Multilateral Investment Guarantee AgencyWorld Bank Group

VOL 10 | NO 3 | JUL AUG SEP 2002

Agency Teams up with Asian Development Bank | 3Playing a Counter-cyclical Role in a Difficult Environment | 5Encouraging FDI into Mozambique | 6Field-Based Network Opens Doors for European Investors | 9

MIGA NEWS | JUL AUG SEP 2002 page 1

See MIGA OPENS OFFICE, p. 8

See SYMPOSIUM, p. 3

MIGA Opens

SingaporeOfficeNew location to help bridgeinvestment gap in Asia

On September 17, 2002, MIGA officially cut theribbon for its new Asia regional office, locatedin Singapore, with a half-day seminar attendedby more than 100 local business and govern-ment representatives. Also in attendance wereforeign banks, companies, law firms, and agen-cies, such as Malaysia’s export credit insurance

INVESTMENT INSURANCE MARKETAT A CROSSROADS

Symposium HighlightsGap between Investors

and InsurersWith the global insurance industry hit hard bythe events of 9/11 and the Argentine crisis,investors face a hardening of the private politi-cal risk insurance market, with a reduction incapacity and shorter tenors for coverage.Meanwhile, investors that are going ahead withprojects in developing countries are demand-ing more comprehensive insurance coverage,greater clarity in contract wording, and gener-ally, better terms and conditions. In this envi-ronment of changing risk perceptions andneeds, there is scope for strengthening private-public partnerships in the insurance industryto help bridge the divide.

This was the key finding of a symposiumon political risk management organized by theMultilateral Investment Guarantee Agency(MIGA), a member of the World Bank Group,and Georgetown University’s School of ForeignService. The event, held in Washington, DC, onOctober 25, 2002, drew together 130 of theworld’s foremost practitioners from the publicand private political risk insurance (PRI) mar-kets, investors, consultants, and academics.

The symposium examined the industry inthe aftermath of 9/11, the Argentine crisis, and

other events, looking at changes in capacity,tenor and contract language, claims experi-ence, and the role of reinsurance in shaping thenew PRI marketplace. Discussants also lookedat issues from the viewpoints of both equityinvestors and lenders, focusing on topics suchas breach of contract, sub-sovereign risk, deval-uation coverage, and waiting periods, as well asalternative risk mitigation tools. The final panelfeatured the views of brokers, consultants, andacademics on perceived gaps betweeninvestors’ political risk insurance needs andwhat insurers are currently offering, as well aspossible solutions to bridge these gaps.

“These issues are particularly pertinent totomorrow’s market. We need a new vision forour industry because many of the underlyingrisks have changed,” said Motomichi Ikawa,executive vice president of MIGA, kicking offthe event. “Some types of political risks arebecoming more associated with economiccrises and less with willful political acts of gov-ernments. Investors are questioning the effec-tiveness of traditional political risk insurancecoverages and wanting more comprehensiveproducts that include some portion of com-mercial risks.”

Facing their largest aggregate loss in his-tory following 9/11, insurers are also beingforced to reevaluate their views of the risk asso-ciated with foreign investment. Discussantsagreed that the result has been a significantreduction in the amount of insurance availableto cover “risky” investments.“We are operatingin a new environment, and insurers have had tobe much more precise about the perils they areactually prepared to cover,”said presenter BrianDuperreault, chairman and CEO of ACELimited, a leading reinsurer in the market.

In particular, PRI providers are beingasked to fill in the gaps left by property/casual-ty insurers, who are now routinely excludingterrorism and sabotage coverage from theirpolicies. Since many lenders require this cover-age as part of their loan agreements, manypolitical risk insurers are now seeing great

PHOTOS | Symposium participants discusspossible solutions to mismatch between whatinvestors want and what insurers provide

demand for stand-alone terrorism and sabo-tage policies, especially for projects in OECDcountries.

There were two views expressed on pric-ing. While some said that prices have gone upas a result of the decrease in overall insurancecapacity, others pointed out that prices need tobe competitive because of fewer good transac-tions in the marketplace.

trips and

events

MIGA staff will be traveling to the following locations over the next few months. If you would like to meet with them, please contact Ms. Wyfield Chow atwchow1@worldbank.org.

Nov. 21-22 Hong Kong, China Philippe Valahu, Chief, Asia OperationsMari Kogiso, Tokyo Representative

Nov. 26-27 Bonn, Germany Monique Koning, Manager, Special ProjectsNov. 30-Dec. 8 Yaounde, Cameroon Mansour Kane, Regional Manager, Africa, Asia

and the Middle East

Dec. 10-12 Amman, Jordan, Christophe Bellinger, Director, EuropeDec. 12-14 Beirut, Lebanon Christophe Bellinger, Director, EuropeDec. 15-17 Damascus, Syria Christophe Bellinger, Director, EuropeDec. 17-19 Tehran, Iran Christophe Bellinger, Director, Europe

Since its independence more than ten yearsago, Armenia has experienced strong macro-economic performance, with growth ratesaccelerating to close to 10 percent in 2001 andthe first half of 2002. Despite this, job opportu-nities remain stagnant and just under half thepopulation lives below the poverty line.

This is attributed in part to the slowgrowth of new private enterprises and a lack ofrestructuring of existing ones, caused by gov-ernment interference, a shortage of necessaryskills, and investors’ perceptions of high politi-cal risks. While Armenia itself has not sufferedfrom political instability, it is located in a polit-ically unstable region, and is landlocked, withdifficult transport routes. In 2001,Armenia wasable to only attract $140 million in FDI.Business and economic conditions, however,have been improving recently, as reflected inaccelerated growth and an estimated reductionin poverty.

Accordingly, one of the World BankGroup’s primary goals for Armenia is the devel-opment of its private sector. As a result of theBank’s and other partners’ help, the impact onthe ground has been considerable. The busi-ness environment has improved, jobs havebeen created, infrastructure, particularly theroad network, has been rehabilitated, and gov-ernance is being improved.

But further improvements are needed tomake Armenia more competitive, especially

with respect to attracting foreign investment.To address this need, the World Bank andMIGA have teamed up to develop a long-termcapacity-building program for the ArmenianDevelopment Agency (ADA), the agency man-dated to promote exports from and foreigninvestment into Armenia.

The undertaking, in the form of a $1 mil-lion Learning and Innovation Loan, marks thefirst time the Bank is using such a loan for FDI-related technical assistance, and the first timeMIGA has taken a lead role in developing a loanproposal of this type. The project aims to helpADA become an agency with the culture andskills needed to support and facilitate the needsof foreign investors, complemented by an effec-tive outreach program to promote the country’simage and to attract investor interest.

