MIGA (Multilateral Investment Guarantee Agency), the political risk insurance arm of the World Bank Group, and NEXI, Japan’s state-owned export credit agency, have entered an official agreement to share risk, through reinsurance, on investments made by Japanese firms in developing countries.
The arrangement will see MIGA and NEXI purchase reinsurance policies from each other, reducing the exposure either would face individually and allowing both agencies to support projects that may otherwise be too challenging to handle alone.
MIGA currently provides over US $2 billion in guarantees for investments made by Japanese firms across the globe, making it the fourth largest supporter among investor countries.
Keiko Honda, Executive Vice President and Chief Executive Officer (CEO) at MIGA, said:”MIGA’s strategy for the next few years focuses on mobilizing private capital to three priority areas: clean energy, fragile and conflict-affected situations, and low-income countries.
“This agreement with NEXI helps us work more closely with Japanese firms, and to turn our strategy into results.”
Additionally, Kazuhiko Bando, Chairman and CEO of NEXI, commented:” Through the MOU, MIGA and NEXI are expected to use their own strengths to help Japanese companies develop effective investment projects.
“I definitely believe that the collaboration between MIGA and NEXI will make a further positive contribution to many countries.”
The parties made the agreement official by signing a Memorandum of Understanding on the sidelines of the 2018 Japan-Africa Public–Private Economic Forum held in Johannesburg, South Africa.
MIGA was created in 1988 to promote foreign direct investment in emerging economies by helping to mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance; and by offering credit enhancement to private investors and lenders.
