longer tenors (15 years)
• Best practices in environmental and social standards
MIGA’s Value Added
14 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
1. MIGA in the World Bank Group 2. MIGA’s Product Lines 3. MIGA Guarantee Examples
3.1 Political Risk Insurance 3.2 Credit Enhancement
4. MIGA’s Value Added 5. MIGA’s Performance Appendix
• MIGA Underwriting Process • Other Project Examples • Award-Winning Projects
15 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
MIGA’s New Guarantee Issuance (US$ billion in fiscal year)
1,5
2,1
2,7 2,8
3,2
2,8
2010 2011 2012 2013 2014 2015 2016 July-March
3.6
16 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Supported more than 800
projects in 109 countries
MIGA’s Gross Exposure (US$ billion in fiscal year)
5,3
6,5
7,3 7,7
9,1
10,3 10,8
12,4 12,5
2007 2008 2009 2010 2011 2012 2013 2014 2015
14.3
2016 July-March
17 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
1. MIGA in the World Bank Group 2. MIGA’s Product Lines 3. MIGA Guarantee Examples
3.1 Political Risk Insurance 3.2 Credit Enhancement
4. MIGA’s Value Added 5. MIGA’s Performance Appendix
• MIGA Underwriting Process • Other Project Examples • Award-Winning Projects
18 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Underwriting Process
Preliminary Application
Definitive Application (fees apply)
Initial Screening Meeting
Underwriting • Analysis of development impact • Environmental and social review • Integrity checks • Economic, financial viability assessment • Pricing and reinsurance
Monitoring/Evaluation
Second Internal Review Meeting
Board Approval
Contract Preparation & Signing
Host Country Approval
Public Disclosure
Investor
19 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
MIGA Contacts
Senior Management Team, Washington DC
Keiko HONDA Executive Vice-President and CEO +1 202 473 2503 [email protected]
Karin M.FINKELSTON Vice-President and COO +1 202 473 7768 [email protected]
Sector Managers, Washington DC
Marcus WILLIAMS Energy and Extractive Industries (acting) +1 202 473 1023 [email protected]
Olga SCLOVSCAIA Finance and Capital Markets +1 202 458 2823 [email protected]
Carlo BONGIANNI Infrastructure (Telecom Transport and Water) +1 202 473 4615 [email protected]
Nabil FAWAZ Agribusiness and General Services +1 202 473 8437 [email protected]
MIGA Hubs - Asia and Europe offices
Ana-Mita BETANCOURT Director and General Counsel +1 202 458 7124 [email protected]
Santiago ASSALINI Director Finance and Risk +1 202 458 5060 [email protected]
Tim HISTED Head – South and Southeast Asia +1 852 2509 8163 [email protected]
Jae Hyung KWON Head – North Asia +82 (0) 32 713 7020 [email protected]
Dan BILLER Co-Director (acting) Economics and Sustainability +1 202 473 3037 [email protected]
Elena PALEI Head – Europe Hub +33 1 40 69 31 58 [email protected]
Muhamet FALL Director (acting) Operations +1 202 458 2695 [email protected]
Yasser IBRAHIM Co-Director (acting) Economics and Sustainability +1 202 473 8645 [email protected]
20 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Award-Winning Projects Guaranteed by MIGA
African Power Deal of the Year 2012 Azito Thermal Power Plant & Expansion, Côte d’Ivoire
Deal of the Year 2014 São Paulo Sustainable Transport, Brazil
Deal of the Year 2013 Cambambe Hydropower, Angola
Americas Deal of the Year 2013 Panama Metro Line One
Asia- Pacific Deal of the Year 2012 Ashuganj Power Station, Bangladesh
Deal of the Year 2012 Passenger-Car Ferry TANIT, Tunisia
Deal of the Year 2012 Istanbul Metro
Best Deals of the Year 2015 Oyu Tolgoi, Mongolia
Multi-Sourced Financing 2015 Azura-Edo, Nigeria
Best Asia-Pacific Deals of the Year 2015 Mira Power Ltd. (Gulpur Hydro), Pakistan
Power Deal of the Year 2012 Azito Thermal Power Plant & Expansion, Côte d’Ivoire
African Transport Deal of the Year 2012 Henri Konan Bedié Bridge, Côte d’Ivoire
Best Infrastructure Financing: Central America 2015 Corredor Turistico, Honduras
Beyond Business Awards 2012 Chayton Atlas Investments, Zambia
Deal of the Year 2015 Senegal Swap 2
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April 2016
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