Under the loan, MIGA is helping ADA todevelop a highly targeted investment andexport promotion strategy—providing stafftraining, coaching senior management, prepar-ing terms of reference, and designing anddeveloping a website and a customer-relation-ship management system to better track theprogression of leads from inquiry to transac-tion and post-investment assistance. Futureprogram components include the developmentand implementation of sectoral marketingcampaigns, the creation of promotional materi-als, and staff coaching for participation ininvestment missions and fairs.

MIGA NEWS | JUL AUG SEP 2002 page 2

Investor Investor Host Sector GrossCountry Country Coverage

($ m)

Société Nationale de Télécommunications du Sénégal (Sonatel) Senegal Mali Infrastructure 39.6 *Bank Austria Creditanstalt AG Austria Romania Financial 13.9Bank Austria Creditanstalt AG Austria Bulgaria Financial 23.3Bank Austria Creditanstalt AG Austria Croatia Financial 121.1 *Bank Austria Creditanstalt AG Austria Bosnia & Herzegovina Financial 4.6

* Represents more than one contract

GU

AR

AN

TEES

ISSU

EDfir

st

quar

ter

2003

INVESTMENT MARKETING

Spotlight on Armenia

“This work follows up on preliminaryguidance we provided to ADA, to help theagency create a more focused mandate, amongother things,” says John Wille, interim directorof MIGA’s Investment Marketing ServicesDepartment. “This early assistance helped putADA on a sounder and more effective footing.”

For more information, contact BirgitBraunwieser at 202.473.3075, email bbraun-wieser@worldbank.org.

MIGA signed an agreement with the AsianDevelopment Bank (ADB) in Manila onSeptember 23, 2002, to collaborate in support-ing foreign direct investment into Asia.

According to the Memorandum ofUnderstanding signed by MIGA’s ExecutiveVice President Motomichi Ikawa and ADB VicePresident (Finance and Administration) JohnLintjer, the two agencies will work together topromote economic growth and sustainabledevelopment in Asia through closer collabora-tion on projects and programs.

ADB and MIGA will support joint projectsin which one or both will provide investmentguarantees, in combination with ADB directassistance, such as loans or equity investments.Eligible projects must be financially, technical-ly, and environmentally sound. One such col-laborative project, already undertaken by thetwo agencies, is the Manila North TollwaysCorporation, which entails the expansion andrehabilitation of a toll road in the Philippines.

MIGA and ADB will also work together toincrease awareness about political risk insur-

ance and guarantees in Asia. They will collabo-rate to support private sector development inother ways, such as providing technical assis-tance to governments and investment promo-tion boards.

“The signing of this memorandum, aswell as the recent opening of our regional officein Singapore, signals our commitment toincreasing the flows of foreign investment intothe region,” said Ikawa. “By formalizing ourcooperation with ADB, we take this commit-ment one step further.”

“This partnership creates a powerfulcombination—MIGA’s experience in politicalrisk, and ADB’s regional expertise andresources,” added Lintjer. “Together theystrengthen our hand for private sector develop-ment and reducing poverty in Asia.”

The ADB, the leading multilateral devel-opment finance institution in the Asian andPacific region, helps its developing membercountries through loans, grants, equity invest-ments, and guarantees, including those cover-ing specified non-commercial risks.

MIGA NEWS | JUL AUG SEP 2002 page 3

Agency Teams Up with Asian DevelopmentBank to Promote

Foreign Investmentinto Asia

PHOTO | ADB and MIGA sign memorandum atADB headquarters in Manila. From left, PhilippeValahu, MIGA’s manager for Asia, MotomichiIkawa, MIGA’s executive vice president, andJohn Lintjer, ADB’s vice president, Finance andAdministration

Argentina’s economic difficulty, whichhighlights the changes in underlying risks, ishaving broad repercussions on the PRI indus-try. Many participants felt it would be a test ofhow effective PRI can be in the face of econom-ic collapse. An interesting development hasbeen the exemption, for Berne Union members,from the Central Bank approval of conversionof local currency to dollars. But it is a complexpicture and the potential for inconvertibilityand expropriation claims remains.

“Argentina and a number of other claimsare testing the market, and the market willneed to respond to those that are valid if it is to

be perceived as having value by investors,” saidJulie Martin, a broker with Marsh McLennan.“The political risk market is at a crossroads,”she said, articulating the recurring notion thatthere is a mismatch between what investorswant and what insurers are willing to provide.This is evident in a lot of areas, including cov-erage for currency inconvertibility, where whatmany investors have really wanted is a hedgeagainst commercial risks, such as devaluation.

The Argentine crisis also brings into focusthe need for greater transparency and tightercontract language. Discussants said that morespecific language would help clarify what riskswere being covered, but also pointed to the haz-ards of limiting coverage to a few specific con-cerns. Some argued that insurance policies hadbeen devised and written in a post-World WarII environment and were no longer relevant,despite amendments.

Prescriptions to the ills facing the politicalrisk and insurance industry as a whole rangedfrom “stay the path,” to clarifying expropriationpolicies and providing a larger role for the pub-lic sector, to urging investors to know theirinsurance policies better and take on some therisks themselves.

Symposium participants pointed to anincreasing role for the public sector in thisenvironment, urging it to continue taking thelead in new product development, since it tendsto have a longer-term perspective and moreresources to devote to products that may notappear to be commercially viable right away.The innovation that has characterized theindustry’s explosive growth in recent years is

being threatened by a new cautiousnessbrought on by global events. Public insurers,many agreed, could and should be at the fron-tier in terms of providing coverage for “riskier”countries, re-examining certain coverages, suchas expropriation and inconvertibility, andrethinking the approach to complex projects,particularly in infrastructure, where sovereignperformance risk is perceived to be high. AsPRI capacity and tenors are reduced in the pri-vate market, the public agencies’ role in main-taining large per-project limits and long tenorswill be critical.

“A new distribution of risks among thosewho are best positioned to shoulder them iscritical for sustaining FDI flows into developingcountries,” said Ikawa.“Redistributing the riskswill call for enhanced partnerships and collab-oration among insurers and other risk mitiga-tion entities.” Ikawa called on developing coun-tries to step up their efforts to promote FDI andminimize the risks to investors.

Overall, Ikawa said, he was pleased withthe sharing of knowledge and experienceafforded by the event: “This symposium hasplayed an important role in helping to broadenunderstanding of investors’ needs and insurers’ability to understand and react to those needs.We now need to pursue the key points identi-fied to begin to bridge the market gaps.”

