Private Sector


Multilateral Investment Guarantee Agency (MIGA)

30 September 2010 | Inside the institutions

The Multilateral Investment Guarantee Agency (MIGA), which forms a part of the World Bank Group, promotes foreign direct investment (FDI) in its 175 member countries. To this end, MIGA provides insurance for companies investing in its developing member countries in the form of guarantees against political risk, as well as advisory services, capacity building support, and mediation services.

MIGA is run by World Bank vice president Izumi Kobayashi, and governed by the Bank’s executive board. MIGA’s member countries have pledged capital of $1.15 billion to the institution, of which 20 per cent has been paid in. The agency also operates using retained earnings.

MIGA insures eligible projects against losses relating to currency transfer restrictions, expropriation, war and civil disturbance and breaches of contract. This is intended to improve lender and investor confidence. MIGA insures private sector investments originating from MIGA member countries destined for developing country member for up to 15 years. These investments include equity, shareholder loans and shareholder loan guarantees.

MIGA’s operational strategy aims to attract investors into difficult operating environments by encouraging developing countries to reform their investment environments and address investor perceptions of political risk. The focus is said to be areas where there is potential to encourage greater change, such as conflict-affected areas and south-south investment.

Since its inception in 1988, MIGA has issued guarantees worth over $21 billion for over 600 projects in 100 developing countries. In the fiscal year 2009 MIGA issued $1.4 billion in investment guarantees for 26 projects. Sub-Saharan Africa, despite being a strategic priority, received only $50 million in guarantees for 10 projects. The Eastern Europe and Central Asia region received the largest volume of guarantees, thanks to support to the region’s banking sector hit by the global financial crisis.

The financial sector accounts for the largest share of MIGA’s outstanding gross portfolio (47 per cent); followed by the infrastructure sector with a 35 per cent share, while agriculture, manufacturing and services take 11 per cent. Oil, gas and mining projects account for 7 per cent of the agency’s portfolio.

MIGA claims to support investment projects that are developmentally sound and meet high social and environmental standards, by applying their own set of safeguard policies. These policies are modelled on the much-criticised IFC performance standards (see Update 72, 71) but with amendments reflecting the agency’s different role.

MIGA also provides other services as part of its overall effort to encourage FDI in the developing world. Together with the World Bank Group’s Foreign Investment Advisory Service (FIAS), MIGA helps developing member countries market themselves as suitable investment destinations to potential foreign investors. Areas of assistance include strategic planning, marketing and obtaining project finance from private banks. For over 10 years MIGA has operated a suite of online information services providing information for international investors about investment opportunities through websites and the Political Risk Insurance Centre (

MIGA also helps resolve investment disputes and MIGA’s legal staff provide advice to member governments regarding the negotiation of bilateral investment treaties and other investment-related issues. The agency may mediate disputes between states and investors not guaranteed by MIGA if disputes “inhibit additional investment to the country”. In such circumstances, MIGA seeks compensation for its mediation services.

MIGA’s operational direction for fiscal years 2009-2011 reiterates the agency’s stated aim of promoting investment in low-income countries, post-conflict countries, complex projects and support for south-south trade. In January 2008, MIGA announced its first ever guarantee for Shariah-compliant project financing (see Update 59).