The Multilateral Investment Guarantee Agency (MIGA) in the financial year 2021 (FY21) issued $5.6 billion in COVID-19 relief to date as part of their $6.5 billion COVID-19 Response Program. In FY21, 25% of MIGA issuances were in low-income countries and fragile settings and 26% went towards supporting climate finance.
MIGA projects initiated during FY21 are expected to provide 784,000 people with new or better electricity service, create nearly 14,600 jobs, generate over $362 million in taxes for the host countries, and enable about $1.3 billion in loans, among other benefits. MIGA, whose mandate is to help drive impactful foreign direct investment to developing countries, issued nearly $5.2 billion in guarantees to cross-border private investors and helped mobilise $4.7 billion in total financing in FY21.
Climate finance was again a key priority for MIGA in FY21. MIGA products helped cross-border investors protect their long-term investments in climate mitigation and climate adaptation activities across diverse markets and regions. In FY21, MIGA issued $1.36 billion of guarantees supporting climate change mitigation or adaptation in 22 countries across four regions, which represents 26% of our total guarantee issuance.
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“We are expanding the COVID-19 Response Program we launched last year for two more years to $10-$12bn. This is testament to the counter-cyclical role MIGA has played in mobilising private investment amid the pandemic,” MIGA Executive Vice President Hiroshi Matano said. “MIGA’s commitment to climate mitigation and climate adaptation activities also continues to grow rapidly, up approximately 20% from only five years ago.”
MIGA programme prioritising climate change in FY21 and beyond
In June, the World Bank Group released its second Climate Change Action Plan (CCAP), which underscores its continued commitment to address climate change, especially in low-income countries and fragile settings. To fulfil the requirements of the new CCAP, MIGA will align 100% of Board approved real sector operations with the Paris Agreement goals in the next four years. MIGA’s Strategy and Business Outlook for FY21-23 was also designed to track CCAP goals.
MIGA provided guarantees for several impactful projects in FY21:
- BBOXX off-grid solar energy project in Rwanda, Kenya, and the Democratic Republic of Congo is expected to offset approximately 1.9 million metric tons of CO2e in the three countries over the next 8 years.
- MIGA’s first engagement in The Bahamas will guarantee loans to modernise two public hospitals and provide financing to micro, small and medium enterprises.
- The Escotel project in Sierra Leone and Liberia will expand the use of solar powered cell phone towers, displacing heavy reliance on diesel generators and avoiding tons of CO2 emissions.
Additionally, in FY21, MIGA, working in conjunction with International Finance Corporation (IFC) and the Compliance Advisor Ombudsman (CAO), developed and won Board approval for a comprehensive new IFC/MIGA Independent Accountability Mechanism Policy that further extends MIGA’s leadership in environmental and social sustainability.
MIGA and IFC also secured Board approval for a joint Trade Finance Guarantee Initiative through which MIGA will issue $1 billion in new trade finance guarantees to support trade flows of critical goods, including food and medical equipment, in low income and fragile countries to help them recover from the impacts of the COVID-19 pandemic.
MIGA also launched its first Gender Strategy Implementation Plan in FY21, reinforcing its commitment to integrate gender more explicitly into all aspects of MIGA’s business.