From SYMPOSIUM, p. 1

PHOTO | Symposium co-organizers, GeraldWest, MIGA’s director for Policy andEnvironment (left), and Theodore Moran, pro-fessor of International Business and Finance,School of Foreign Service, GeorgetownUniversity

CREDITS | Angela Gentile

MIGA NEWS | JUL AUG SEP 2002 page 4

In June 2002, less than two months after sub-mitting a definitive guarantee application toMIGA, Keppel Energy Pte. Ltd. of Singaporereceived $130 million in guarantee coverage forits investment of over $100 million in NordesteGeneration Ltda. of Brazil. The MIGA guaran-tee is for three years and protects against therisks of transfer restriction and expropriation.The coverage also includes protection againstthe Brazilian government’s failure to honor itspayment obligation under its guarantee to theelectrical power supply contract issued in favorof Nordeste.

Brazil was in the midst of a severe energycrisis last year, caused by underinvestment innew generation and transmission capacity anda dependence on hydro-generating facilities,which has been affected by a series of droughtsin recent years. The state of Bahia, in northeast-ern Brazil, has been among those most severelyaffected by the droughts, which have causedserious electricity shortages.

To address these shortages, the projectwill install, operate, and maintain a barge-mounted emergency power generation facilityin Bahia. The 190MW power generating facility

will help address short-term demand until per-manent gas-fired power projects are broughton line and can add their energy contributionto the national grid.

In evaluating projects in general, KeppelEnergy identifies possible risks relating tochanges in government, market structure, aswell as to possible payment, operational, andimplementation risks. (See chart.)

The company says that MIGA’s politicalrisk insurance is relevant in mitigating certaintypes of project risks. “In the event of anadverse government action, projects covered byexpropriation policy can continue operations,as the policy would protect the investment’sphysical assets,” says Tan Boon Leng, generalmanager of development at Keppel Energy.

Reliability of revenue payment is anotherrisk that MIGA’s breach of contract policy canmitigate, Keppel Energy says. The ability toconvert local currency and transfer foreign cur-rency for dividends and debt payment are otherconsiderations, which can be protected byMIGA’s coverage against foreign repatriation.

“Through our experience, MIGA has theability to meet fast-track project requirements,”says Leng. “As a member of the World BankGroup, MIGA provides a unique benefit forinvestments in developing countries.”

MIGA recently visited China and India, wheresenior staff held seminars and a series of high-level meetings to inform business and govern-ment representatives about the agency’s guar-antees and technical assistance services.

In late August, MIGA met with some 150members of the Chinese and internationalbusiness communities for a day-long seminarin Beijing. The event, co-hosted by the ChinaExport & Credit Insurance Corporation(Sinosure), provided a platform for MIGA todiscuss ways in which the two agencies’ politi-cal risk insurance programs can help investorsmeet their business goals.

“China has undergone a remarkable inter-nal economic transformation over the past 15

years, with Chinese investors moving more andmore into overseas markets,” said MIGA’sExecutive Vice President, Motomichi Ikawa, atthe seminar. “But investing abroad comes withrisks. MIGA and Sinosure can play an impor-tant role in mitigating noncommercial risks.”

In addition to MIGA’s presentation, theseminar featured talks by the StateDevelopment Planning Commission, theMinistry of Finance, Sinosure, and the ChinaNational Chemical Engineering (Group) Corp.Topics centered on the status of overseas invest-ment in China, the country’s strategy forencouraging domestic companies to expandabroad, and how Chinese enterprises can useSinosure and MIGA’s investment insurance tomake the most of overseas markets.

MIGA and Sinosure signed a memoran-dum of understanding nearly two years ago towork together to facilitate Chinese investmentsinto emerging economies. The seminar is aconcrete result of the cooperation between thetwo organizations.“I hope it will be only one ofmany future efforts to work together as wejointly help Chinese companies compete in theglobal marketplace,” said Ikawa.

A concurrent visit to India resulted in aseries of meetings in Bombay and Delhi, wherestaff co-hosted a seminar organized by theExport Credit Guarantee Corporation of India,took part in a number of workshops organizedby KPMG, and held one-on-one meetings with

major industrial groups. Discussions werefocused, as investors had specific deals in mindand were interested in fully understanding howMIGA’s products could mitigate their risks.

“There is good potential for MIGA toinsure Indian outbound investments,” saysMoina Varkie, MIGA’s chief of CorporateRelations, who led the visit.“Indian companiesare increasingly looking for overseas opportu-nities, especially as they will face more compet-itive pressures post-2005, following the imple-mentation of India’s WTO commitments.”

Investors expressed interest in takingtheir business to China, Africa, the “Stans,” andLatin America. In addition to the private sector,several of the majority state-owned enterprisesare actively looking to invest overseas and haveexpressed a strong interest in working with MIGA.

Agency Reaches Out to

China and India

Guarantee Helps Singaporean Power Provider Set Up

Power Barges in Brazil

POLITICAL RISKS

Government Agency

Project Company

Financing Institution Offshore Shareholders

ProjectRevenue

Breach of Contract Risk

Confiscation, Expropriationand Nationalization Risks

Currency Inconvertibility

Currency Non-transferRisk

LoanRepayment

Dividends

LocalOffshore

Association). MIGA covered 14 such projects inthe past fiscal year.

Yet this is not a role MIGA plays on itsown. Rather, the agency is firmly rooted in theidea that the more it partners with other insur-ers, the stronger it, and the industry, becomes.Last year alone, MIGA signed cooperationagreements with 12 new partners, bringing thetotal number of official partners to 30. By part-nering with national agencies, MIGA is oftenable to increase the amount of coverage thatcan be offered, and can play a critical role inencouraging insurers to support investments innew markets. The same is true of private insur-ers, which may have seen a decrease in theiroverall capacity and terms over the past year.

For example, MIGA’s CooperativeUnderwriting Program has catalyzed $661 mil-lion in capacity since its inception in 1999,including $136.6 million in private capacitymobilized in fiscal 2002. Gubbins, again com-menting in the Berne Union Yearbook, citesMIGA’s Cooperative Underwriting Program as

markets, underscoring the cyclical role of themarketplace. The tighter general conditionsmean a renewed emphasis on public providers.

According to the Berne Union’s 2003Yearbook, official insurers are clearly beginningto lead the market again. “Over the last fiveyears or so, commercial insurers have providednew products with capacity and tenor thatoffered a viable alternative to public sectorinsurance, especially for banks seeking projectfinance support,” says Mark Gubbins, a directorat a London-based brokerage First City Tradeand Political Risks.“Now there is a trend to saythat export credit agencies have their role back,as only a handful of private sector underwrit-ers…can now offer investors substantialcapacity and 7-10 year tenors.”

