miga in lisbon · miga ’s mission to promote foreign direct investment into developing countries...
TRANSCRIPT
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MIGA in LisbonDecember 12 2012
maintaining FDI flows
in a risk-averse world
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Why in Lisbon today?
� Europe: main base for international
investors
� Portugal, a long-standing partner for
MIGA but underutilized
� Support Portuguese investors internationally
(ex: Maputo Port Development Company
S.A.R.L.)
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 2
S.A.R.L.)
� Some characteristics
� Outflow destinations: essentially CEE countries,
Brazil and Sub-Saharan Africa
� Sectors : manufacturing, transportation,
mining, tourism, telecoms…
� MIGA is your institution including for SMEs,
complementing your national system with
COSEC and aicep Portugal Global.
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MIGA’s Mission
to promote foreign direct investment
into developing countries
in order to support economic growth,
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 3
in order to support economic growth,
reduce poverty, and improve people’s lives.
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The World Today: diminished risk appetite
� Sovereign debt crisis in Europe
� Volatility in Middle East Africa
� Emerging market growth – can
it be sustained?
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 4
it be sustained?
� Systemic risks in financial
system
� New Financial regulation
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Research and Knowledge
� World Investment and
Political Risk report
presented today in London in
a joint FT MIGA Summit
� 2012 report focuses on
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 5
� 2012 report focuses on
sovereign default and
expropriation
� Web and social media
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FDI trends
� Global economic recovery stalls
� Global GDP growth estimates for 2012 down to 2.3% from 2.8% in 2011
� Developing country GDP growth estimates for 2012 down to 5.1% from 6.2% in
2011
� FDI falls back
� Global FDI flows declined by from $1.9 trillion in 2011 to $1.7 trillion in 2012
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 6
Global FDI flows declined by from $1.9 trillion in 2011 to $1.7 trillion in 2012
� Developing country FDI inflows declined by 7% to $594 billion in 2012
� FDI from developing economies continues its increase
� Developing country FDI outflows increased by 11% to $237 billion in 2012
� FDI expected to regain speed in medium term
� Developing country FDI inflows to rebound to $697 billion in 2013 and $790
billion in 2014
� MIGA survey – 70% of respondents intend to increase FDI over the next 3 years
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Net FDI Inflows to Developing Countries by Region
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 7
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FDI Outflows from Developing Countries
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 8
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Changes in Foreign Investment Plans
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 9
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Ranking of the most Important Constraints
for FDI in Developing Countries
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 10
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Risk Mitigation Strategies by Foreign Investors
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 11
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How Can MIGA Help Facilitate FDI?
� By being a member of the World Bank Group
� Helping investors and lenders manage some risks
� Leading to capital relief for banks (recognized by Basel II)
� Enhancing credit
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 12
Enhancing credit
� Supporting private investment in infrastructure, services, and other
public goods
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IFC A-LoanPolitical Risk InsuranceGuarantees
World Bank Group Instruments
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 13
IFC A-Loan
IFC B-Loan
IFC C-Loan
Equity
IFC Guarantees (partial
credit structures usually
for local financing)
Interest Rate and Currency
Swaps
Political Risk Insurance
� expropriation
� transfer restriction
� breach of contract
� war & civil
disturbance
� Non-honoring of
sovereign financial
obligations
Guarantees
� partial risk
� partial credit
IBRD Loan
IDA Credits and Grants
Technical Assistance
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What We Do
� Noncommercial risk insurance (guarantees) for investors and lenders
� Dispute resolution services for guaranteed investments
� Research and knowledge services (World Investment and Political Risk
report, pri-center.com)
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 14
report, pri-center.com)
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Priority Areas
� In IDA-eligible countries
� In conflict-affected environments
� From one developing country to
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 15
� From one developing country to
another (South-South)
� In complex projects
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Risks Covered
� Currency inconvertibility and transfer restriction
� Expropriation
� War and civil disturbance
� Breach of contract
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 16
Breach of contract
� Non-honoring of sovereign financial obligations
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Instruments Covered
� Equity
� Shareholder loans
� Debt
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 17
� Loan guarantees
� Non-equity direct investment
� Capital markets
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Eligible Investments
� Cross-border from one
member country
(developed or
developing) into
another developing
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 18
another developing
member country
� Primarily greenfield
investments
� High developmental
impact
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Terms of Coverage
Amount of coverage
� No minimum amount
� Equity covered up to 90% and debt up to 99%
Tenor
� Minimum 1 year, up to 20 years
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 19
� Minimum 1 year, up to 20 years
� Investor can cancel after 3rd anniversary
Pricing
� Decided on per project basis; varies by country, sector, transaction, and type of risk
� Premiums paid annually or semi-annually
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MIGA’s Value Added
� Expertise in complex projects and challenging environments
� Credit enhancement
� Longer tenors (15-20 years)
� World Bank Group “umbrella” of deterrence
� Dispute resolution record
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 20
� Dispute resolution record
� Mobilization of reinsurance capacity
� Environmental and social management
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1. Investor � Marketing and origination
� Preliminary Application
2. MIGA � Definitive Application
� Early Screening Project Review Meeting (“ESM”)-
chaired by the Director of Operations Group
� Underwriting and host country approval
• Developmental impact
• Environmental, social review
• Available online
• Free, confidential
• 2 pages
• Determines eligibility
• More detailed information
• Fees ($5-10k + processing
fees, depending on project)
• Starts underwriting process
MIGA’s Underwriting Process
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 21
• Environmental, social review
• Pricing and reinsurance
• Economic financial viability, country risk
• World Bank Group policy
� Project Review Committee (“PRC”)-Track “A” projects
(complex/high risk)
� Final Approval Meeting (“FAM”)-Track “B” projects
(simpler/low risk)
3. Investor
and MIGA
� Sign contract of guarantee
� Monitoring, evaluation, contract maintenance
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� Project: Design, construction and
operation of toll bridge in Abidjan,
Cote d’Ivoire
� First PPP in Cote d’Ivoire since civil
war and one of the first in West Africa
� MIGA covering all private sector
participants in transaction with cover
on equity, senior and subordinated
Konan Bédié Bridge, Abidjan, Côte d’Ivoire (BoC)
Bouygues, PAIDF, AFC
AfDB, BOAD, ECOWAS
Bouygues, AFC PAIDF
FMO, BMCE, AFC
Senior Multilateral LendersSenior
Lenders
Junior LendersEquity Providers
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 22
on equity, senior and subordinated
loans
� Amount of Guarantees: US$145m
� Tenor of Guarantee: 10-15 years
� Cover: Expro, W&CD, TR and BoC
which included cover on a minimum
revenue guarantee provided by the
State
SOCOPRIM S.A.
