The Multilateral Investment Guarantee Agency is an affiliate of the World Bank. This Agency was established to support economic growth, promote foreign direct investment in developing countries to improve people's lives in 1988. Therefore, it provides insurance for investments. Today, there are 182 countries that are members of the Agency.
MIGA, especially, helps investors and lenders cope with some risk by insuring projects. These risks are listed in Article 11 of the MIGA Agreement.
Currency Incorvertibility and Transfer Restriction: It protects against losses arising from the inability of an investor to convert the local currency to foreign currency or to transfer foreign currency other than the local currency.
Expropriation: It provides protection against losses caused by the government's actions on the insured investment at the location of the investment.
War, Terrorism and Civil Disturbance: It provides protection against loss, damage or destruction of tangible assets caused by political unrest in the country of investment, or collective work interruption.
Breach of Contract: It provides protection against losses arising from the breach of the contract with the investor by the government in the country of investment.
Non-Honoring of Financial Obligations: In case of non-fulfillment of financial obligations, it provides loans to states and state-owned enterprises.
Generally, MIGA provides guarantees to investors who are citizens of member countries or organizations of member countries.
MIGA not only insures new investments, but also supports investments related to the expansion, modernization and improvement of existing projects. For MIGA to support the project, the project must comply with the development goals of the host country, comply with MIGA's Social and Environmental Sustainability Policy and anti-corruption and fraud standards, and also be financially viable.
The warranty period of MIGA, which provides a maximum insurance of 720 million dollars per country, varies between 3 years and 20 years. It provides guarantees up to 90% of the investment in equity investments, up to 95% of the principal for loan and loan guarantees, and 90% of the total value of payments due for other MIGA Agreement-based agreements.
In order to apply for the MIGA guarantee, the applicant must prepare a pre-application. MIGA staff determines within three working days whether a project is eligible for coverage. If it is suitable for the project, a Final Application letter is sent to the applicant. Upon the request of the applicant, MIGA generally provides a guarantee within three to four months.