| The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, was established in 1988 with a mandate to encourage the flow of foreign direct investment (FDI) to its developing member countries for economic purposes. To this end, MIGA provides the following services:
Guarantees against non-commercial risk (i.e., political risk insurance) for private investment into its developing member countries. MIGA offers long-term (up to 15 years, and in certain cases, 20 years) political risk insurance coverage to eligible investors for qualified investments in developing member countries. MIGA insures investors against any or all of the following risks:
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Transfer Restriction - Protects against losses arising from an investor's inability to convert local currency into foreign exchange for transfer outside of the host country. |
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Expropriation - Protects 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. In addition to outright nationalization and confiscation, "creeping" expropriation - a series of acts that, over time, have an expropriatory effect - is also covered. |
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Breach of Contract - Protects against losses arising from the host government's breach or repudiation of a contract with the investor. In the event of an alleged breach or repudiation, the investor must be able to invoke a dispute resolution mechanism (e.g., an arbitration) in the underlying contract and obtain an award for damages. |
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War and Civil Disturbance - Protects against loss from damage to, or the destruction or disappearance of, tangible assets caused by politically motivated acts of war or civil disturbance in the host country, including revolution, insurrection, coups d'etat, sabotage, and terrorism. |
MIGA can insure new cross-border investments originating in any MIGA member country, destined for any developing member country. Eligible investments include equity, commercial bank loans, shareholder loans and loan guarantees, technical assistance and management contracts.
Advisory services and capacity-building support to help developing member countries effectively market themselves as investment destinations to prospective foreign investors. These services include:
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Capacity building assistance, supporting the development of effective strategies for attracting and retaining foreign direct investment, as well as enhancing the skills and capabilities of national and provincial investment promotion intermediaries; |
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Investment Facilitation activities, working with member countries to organize investor conferences and missions, particularly in the mining and tourism sectors; and, |
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Dissemination of Information on specific investment opportunities and business operating conditions in emerging markets through FDI.net and the PRI-Center. |
Mediation Services to resolve investment disputes between investors and member countries. MIGA's legal staff also provides advice to member governments concerning the negotiation of bilateral investment treaties and other investment-related issues.
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