The Multilateral Investment Guarantee Agency (MIGA, see Update 72), the political risk insurance arm of the World Bank Group, announced in mid April the creation of a new Conflict-Affected and Fragile Economies Facility (CAFEF). The facility will be donor funded, with MIGA expecting “an initial amount of $80 million from donor partners”, to be able to “provid[e] aggregate risk mitigation of $400 million in conflict-affected and fragile economies.” Canada has already agreed to provide 20 million Canadian dollars ($19 million). The facility will “provide an initial loss layer to insure investment projects in conflict-affected and fragile economies”. MIGA said: “By supporting projects in labour-intensive industries, such as agribusiness and light manufacturing, the facility will strive to promote direct job creation. Its support to infrastructure projects will underpin further private sector investment and also lead to direct and indirect employment generation.” The Bank’s new strategy calls for more joint work between its different arms (see Update 86), and the negotiations for a replenishment of the Bank’s low-income country arm, the International Development Association, have prioritised work on fragile and conflict-affected states (see Update 85).
MIGA approves new facility for fragile states
26 June 2013