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Risk Mitigation for Investments in MOZAMBIQUE. Christophe Bellinger Director, Europe October 3, 2003. History and Membership. Mission: Facilitate FDI into developing member countries Founded April 1988 Field offices in Africa, Asia and Europe

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Risk Mitigation for Investments in MOZAMBIQUE

Christophe Bellinger

Director, Europe

October 3, 2003

history and membership
History and Membership
  • Mission: Facilitate FDI into developing member countries
  • Founded April 1988
  • Field offices in Africa, Asia and Europe
  • Total FDI Facilitated (est.): $50 billion; total coverage: US$12.4 billion
  • 163 Members
    • 22 Category One countries
    • 141 Category Two countries
miga products
MIGA Products

Insurance Against Non-Commercial Risks

  • protect investors and financial institutions from non-commercial risks
      • War and civil disturbance
      • Transfer restriction and inconvertibility
      • Expropriation
      • Breach of contract
  • coverage for medium to long-term investments (3 to 15/20 years)
  • complement public and private political risk insurers

Investment Promotion and Mediation Services

  • advice to investment intermediaries
  • on-line investment promotion services
  • mediation services and dispute resolution between investors and host countries
  • Training to public and private political risk insurers
miga s guarantee program host country approval
MIGA’S GUARANTEE PROGRAMHost Country Approval
  • All MIGA-guaranteed projects must be approved by the host country
  • Purpose:
    • Inform host country about project and MIGA coverage
    • Ensure that MIGA coverage is consistent with host country development priorities
  • Approval is not a government counter-guarantee, nor does it imply a contingent liability
miga s guarantee program what does miga cover
MIGA’S GUARANTEE PROGRAMWhat Does MIGA Cover?
  • equity and quasi-equity
  • shareholder loans and loan guaranties
  • commercial loans
  • other forms of investments
    • capital markets transactions
    • technical assistance
    • management contracts
    • operating leases
    • franchising and licensing agreements
    • performance bonds
    • movable property
    • turnkey contracts
guarantees portfolio gross exposure by region and sector in percent as of 06 30 03
Guarantees Portfoliogross Exposure, by region* and sector, in percent (as of 06/30/03)

Latin American and Caribbean

Europe and Central Asia

Sub-Saharan Africa

Asia and the Pacific

Middle East and North Africa

43

26

19

12

3

$5.1 B

Infrastructure

Financial

Manufacturing

Mining

Oil and Gas

Tourism

Services

Agribusiness

41

29

10

6

6

4

3

1

* Figures exceed 100% due to master contract with one client

miga priority areas
MIGA Priority Areas
  • IDA-eligible countries
  • Africa
  • South-South investments
  • SMEs
  • Complex infrastructure projects

---------------------

  • Conflict-affected countries
  • Under-represented regions (MENA, Africa, Asia)
fdi trends for sub saharan africa
FDI Trends for Sub-Saharan Africa

13,814

FDI

($ million)

  • Less than 1% of global FDI flows
  • Less than 5% of FDI flows into developing countries
  • Majority of FDI into only 3 countries: South Africa, Angola, Nigeria

8,092

7,000

6,506

6,076

2002*

1998

1999

2000

2001

*estimate

miga guarantees portfolio in africa
MIGA Guarantees Portfolio in Africa

893

Gross exposure

($ million)

788

  • Total issuance: Over $1.1 billion in 23 countries
  • FDI facilitated: $5.3 billion (est.)
  • FY99: 8% of portfolio – FY03: 18%
  • FY99-03: 58 projects covered

621

524

294

FY03*

FY99

FY00

FY01

FY02

*estimate

miga in mozambique
MIGA in Mozambique
  • Mozambique is MIGA’s 4th largest host country, overall and MIGA’s largest host country in Africa
  • MIGA’s Guarantees have facilitated $2.8 billion in FDI into the country
  • MIGA’s outstanding portfolio in Mozambique consists of 18 contracts of guarantee

Exposure: 5.2% of the Agency’s gross exposure

Total of $262 million in gross exposure and $192 million in net exposure

guarantees in mozambique
Guarantees in Mozambique
  • MIGA currently underwriting 4 projects in Mozambique (total coverage: $100 million)
  • In the second half of FY03, MIGA supported 3 important projects (issuing $107 million in coverage)
      • Sasol (Oil & Gas)
      • Moma (mining)
      • Maputo Port (infrastructure)
case study sasol mozambique
CASE STUDY: Sasol/Mozambique

Development Impact:

  • Over $2 billion in payments, taxes, etc. to Mozambique
  • Local purchases: over $1 million/year
  • Job creation
  • Improved infrastructure
  • Landmine removal

Investors

  • Sasol Gas Holdings; Sasol Petroleum International (South Africa)
  • gas field and pipeline
  • equity coverage
  • $72 million in guarantees for 15 years against:
    • transfer restriction
    • expropriation
    • war and civil disturbance
    • breach of contract
  • South-South, IDA, post-conflict investment
  • Joint project with WB, IFC
investment marketing services in mozambique
Investment Marketing Services in Mozambique
  • MIGA works with the Mozambique Investment Promotion Center (CPI) to support its efforts to attract FDI and strengthen linkages with the local business community
  • In FY03, MIGA focused on the completion of a baseline evaluation of Mozambique as a beneficiary under MIGA-Swiss Partnership (MSP)
  • MIGA completed the investigations required to define a targeted technical assistance program under the MSP
  • Under MSP, MIGA carried out an assessment of country’s apparel sector: an apparel industry outreach program for Mozambique to Honk Kong in September 2003
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Thank you

www.miga.org

Christophe Bellinger

Director, Europe

66 Avenue d’Iena

75116 Paris

Tel: (33) 1 40 69 32 75

Justin Kouakou

Senior Underwriter

66 Avenue d’Iena

75116 Paris

Tel: (33) 1 40 69 32 81