Cote d’Ivoire
Concession
Banque Nationaled’Investissement
Total CI
State of Cote d’Ivoire Minimum Revenue
Guarantee
Note: PAIDF = Pan African Infrastructure Development Fund; AFC = Africa Finance Corporation, FMO = Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.; BMCE = BMCE Bank International Plc
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WestLB
LoanNHSFO cover
SociétéGénéra
le
SociétéGénéra
le
Credit Agricol
e
Credit Agricol
e
BNP Paribas
BNP Paribas
Unicredit
Unicredit
INGING
Facility Agent
� Project: Expansion of underground
metro system on Asian side of Istanbul,
Turkey.
� Previous financing included IFC
� Loan Agreement: signed in April 2011
� Amount of Guarantee: €280m,
including principal, interest and
Kadikoy-Kartal Metro Project, Istanbul (NHSFO)
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 23
Makyol JV
Astaldi-Gulermak-Makyol JV
Turkey
IstanbulMunicipality of
Istanbul
Funding
Kadikoy-Kartal-Kaynarca Metro Project Construction
Ulasim
Ownership
Operator
Ownership
Contract
including principal, interest and
premium
� Tenor of Guarantee: 9.5 years
� Cover: NHSFO on a loan provided to
MMI by a consortium of banks, with
WestLB acting as Facility Agent
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BNP ParibasSociété
GénéraleDaewoo
LoanNHSFO Cover
� Project: Financing of a new passenger/car
ferry for Compagnie Tunisienne de
Navigation S.A.
� MIGA stepped in due to last-minute
withdrawal of ECA
� Interest/Currency: Exchange rate1/interest
rate fixed shortly before drawdown
CTN Ferry Financing, Tunisia (NHSFO)
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 24
Tunisia
CTN
MoF TunisiaPayment Obligation
Guarantee
Construction Contract � Amount of Guarantee: €138.8m, including
principal, interest and premium
� Tenor of Guarantee: 13 years
� Cover: NHSFO on a guarantee provided by
MoF on a loan from BNP Paribas and
SocGen to CTN
1. Payment obligation of CTN to Daewoo was in US$,
loan denominated in Euros in order to match revenues
with debt payments
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MIGA’s HighlightsGROSS EXPOSURE ($ BILLION)
5.4
7.37.7
6.5
9.1
10.3
Key Figures
� Supported more than 700 projects for a total of
$27.2 billion during FY90-12
� Portfolio: $10.3 billion
� Issued record $2.7 billion guarantees in FY12
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 25
5.15.4 5.3
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12
MIGA’s Strengths
� Total subscribed capital: $1.9 billion
� Strong capital base and ability to pay
compensation in the event of large-scale losses
� Implied AAA by major credit rating agencies
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Gross ExposureBy region and sector
By region By sector
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 26
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Guarantees Issued in FY12
By region By sector
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 27
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MIGA Managementwww.miga.org
SENIOR MANAGEMENT
Izumi Kobayashi, Executive Vice President
Michel Wormser, Vice President and COO
Edith Quintrell, Director of Operations
Ravi Vish, Director and Chief Economist
Ana-Mita Betancourt, General Counsel
Lakshmi Shyam-Sunder, CFO
Kevin Lu, Director
Marcus Williams, Strategy and Operations Advisor
REGIONAL RESPONSIBILITIES
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 28
www.miga.orgREGIONAL RESPONSIBILITIES
Asia—Kevin Lu
Europe—Olivier Lambert
SECTOR LEADERS
Nabil Fawaz, Agribusiness, Manufacturing, and Services
Olga Sclovscaia, Financial Sector and Telecommunications
Margaret (Peggy) Walsh, Infrastructure
Antonio Barbalho, Oil, Gas, Mining, Chemicals, and Energy
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Contacting MIGA
Olivier J. L. Lambert
Regional Manager EMEA
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 29
+33 1 40 69 31 58
www.miga.org
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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 SI 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