MIGA is a case-in-point. The agency’scounter-cyclical role in difficult investmentenvironments encourages lenders and insurersto venture into markets where they may nototherwise feel comfortable, to ensure that for-eign investment benefits those who need it

Reading the tea leaves of foreign direct invest-ment is not an easy task, especially when a“crack in the porcelain cup” can tip projectionsin unexpected ways. Despite these complexi-ties, most would agree that given the globaleconomic slowdown, corporate governanceissues, and political uncertainty, the monthsahead will likely see continued retrenchmentand repositioning of overseas investment port-folios—including in developing countries. Thisis the key finding of a number of new reportsrecently issued by groups that track and assessflows of foreign direct investment.

In its recently released annual report, theUnited Nations Conference on Trade andDevelopment noted a 50 percent drop in globalFDI in 2001, from $1,600 billion to $700 billion,the largest drop registered in 30 years.Developed countries fared worse than develop-ing countries, UNCTAD said, registering a 59percent decline in FDI compared with 14 per-cent for developing countries. A further declineis expected this year.

A.T. Kearney’s FDI Confidence Index alsoexpects continuing declines in foreign directinvestment in 2002, but says the downturn doesnot necessarily presage a permanent shift ininvestor habits or structural change in the glob-al economy. Rather, it more likely represents thestart of a period of corporate retrenchment andrepositioning following the boom of the 1990s.

According to the Institute of InternationalFinance, “the overall risk appetite of investorshas waned in recent months and capital flowsto emerging markets in general have slowed.”As a result, net private capital flows are expect-ed to decrease slightly in 2002, from $126 bil-lion last year to about $123 billion.As a share ofemerging market GDP, these flows havedeclined from nearly 4 percent in 1992 to justan estimated 2 percent in 2002. The institutedoes project a modest pickup in private capitalflows for 2003, however, assuming global eco-nomic recovery.

The findings are consistent with MIGA’sexperience over the past fiscal year. The eco-nomic and political environment led to adecline in the volume of guarantees MIGAunderwrote. Although deals around the worldtook longer to close, MIGA saw an increase inthe levels of both inquiries and applicationsfor guarantees, demonstrating the specialassurance that investors are seeking asthey venture into emerging markets.At the same time, the events of thelast year have led to a tighteningin the political risk reinsurance

PLAYING A COUNTER-CYCLICAL ROLE IN A

Difficult Environment

MIGA’s counter-cyclical role in difficult investment environments encour-ages lenders and insurers to venture into markets where they may nototherwise feel comfortable, to ensure that foreign investment benefitsthose who need it most.

MIGA NEWS | JUL AUG SEP 2002 page 5

most. MIGA’s guarantees help skittish investorsface the political risks they see as preventingthem from going ahead with their investments,while making deals more attractive to finan-ciers and even helping to extend the amountand tenor of some loans.

The result? Since its inception 14 yearsago, MIGA has issued more than 600 guaran-tees in 82 countries, for a total of $11 billion incoverage, bringing the estimated amount ofFDI facilitated to more than $47 billion. Theagency has an outstanding portfolio of guaran-tees worth $1.5 billion in 33 of the world’spoorest countries (those eligible for zero-inter-est loans from the International Development

“a shining example” of being able to boost proj-ect capacity by drawing in private underwritersalongside MIGA, and “an extremely successfulproduct.”

Facultative reinsurance is another wayMIGA mobilizes additional capacity, workingwith both public and private insurers on a proj-ect-by-project basis to leverage its capacity tosupport investments in emerging economies.Since its inception, MIGA has mobilized $1.17billion in cumulative capacity.

Above all, when the going gets rough,MIGA can play a powerful counter-cyclical role,helping developing countries compete forincreasingly scarce FDI by removing politicalrisks from the investment equation.

When Mozambique gained independence from Portugal in 1975, its economy was

agriculture-based, with very little industrial development. For more than 17 years,

a prolonged civil war raged in the country, home to 17.6 million inhabitants in

southeastern Africa. Two decades of conflict had taken their toll, leaving

Mozambique one of the poorest, most debt-ridden countries on earth.

MIGA NEWS | JUL AUG SEP 2002 page 6

Starting in 1987, the country embarked on amassive economic reform and privatizationprogram, considered the most active in Africa.Peace and political stability have reigned forthe past decade, and the country is now consid-ered a post-conflict “graduate.”

Since 1997, MIGA has issued guaranteesfor seven projects in Mozambique, totaling$190 million in coverage. Today, Mozambiqueranks ninth in terms of outstanding coverage.MIGA is guaranteeing projects in an array ofsectors, including a project that is rehabilitat-ing the country’s largest sugar estate, seen askey to supporting the country’s reconstruc-tion.

Amid these changes is a single projectthat is having a remarkable impact on manyfronts, putting Mozambique on the map forother investors and helping to kick-start theemerging economy. Launched in 1997, a $1.3billion aluminum smelter, called Mozal, is thelargest foreign investment in Mozambique’shistory and one of the three lowest-cost pro-ducers of aluminum in the world. MIGA is pro-viding $40 million in coverage for loan guar-anties issued by the Industrial DevelopmentCorporation of South Africa (IDC).

The project is a joint venture of IDC, BHPBilliton, a British company, Japan’s MitsubishiCorporation and the government ofMozambique. Mozal currently produces250,000 tons of aluminum ingots a year, main-ly for export, and is being expanded to increaseproduction to 500,000 tons. When the currentexpansion phase is completed, expected by2003, Mozal will be one of the largest alu-minum smelters in the world.

Three years after providing the Mozalguarantee, MIGA extended $70 million in guar-antee coverage to Eskom, South Africa’s elec-tricity company, for new electricity distributionfacilities that provide the critical energy supplyto the Mozal facility. In addition to supplyingthe cheap and sustainable power Mozal needsto operate, the investment also benefits thepeople living in southern Mozambique, SouthAfrica, and Swaziland, by providing low-cost,reliable power 24 hours a day.

In both projects, MIGA guarantees areprotecting the investors against the risks ofexpropriation and war and civil disturbance.MIGA is not the only agency of the World BankGroup to have supported Mozal. The project is atrue showcase of positive synergies among theWorld Bank Group agencies. The InternationalFinancial Corporation has contributed $145million in loans to Mozal, its largest investmentto date.

Perhaps the project’s biggest impact is its“demonstration effect”—showing other for-eign investors that a mega project could be suc-cessfully undertaken in the post-conflict envi-ronment of Mozambique, and giving the coun-try credibility as an investment destination.Several new jumbo deals (over $1 billion)involving foreign investors are now underactive consideration. The project has alsoplayed an important role in creating a blueprintfor assessing and processing FDI proposals,strengthening the government’s capacity andnudging it to develop a more responsive regula-tory framework and investment climate.

