Institution details
MIGA - Multilateral Investment Guarantee Agency (MIGA)
Key facts
- Established in 1988
- Ownership: Public
- World Bank Group, 1818 H Street
- +1 202 458 2538
- https://www.miga.org
Latest update: 03/12/2021
rating type | rating agency | type | rating |
---|---|---|---|
Institution rating | S&P | Foreign currency | AAA |
Products
- Political risk insurance
- Credit enhancement
- Small Investment Program (SIP)
Political Risk Insurance
- Currency inconvertibility and transfer restriction cover
- Currency depreciation is not covered
- In the event of a claim, MIGA pays compensation in the currency specified in the contract of the guarantee - Expropriation cover
- In addition to outright nationalization and confiscation, “creeping expropriation”—a series of acts that, over time, have an expropriatory effect—is also covered
- Coverage is available on a limited basis for partial expropriation (e.g., confiscation of funds or tangible assets) - War, terrorism, and civil disturbance cover
- This coverage encompasses not only violence in the host country directed against a host country government, but also against foreign governments or foreign investments, including the investor’s government or nationality" - Breach of contract cover
- Breach of contract coverage may be extended to the contractual obligations of state-owned enterprises in certain circumstances
Credit Enhancement
- Non-honouring of financial obligations
- Availability of this product is limited to governments/state-owned enterprises (SOEs) with satisfactory credit ratings
- Availability period: Up to 15 years (20 in some cases)
- Claim determination and payment are subject to defined waiting periods
- Coverage: Up to 95 percent of principal and interest
Small Investment Program (SIP)
- Designed to facilitate investment into SMEs involved in the finance, agribusiness, manufacturing, and services sectors
- SIP offers:
- Coverage up to USD 10 million (the actual size of the investment may be bigger)
- A guarantee package covering currency transfer restriction, expropriation, and war, terrorism, and civil disturbance
- A quick approval process - In order to qualify, the project enterprise must fulfill at least two of the following criteria
- No more than 300 employees
- Total assets not more than USD 15 million
- Total annual sales not more than USD 15 million
Performance highlights
What's new?
- 2018 marked MIGA’s 30th anniversary
- Pricing: Premiums are determined on a per-project basis and vary by country, sector, transaction, and the type of risk insured; premiums are due at the beginning of each contract period
- Duration of guarantee: Minimum of 1 year and maximum of 15 years (possibly 20 years depending on the nature of the project)
- Amount of coverage for equity investments: Up to 90%, plus up to an additional 500% of the investment contribution to cover earnings attributable to, and retained in, the project
- Amount of coverage for loans and loan guarantees: Up to 95% of the principal (or higher as determined on a case-by-case basis), plus up to 150% of the principal to cover interest that accrues over the term of the loan
- Amount of coverage for technical assistance contracts and other contractual agreements: Up to 90% of the total value of payments due under the insured agreement (up to 95% in exceptional circumstances)
- An investor is required to remain at risk for a portion of any loss
- MIGA can currently issue up to USD 250 million of coverage on its own account for a single project, and can cover significantly higher additional amounts through reinsurance arrangements; it can also mobilize additional coverage through co-insurance programs with other political risk insurers
- MIGA has no minimum investment amount
- Fees and pricing - Definitive application fee: USD 5,000 for cover of less than USD 25 million, and USD 10,000 for larger amounts; the application fee is applied toward the initial premium, and is refunded if MIGA rejects the project for any reason - Processing fee: Additional fees may be required for complex projects (e.g., fees may be required to cover the cost of site visits for environmental and social due diligence) - Syndication fee: If applicable, a fee will be applied when MIGA arranges a project’s total insurance requirements through reinsurance