Sub-Saharan Africa requires $93 billion annually for infrastructure needs but receives only $45 billion, leaving a $17 billion funding gap and $31 billion efficiency gap. Political risk insurance can help mobilize private sector funding by mitigating risks such as expropriation, currency inconvertibility, and breach of contract. The Multilateral Investment Guarantee Agency has seen growth in such insurance issuance and is particularly active in riskier markets below investment grade.

1. How Political Risk Insurance Can Help Further
Investment in Sustainable Infrastructure
May 21, 2014
Global Infrastructure Basel

2. 1MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Sub-Saharan Africa Infrastructure Needs (2008)
Government
Funding
65%
ODA
14%
Private Sector
Funding
21%
Current Sources of
Financing
Not only can we
focus on
mobilizing funding
but also on
tackling the
efficiency gap
$17 billion $ 31 billion
Efficiency
Gap
Funding
Gap
$45 billion
$93 million in
funding needs

3. 2MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Risks Covered
Political Risk
Insurance
(PRI)
Credit Risk
Transfer restriction & currency inconvertibility
Expropriation
War & civil disturbance
Breach of contract
Sovereign
Sub-sovereign
State-owned enterprise
+

4. 3MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
MIGA’s Growth
(New Guarantees Issued, $ billion, FY)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
NHSFO Issued by FY
PRI Issued by FY
Onset of global
financial crisis -
MIGA’s IFI
Initiative launched
Agency established in 1988 NHSFO
introduced
in 2009
NH for SOE
obligors
introduced
Decoupling of debt
and equity,
introduced in 2009
Growth Rate
(CAGR, %, FY03-13)
Total:7.3%
PRI: 3.6%

5. 4MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
 Expansion of underground metro
system on Asian side of Istanbul
 MIGA cover: NHSFO on a loan
provided to MMI by a consortium of
banks, with WestLB acting as facility
agent
 Tenor: 9.5 years
 Amount: €280M, including principal,
interest & premium
Istanbul Metro Project
Turkey

6. 5MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
FDI Growth: Mostly in Investment-grade Countries
136
156
139
111
11 12
+7% p.a.
6
221822
09 10 11 12
214
226
171
136
+16% p.a.
09 10 11 12
5149
34
40
+8% p.a. 67
60
5349
+11% p.a.
09 10 11 12
15141718
-6% p.a.
09 10 11 12
5122
09 10 11 12
FDI Inflows, USD bn
A BBB BB B CCC <CC NR
BB/B/CCC/
<CC and
not rated
Growth
rate:
3.2%
09 10 11 1209 10
71%

7. 6MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
MIGA Activities in Political Risk Insurance – Strong in Riskier Markets
New cover provided in calendar year 2012
* S&P rating used, MIGA non-
honoring risk rating when S&P
not available
41.2 16.710.7 7.9 7.6 2.4
A BBB BB B CCC <CCRating*
0.6% 0% 6.3% 5.0% 2.3% 28.7%MIGA’s
share (%)
Market size
($ billions)
Below investment grade countries
Investment grade countries

8. 7MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
 Construction and operation of power
generation project using methane
gas from Lake Kivu
 MIGA cover: expropriation, transfer
restriction, war & civil disturbance,
breach of contract provided to
investor ContourGlobal
 Tenor: up to 20 years
 Amount: $66.8M
Kivuwatt Power Project
Rwanda

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