The Mozal project has had an importantregional impact, enhancing the viability of theMaputo corridor, promoting regional tradeintegration, increasing traffic through ports,and benefiting the South African economythrough exports, jobs, and government tax rev-enues.

The project contributed an estimated 10percent to Mozambique’s GDP growth in 2001.It employed 9,000 employees, mostlyMozambican, for the first part of constructionand is employing 6,000 for the second part.Once construction is done, Mozal will providejobs for about 860 permanent staff, primarilylocal, with another 4,000 jobs to be created inrelated industries.

Mozal also paved the way for improve-ments in investment legislation, the creationof incentive regimes for different industries,and even the creation of labor organizations.Because there had never been an investmentof this size, various ministries would meetregularly to address impediments as theycame up.

“We’re profoundly changing how busi-ness is done here. This project is in many waysserving as a model for other investors.Everyone is watching what happens,” saysEddy Kenter, Mozal’s manager for Finance andAdministration.

Mozal is also a leader when it comes tostrong corporate citizenship. Through a special

ENCOURAGINGFDI intoMozambique

PHOTOS | Clockwise, top left, student inschool supported by Mozal Trust; Eskom powerplant; workers spraying mosquito-infestedareas; and aerial view of aluminum smelter

CREDITS | Federica Dal Bono and Mozalarchives

MIGA NEWS | j an feb mar 2002 page 7

trust fund—the Mozal Community Develop-ment Trust—the company supports communi-ties living around the smelter. So far, about17,000 people have been impacted by the trust’sactivities. The trust involves all relevant stake-holders, from local and national government toNGOs, and from private sector partners to localcommunities representatives.

The trust’s activities are in communityinfrastructure, education and training, healthand environment, including the provision ofclean water, small business development, andsports and culture. It is developing preventionand awareness programs to fight two ofMozambique’s major plights, AIDS and malar-ia, which pose serious economic threats due toloss of worker productivity and deterrence toforeign investment.

Mozambique ranks eighth in the world interms of HIV infection, with 14 percent of thepopulation infected with the virus. “Educationis the first step in the fight against AIDS,” saysBirgit Holm, director of ADPP, a Danish NGOthat is working with the trust. “We have beendistributing pamphlets with information onHIV prevention and transmission and we nowsee a difference in how people react to informa-tion about AIDS.”

The trust also supports the government’sefforts to prevent malaria by sponsoring a vari-ety of activities, including spraying houses withinsecticides and providing bed nets to local

residents. “Malaria is epidemic inMozambique,” says Elisabeth Street, with theMalaria Research Program of the MedicalResearch Council of Mozambique, another pro-gram that is working with the trust. “Last yearthe spraying campaign financed by Mozalhelped protect more than 25,000 families livingin the [project] area. Since Mozal came onboard in 2001, we have seen a 40 percent reduc-tion in malaria cases.”

A number of important civil works in andaround the project area have also been realizedbecause of Mozal, such as the building of accessroads and bridges, telecommunications sys-tems, an industrial park, and a wastewatertreatment plant. The works include the expan-sion and upgrading of two elementary schools,installation and maintenance of potable watertanks, expansion and upgrading of a healthclinic, and construction of two sport centersand a police station.

“Mozal’s shareholders believe that themeasure of a successful project should gobeyond world-class construction and opera-tional performance, to include world-classenvironmental and social ethical performance,”says Alcido Mausse, director of the trust.

The Democratic Republic of Timor-Leste andRwanda officially joined MIGA in the pastquarter, bringing the agency’s membershiptotals to 159.

Timor-Leste became a full member ofMIGA on July 24, 2002. Signing on behalf of hiscountry was Prime Minister Mari Alkatiri,accompanied by the Minister of Planning andFinance, Maria Madalena Boavida, and IsmailaCeesay, a UN official working with the financeministry.

While Timor-Leste (previously known asEast Timor) has taken great strides in its recon-struction and political transition since 1999,more than two in five residents live below thenational poverty line, making the challengesahead immense.

“We’re happy to have this opportunity todevelop a relationship with MIGA,” PrimeMinister Alkatiri told MIGA News, to not onlyguarantee investments going into Timor-Leste,but also to help encourage investors to taketheir business to his country. He noted thattourism and the environment are two specificareas in which he will be seeking the agency’s help.

“We at MIGA are delighted to see Timor-Leste’s membership materialize so fast,” said

MIGA’s Executive Vice President, MotomichiIkawa.“Post-conflict countries are a priority forMIGA. We are eager to facilitate investment inmany areas, including tourism and telecommu-nications, and stand at the ready to providetechnical assistance in the area of institutionbuilding to help the country attract foreigninvestment.”

In addition to becoming a member ofMIGA, the country joined the IBRD, IDA, andthe International Centre for the Settlement ofInvestment Disputes (ICSID). Timor-Leste alsobecame a member of the InternationalMonetary Fund. The new country is expectedto soon become a member of IFC.

On September 27, 2002, Rwanda joinedTimor-Leste to become a full member of MIGAwith the completion of its membership require-ments, begun 13 years earlier, including pay-ment of the local currency portion of the initialcapital subscription and deposit of the promis-sory note. The membership was followed byRwanda’s election to MIGA’s Board of Directorsduring the World Bank/IMF annual meetingsheld in Washington.

Prosper Musafiri, Rwanda’s director ofMacroeconomics at the Ministry of Financeand Economic Planning, helped complete thebilateral agreements that MIGA negotiates withall its member countries. These agreementsoffer legal protection and facilitate the agency’sguarantee operations.

With a GNP of just $250 per person,Rwanda is one of the world’s poorest countries.Decades of conflict left the country virtually

crippled, both socially and economically. Since1994, the country has seen increasing stabilityand economic growth, thanks to a number ofpeace agreements and a series of reformsfocused on the exchange and trade regime, pri-vatization of state-owned enterprises, publicadministration, budget and financial manage-ment, and private sector development.

“Rwanda is making some good headwayon a number of fronts,” said Motomichi Ikawa,head of MIGA.“I am very pleased that we are ina position to begin offering guarantees to busi-nesses that would like to tap the many invest-ment opportunities that exist in Rwanda and tohelp the country continue on its path of peaceand economic growth.”

Timor-Leste and Rwanda

Join MIGA

PHOTO | Timor-Leste’s Prime Minister MariAlkatiri finalizes his country’s requirements forfull MIGA membership

MIGA NEWS | j an feb march 2001 page MIGA NEWS | JUL AUG SEP 2002 page 8

FDI Xchange (www.fdixchange.com), a freeemail alert service that provides up-to-the-minute information on new foreign directinvestment opportunities and country analysis,is MIGA’s latest electronic product offering.Launched in April of this year, FDI Xchangehelps investors keep abreast of market researchand business environment analysis with thetouch of a button.

