Political Risk Insurance Solutions

1. MIGA in the World Bank Group

2. Product Line
3. Underwriting Procedures
4. Pricing
5. Dispute Resolution
6. MIGA’s Performance
7. Project Structures
8. Annex: Summary of PRI covers for Equity and
Debt

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 1

 World Bank Group

IBRD IDA IFC MIGA

International Bank International International Multilateral
for Reconstruction Development Finance Investment
and Development Association Corporation Guarantee Agency
Est. 1945 Est. 1960 Est. 1956 Est. 1988

Support countries’ Support countries’ Promote private sector Promote cross-border

Role: economic and economic and development investment and lending
institutional development institutional development

Governments of member Governments of member Investors in member Debt and Equity investors in
countries with annual per countries with annual per countries member countries
Clients:
capita income between capita income of less than
$1,025 and $6,055 $1,025

- Technical Assistance - Technical Assistance - Equity/Quasi-Equity - Political Risk Insurance

Products: - Credit Enhancement
- Loans - Interest-Free Loans - Long-Term Loans
- Policy Advice - Policy Advice - Advisory Services

Shared Mission: “End extreme poverty and build shared prosperity”

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 2

 1. MIGA in the World Bank Group
2. Product Line
3. Underwriting Procedures
4. Pricing
5. Dispute Resolution
6. MIGA’s Performance
7. Project Structures
8. Annex: Summary of PRI covers for Equity and
Debt

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 3

Risks Faced by Investors and Lenders: Political Risk Insurance Solutions

Inability to convert or transfer dividends or Transfer Restriction and

loan payments due to FX restrictions Convertibility Cover

Destruction or interruption of business due to War and Civil Disturbance

political violence Cover

Government nationalizes or otherwise makes

it impossible to operate the project through Expropriation Cover
discriminatory measures

Failure of government to honor obligations

under contractual agreements and Breach of Contract Cover
subsequent failure to honor arbitral award

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 4

Inconvertibility and Transfer Restriction

• Protects against losses arising from inability to:

– convert local currency into foreign exchange within the host country
– transfer funds out of the host country

• Currency depreciation and devaluation not covered

• In case of convertibility restrictions, MIGA’s compensation is based
on official rate of exchange at the date of loss
• Conversion and transfer have to be lawful in the host country at the
time MIGA’s coverage is issued

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 5

 War and Civil Disturbance

• Three forms of coverage:

– loss of assets
– temporary business interruption (for equity)
– permanent loss of use

• Loss has to be a direct and immediate result of acts of war,

revolution, rebellion, insurrection, coup d’état, civil war, civil
commotion, riots
• Act of sabotage or terrorism can also be covered
• Acts must pursue a broad political or ideological objective

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 6

Expropriation

• Protects against losses arising from:

– nationalization and confiscation
– creeping expropriation (a series of acts that are expropriatory taken in sum,
e.g., gradual changes in tax regime)
– expropriation of funds (e.g., “account freeze”)
• Expropriation also if the Project Enterprise:
– is deprived of a substantial benefit
– constituting a fundamental right (e.g., under a project agreement)
– essential to its overall financial viability (normally this implies insolvency or
impending insolvency of the Project Enterprise)
• Non-discriminatory regulatory measures not covered, unless such
measures have a confiscatory effect

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 7

Breach of Contract

• Protects against loss arising from breach or repudiation of a project

agreement (e.g., in infrastructure and power projects)
• Project agreement must be entered between the host government
on the one hand and guarantee holder and/or project enterprise
(for equity investments only) on the other hand
• MIGA covers “denial of justice” risks:
– failure to pay on a valid arbitral award or judgment by a state court rendered
against host government or
– no recourse to judicial or arbitral forum by the investor or Project Enterprise

• May cover obligations of sub-sovereigns and state-owned

enterprises, subject to certain restrictions

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 8

Eligible Investments

• Cross-border investments from any MIGA member country to a

MIGA “developing member country”* in the form of:
– equity
– shareholder loans
– shareholder loan guaranties
– non-shareholder loans
• Other forms of investment, such as technical assistance and
management contracts, asset securitizations, capital market bond
issues, leasing, services, and franchising and licensing agreements,
may also be eligible for coverage

* The list of developing member countries is available on [Link].