You and your colleagues can begin receiv-ing the updates by completing a simple three-step registration process on the FDI Xchangewebsite, detailing your areas of interest by sec-tor, region, and topic.You will then receive peri-odic, customized emails containing a summaryof new information and analysis—with hyper-links to the full text.You will also have access toa web-based archive of information previouslydelivered.

Since it was launched six months ago, FDIXchange has signed up a network of more than50 content providers, including investment pro-motion and privatization agencies, as well asprivate business and government informationproviders that specialize in emerging markets.As a project finance professional, you rely ontimely information. Let FDI Xchange help yougain easy access to the information resourcesrelevant to your emerging market investmentactivities.

For more information, contact StephanDreyhaupt at sdreyhaupt@worldbank.org.

Need information on FDI opportunities?

We’ve got it.

agency. The new office will take aim at increas-ing the agency’s guarantees portfolio in Asia.

Speaking at the opening, MotomichiIkawa, MIGA’s executive vice president, saidthat “while foreign investment into Asia hasonce again reached pre-crisis levels, the recov-ery has been unbalanced. Some countries haverecovered fully, while others continue to see aslump in foreign investment, leaving manybusiness opportunities untapped.”

Also present at the office launch wasPhilippe Valahu, the agency’s manager of Asiaoperations, who will head the office. He said:“MIGA can play a strong counter-cyclical rolein environments such as this, encouraginglenders and insurers to venture into markets

where they may not otherwise feel comfortable.The agency’s decision to open a regional officein Singapore is a further reflection of ourstrong commitment to facilitate investmentinto all countries of the region, especially thosethat are now missing out, as well as to supportregional investors to extend their reach elsewhere.”

Panelists at the seminar included Lee YiShyan, CEO of International EnterpriseSingapore, Woo Chull Chung, Director, Office ofCofinancing Operations, the AsianDevelopment Bank, and senior officials fromthe Ministry of Foreign Affairs and fromKeppel Energy. The event focused on macro-economic trends and potential risks in theregion, and ways MIGA and other private andpublic institutions can help investors feel more

comfortable about taking their investmentsinto markets they perceive to be risky.

“Recent events have shown that it isessential for Singaporean players in the infra-structure services sector, with long-term andheavy investments overseas, to have access torisk mitigation products and services,” saidInternational Enterprise Singapore, which co-hosted the event. “The MIGA office inSingapore is significant as it enables our playersto be more aware and more receptive of usingmitigation tools such as political risk insurancewhen venturing overseas. MIGA’s presence inSingapore also reinforces the country’s statusas an insurance hub for regional risk management.”

Over the past 12 years, MIGA has offered$1.2 billion in gross coverage for 69 projects in11 Asian countries. These guarantees havefacilitated about $8.5 billion in additional FDI.The region currently accounts for 10 percent ofMIGA’s outstanding portfolio. Projects encom-pass a range of sectors, with the portfolio con-centrated on infrastructure projects. Theagency has supported projects in a wide rangeof countries, such as China, Nepal, Pakistan,Bangladesh, Indonesia, and Papua New Guinea.(See related story on Keppel Fels, p. 4.)

“Our Singapore office should help makeall of our services more available to Asianinvestors,” said Ikawa. “We will work closelywith our partners, including IE Singapore,ECICS, and the Asian Development Bank, tomobilize additional insurance capacity for Asia.”

PHOTO | Philippe Valahu, MIGA’s new man-ager for Asia

CREDIT | Suzanne Pelland

From MIGA OPENS OFFICE, p. 1

European investors account for more than halfof all foreign direct investment in developingcountries, according to the 2002 WorldInvestment Report. With this in mind, thePrivate Sector Liaison Network was launched inJanuary 1999 to strengthen the relationshipbetween the World Bank Group and the privatesector in Europe.

There are currently 11 private sector liai-son officers (PSLOs), located in Austria,Belgium, Denmark, Finland, France, Greece,Iceland, Italy, the Netherlands, Portugal, andSwitzerland. The PSLOs are based in theirhome countries and financed by local privatesector intermediary organizations, such aschambers of commerce, export organizationsor business associations.

“The liaison officers operate as strategiclocal ‘door-openers’ to bring the Bank closer tocompanies in Europe and to bring companiesin Europe closer to the Bank,”says Gilles Garcia,an external affairs counselor who oversees thenetwork. “They help disseminate informationabout the World Bank Group by organizinglocal events or facilitating contacts betweenlocal companies and us.” Their presence in thefield also allows them to foster a closer strategicdialogue between the private sector and theBank Group on issues of interest to developingcountries.

The network is essentially comprised ofstaff with private sector backgrounds and anintimate knowledge of specific sectors.“Most ofus focus on small and medium-size enterpris-es, with special attention to how they can con-tribute to development,” says MikeTimmermans, a PSLO based in theNetherlands.“We offer the added knowledge of

our home country’s development and exportsubsidy strategies. We can put it all in context.”The focus on SMEs is natural, Timmermanssays, because European markets are small andSMEs have to look elsewhere to grow. “Weremove obstacles for European SMEs to beengaged in developing countries, and to createpartnerships between the countries,” he says.

On a day-to-day basis, the PSLOs helplocal companies on three major fronts: issuesrelated to the World Bank’s procurement proce-dures, MIGA guarantees, and project financingwith the IFC. Since starting a year ago,Timmermans says he has helped more than 80companies.

“For procurement issues, we give concreteinformation to help companies find the rightWorld Bank contacts,” Timmermans says.“Larger companies have staff to do this, butsmaller companies don’t. We are not theexperts, but we can provide information onpolicies and procedures, and guide companiesthrough the process.”

The PSLOs also help spread the wordabout MIGA by disseminating information onthe agency’s services and organizing investorseminars focused on political risk insurance.Timmermans has organized a few such events,pulling together industry representatives,including the Dutch public risk insurer, NCM,and structured trade finance staff from ABN-AMRO, in addition to MIGA clients. “Hearingfirst-hand the experiences of business col-leagues is a very important way to learn someconcrete ‘dos and don’ts’,” Timmermans says,who adds that several preliminary guaranteeapplications have been submitted as a result ofrecent outreach.

For the IFC, the PSLOs help companiesprepare investment proposals. Timmermansalso rolls up his sleeves to help prepare short-lists for potential consultants for various IFCprojects, such as a wind technology project inBrazil and a tomato paste factory in China.

“With its broad geographical coverage, thenetwork is playing an increasingly importantrole in bringing the World Bank Group closer toits stakeholders,” says Garcia.

MIGA NEWS | JUL AUG SEP 2002 page 9

Field-Based Network Opens Doors for

European Investors

AUSTRIAJosef HoferWKO-Austrian Economic ChamberWiedner Haupstrasse 63A-1045 Vienna (Austria) josef.hofer@wko.att. (43-1) 501 05 43 43f. (43-1) 501 05 143 43

BELGIUMJohan MalinOBCE-Office Belge du CommerceExterieurFederal Trade Point BrusselsBoulevard du Roi Albert II, 30B-1000 Brussels (Belgium)jmalin@obcebdbh.bet. (32-2) 206 37 73f. (32-2) 203 18 12

DENMARKRasoul MikkelsenDTC-Danish Trade CouncilDanish Ministry of Foreign Affairs2, Asiatisk Plads1448 Copenhagen (Denmark) rasmik@um.dkt. (45) 339 21 354f. (45) 339 21 394

FINLANDTero LausalaFINPROProject Advisory ServicesArkadiankatu 2, P.O. Box 90800101 Helsinki (Finland) tero.lausala@finpro.fi t. (358) 204 69 53 75f. (358) 204 69 53 21

FRANCEIsabelle RauxCFCE-French Center of Foreign Trade10, Avenue d’Iena75116 Paris (France)isabelle.raux@cfce.frt. (33-1) 40 73 35 29f. (33-1) 40 73 30 60

GREECETheologia VoulgariDIPEK-InterBalkan and Black SeaBusiness CenterHelexpo, Stand 1554 636 Thessaloniki (Greece)theovoul@dipek.grt. (30-31) 0 282 313 or 286 032f. (30-31) 0 287 333

ICELANDAudbjorg HalldorsdottirOBS-Overseas Business ServicesMinistry for Foreign Affairs andExternal TradeRaudararstig 25IS-150 Reykjavic (Iceland)audbjorg.halldorsdottir@utn.stjr.ist. (354) 56 09 951f. (354) 56 24 878

ITALYGiorgio AmbrosettiPROMOS/CCI-Chamber of Commerceof Milan Via Camperio 120123 Milan (Italy)ambrosetti@mi.camcom.itt. (39-02) 85 15 53 20f. (39-02) 85 15 53 94

NETHERLANDSMike TimmermansEVD-Netherlands Foreign TradeAgencyBezuidenhoutseweg 181P.O. Box 201052500 EC The Hague (Netherlands)Timmermans@evd.nlt. (31-70) 77 88 330f. (31-70) 77 88 252

PORTUGALRui CordovilICEP-Investimentos, Comercio eTurismo de PortugalDireccao de Comercio eInternacionalizacao (DCOI)AV.5 de Outubro, 1011050-051 Lisbon (Portugal) rui.cordovil@icep.ptt. (351-21) 790 94 44f. (351-21) 794 08 26

SWITZERLANDStephane TomagianSOFI-Swiss Organization forFacilitating InvestmentsStauffacherstrasse 45CH-8026 Zurich 4 (Switzerland)Tomagian_Stephane@Sofi.cht. (41-1) 24 92 991f. (41-1) 24 93 133

P R I V A T E S E C T O R L I A I S O N N E T W O R K

PHOTO | Mike Timmermans, PSLO from theNetherlands

CREDIT | Sarief Mesir

MaliSenegalese investor to provide much-needed telephone service

MIGA issued guarantee coverage to SociétéNationale de Télécommunications du Sénégal(Sonatel), a Senegalese company, for its $18million equity investment in Ikatel SA of Mali.The 15-year coverage provides protectionagainst the risks of expropriation, war and civildisturbance, and breach of contract. MIGA isalso providing coverage for an eight-monthbridge loan of $26 million. The guarantees total$44 million.

Mali is one of the world’s poorest coun-tries, ranked 153 out of 162 countries in the2001 Human Development Index. A landlockedcountry, more than half of which is desert, Malihas limited natural resources and tends to rely on two volatile commodities, cotton and gold, for export income. The country’s low rate of teledensity has adversely affected economic growth.

The project will help provide varioustelecommunications services, including fixedlines, wireless, Internet, and satellite communication services, as well as public pay phones. Itwill also establish the country’s first fully digi-tal GSM cellular network, which is expected toimprove the quality and efficiency of mobilephones.

Ikatel aims to reach 250,000 subscribersthrough the project over the next nine years.The undertaking is consonant with Mali’sdevelopment goals, as well as the World BankGroup’s Country Assistance Strategy, whichadvocates increased private sector participa-tion in key sectors, such as telecommunica-tions.

The project represents one of the largestforeign investments in Mali and is expected tooffer many development benefits. It will spurthe growth of several industries, includingsmall businesses and microenterprises, manyof which will provide phone services to thosewho cannot afford a phone. Consumers willbenefit from the diversity of service offerings

prices, and know-how and technical improve-ments. SMEs will receive a critical boostthrough improved access to financing, as willCroatian export-earning companies. It willcontinue to support local community activitiessuch as SOS Children’s Village, and otherhumanitarian efforts, as well as participate indiverse cultural projects in cooperation withBank Austria.

BulgariaGuarantee supports bankexpansion

MIGA recently provided Bank AustriaCreditanstalt AG with a EUR23.8 million guar-antee for its EUR25 million shareholder loan toHVB Bank Bulgaria EAD. The loan will allowHVB Bulgaria to further expand the financingit provides to Bulgarian companies. MIGA’scoverage is for a period of up to eight years andprovides protection against the risk of transferrestriction.

The project is consistent with Bulgaria’sbroader development strategy, supported bythe World Bank Group, which focuses on thepromotion of competitive private sector-ledgrowth. MIGA’s support will help HVB Bulgariaprovide additional medium-term financing tobusinesses, especially small and medium-sizeenterprises (SMEs). The increased availabilityof funds with longer tenors is expected to havea positive impact on the financial sector as well,and will generate competitive loan pricing andterms for Bulgarian companies in addition toimproving SMEs’ access to financing.

At year end, HVB Bulgaria will merge withBiochim, Bulgaria’s fourth largest bank, whichwas acquired by Bank Austria Creditanstalt inOctober 2002. As a subsidiary of the leadingAustrian bank, the bank expects to play a lead-ing role in the ongoing process of privatizationin Bulgaria, providing know-how, technicalsolutions, and new products to the market.

MIGA NEWS | JUL AUG SEP 2002 page 10

and lower costs. The project will also generategovernment revenues in the form of taxes andfees, including a $44 million license fee, whichhas already been paid. Ikatel plans to directlyemploy some 200 local staff and should indi-rectly generate thousands of additional jobs.Other benefits include staff training and a pro-gram that involves building affordable housingfor employees. The project will also help pro-vide new technology to schools, in addition tocontributing to local charities and sponsoringregional cultural and sports events.

CroatiaBank expansion to bolstercountry’s financial sector

MIGA has provided Bank Austria CreditanstaltAG with a guarantee covering its EUR65 mil-lion shareholder loan to HVB Bank Croatia d.d.The guarantee, for EUR61.8 million, providescoverage against the risk of transfer restrictionfor a period of up to 10 years. The project willallow HVB Croatia to further expand its in-country operations, focusing mainly on financ-ing small and medium-size enterprises (SMEs)and on-lending for projects in the energy andfood industry sectors, among others. Throughits upcoming merger with Splitska Banka, thebank is expected to play an even more impor-tant role in the financial sector as the country’sthird largest bank.

The project complements the World BankGroup’s country assistance strategy, which is tohelp Croatia achieve economic growth byimproving the environment and incentives forattracting financial flows, particularly privateand foreign direct investment. To do so, theBank’s efforts are focused on SMEs, improvingaccess to housing finance, encouraging con-tractual savings, and promoting infrastructureinvestments. This follows a number of years oflending for infrastructure and related sectorreforms, focused on addressing the country’spost-war reconstruction needs.

The project, supported by MIGA, isexpected to yield a number of developmentalbenefits. MIGA’s coverage will allow the bank toincrease lending, particularly medium-termfinancing for productive investments, encour-aging competitive pricing and better terms forloans. The project will also introduce newproducts, more efficient services at competitive

p r o j e c t h i g h l i g h t s p r o j e c t h i g h l i g h t s p r o j e c t

MIGA NEWS | JUL AUG SEP 2002 page 1 1

CORPORATE RELATIONSMoina VarkieChieft. 202.473.6170mvarkie@worldbank.org

UNDERWRITING

Latin America and Caribbean,Europe and Central Asia

Patricia Veevers-CarterInfrastructure, oil and gas,and miningt. 202.473.0600pveeverscarter@worldbank.org

Peter JonesFinance, manufacturing,agribusinesses, and services(Syndications and Reinsurance)t. 202.458.0443pjones1@worldbank.org

Africa, Asia and the Middle East

Angela ParisInfrastructure, oil and gast. 202.458.0563aparis@worldbank.org

Mansour KaneFinance, agribusiness,manufacturing, services, and miningt. 202.458.0677mkane2@worldbank.org

INVESTMENT MARKETINGJohn WilleActing DirectorProgram ManagerInformation Products and Servicest. 202.473.2707jwille@worldbank.org

Cecilia SagerSenior Investment Promotion Advisert. 202.458.2076csager@worldbank.org

David BridgmanProgram ManagerCapacity Building and Investment Facilitationt. 202.473.0775dbridgman@worldbank.org

POLICY AND ENVIRONMENTGerald WestDirectort. 202.473.2060gwest1@worldbank.org

Harvey D. Van VeldhuizenEnvironmental Officert. 202.473.3390hvanveldhuizen@worldbank.org

EVALUATIONAysegul Akin-KarasapanDirectort. 202.473.1970aakinkarasapan@worldbank.org

REPRESENTATIVE OFFICESAbidjan, Côte d’IvoireWilliam Dadziekdadzie@worldbank.org

Chiang Mai, ThailandIsabella (Stoehr) Badenocht. 66.9.851.2046 f. 66.53.226.527ibadenoch@worldbank.org

Johannesburg, South AfricaKen Kwakut. 27.11.341.9000kkwaku@worldbank.org

Paris, FranceChristophe Bellingert. 331.40.693.275f. 331.47.237.436cbellinger@worldbank.org

SingaporePhilippe Valahut. 65.63244825f. 65.63242615pvalahu@worldbank.org

Tokyo, JapanMari Kogisot. 81.3.3597.9100 f. 81.3.3597.9101mkogiso@worldbank.org

FOR GENERAL INQUIRIES AND APLICATIONS

Federica Dal BonoCorporate Relations Officert. 202.458.9292fdalbono@worldbank.org

FOR MAILING1818 H Street, NWWashington, DC 20433USA

MIGA News is published quarterly bythe Multilateral Investment

Guarantee Agency, a member of theWorld Bank Group.

EDITORAngela Gentile

DESIGNSuzanne Pelland

EDITORIAL COMMITTEEMoina Varkie

Shamali de SilvaWilliam Dadzie

Daniel VillarMarcus Williams

Lesley Wentworth

To request additional copies, beadded to the MIGA News mailing list,or receive MIGA News electronically,

contact:Wyfield Chow

t. 202.458.9595wchow1@worldbank.org

C O N T A C T M I G A C O N T A C T M I G A C O N T A C T M I G A

Despite the challenges of the past year, MIGAissued $1.4 billion in guarantee coverage for 33projects in 24 developing countries, accordingto the agency’s newly released annual report.This brings the estimated total of FDI facilitat-ed in fiscal 2002, which ended on June 30, to$4.7 billion. The results reflect strong progresson the agency’s priorities, which include sup-port for foreign direct investments in theworld’s poorest countries, including Africa,among developing countries, and in small andmedium-size enterprises.

This year’s report showcases the agency’swork in supporting basic infrastructure,rebuilding conflict-affected countries, encour-

aging cross-border investment among develop-ing countries, and strengthening institutionalcapacity, and reports on the agency’s technicalassistance and legal activities as well.

To order a free copy of the report, contactMs. Wyfield Chow, 1818 H Street, NW,Washington, DC 20433, t. 202.458.9595, oremail wchow1@worldbank.org.

Hot Off the Press

MIGA’s 2002 Annual Report

I N S U R I N G I N V E S T M E N T S E N S U R I N G O P P O R T U N I T I E S

jul aug se

p 2002

I NS I D

E T HI S I S S U

E

Investm

ent Insu

rance M

arket at a

Cross

roads |

Agency

Teams u

p

with A

sian D

evelopment Bank |

Playing a

Counter-cyc

lical R

ole in a D

ifficu

lt Enviro

nment |

Encouraging FDI i

nto M

ozambique |

Field-Base

d Netw

ork Opens D

oors for

European In

vestors

MIGA: Promoting foreign direct investmentinto emerging economies to improvepeople’s lives and reduce poverty.

www.miga.org

Multilateral Investment Guarantee Agency1818 H Street, NW Washington, DC 20433, USA

World Bank Group

jul aug sep 2002

INSID

E THIS ISSU

E

Investment Insurance Market at a Crossroads | Agency Teams up

with Asian Development Bank | Playing a

Counter-cyclical Role in a Difficult Environment |

Encouraging FDI into Mozambique |

Field-Based Network Opens Doors for

European Investors