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 9

 General Terms

• MIGA can cover up to 90 percent of equity and 95 percent

of debt
• Can cover both equity and debt in same project
• Tenors up to 15 years (occasionally up to 20 to match the
term of contract – for example, a PPA)
• MIGA cannot terminate the contract unless the investor
defaults on its contractual obligations to MIGA
• Client may reduce or cancel coverage without penalty on
any contract anniversary date starting with the first or third
anniversary
• Exclusion list (investments in spirits, tobacco, nuclear
power, etc)

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 10

 1. MIGA in the World Bank Group
2. Product Line
3. Underwriting Procedures
4. Pricing
5. Dispute Resolution
6. MIGA’s Performance
7. Project Structures
8. Annex: Summary of PRI covers for Equity and
Debt

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 11

 Underwriting Process
Investor
Preliminary Application 
Definitive Application (fees apply) 
Initial Screening Meeting 
Underwriting (2-4 months)
• Analysis of development impact
Environmental and social review Public
• Host
•
•
Integrity checks
Economic, financial viability assessment Country
Disclosure 
• Pricing and reinsurance Approval

Second Internal Review Meeting


Board Approval 
Contract Preparation & Signing  
Monitoring/Evaluation  
MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 12
Definitive Application

• Underwriter provides detailed application to client

• Fees apply:
– Definitive Application fees: $5,000 for projects below $25m; $10,000 for projects above $25m
– Processing fees as needed
• Environmental and Social due diligence
• Legal opinions, etc

• Typical supporting documentation required includes:

– Feasibility study or a business plan supporting the economic viability and financial soundness of
the project
– Financial forecast/ model
– All loan documentation, including shareholder and non-shareholder loans (drafts acceptable
during underwriting) and all loan-related documents
– All loan guaranties (including back-stop guarantees from parent companies)
– Financial statements and incorporation documents/by-laws from the investor and the project
enterprise in the host country
– Environmental permits/environmental impact assessment if applicable
– Land purchase/lease agreements
– All other applicable project licenses/ permits/ agreements/contracts

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 13

Environmental and Social Due Diligence and Disclosure

• MIGA assigns category based on risk (A,B,C, and FI for financial

intermediary)
• MIGA’s Performance Standards mirror IFC’s (based on Equator Principles)
• MIGA undertakes site visit if needed, identifies corrective actions
• Disclosure of proposed guarantees on MIGA’s website prior to Board
Approval
– Summary of Proposed Guarantee (SPG)
– Environmental and Social Review Summary and SPG for Category A and B
projects. Includes supporting documentation such as Environmental Impact
Assessment
– Category A = 60 days prior to Board (possibly 120)
– All other categories = 30 days
• Project Brief issued on signing – remains permanently on MIGA’s website

For more information, visit [Link]/sustainability

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 14

 1. MIGA in the World Bank Group
2. Product Line
3. Underwriting Procedures
4. Pricing
5. Dispute Resolution
6. MIGA’s Performance
7. Project Structures
8. Annex: Summary of PRI covers for Equity and
Debt

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 15

MIGA’s Pricing Approach

• Premium rate depends on country risk, number of covers, product mix, etc

• Component for administrative expense recovery depends on cost allocation

rules

• Premium rate may be adjusted to reflect situations of:

– For Equity coverage, MIGA receiving pledge of encumbered shares (EX) or arbitral award
(BOC)
– Portfolio pricing, deductibles and caps to MIGA’s covered amount

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 16

 1. MIGA in the World Bank Group
2. Product Line
3. Underwriting Procedures
4. Pricing
5. Dispute Resolution
6. MIGA’s Performance
7. Project Structures
8. Annex: Summary of PRI covers for Equity and
Debt

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 17

MIGA’s Value Added

• Management of risks at pre-claim level (110+ pre-

Strong pre-claim claims among over 800 projects. Two claims paid for Implications
management expropriation, six for war and civil disturbance) For Banks
• Leveraging the World Bank network

• Highly rated multilateral by Basel Committee 1. Reduce risk

Highly rated weights on
• Reduce risk weighting and capital provisioning
assets and
provide capital
• Strong capital base relief
Financially stable
• Mobilize reinsurance capacity
2. Optimize
country capital
Strong risk • Operates in challenging markets allocation
appetite • Longer tenors (up to 20 years)
3. Improve
Environmental credit rating
and social risk • Best practices in environmental and social standards
mitigation

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 18

Dispute Resolution and Claims

• MIGA has supported more than 800 projects, with more than 110 cases
treated as possible claims, but in which no claim has been paid
• If an issue between the investor and the government arises, MIGA will
seek to engage both and facilitate a resolution
– Travel to host country
– Engagement of World Bank Country officials
• MIGA has successfully facilitated the settlement of disputes in all currency
transfer/inconvertibility and breach of contract issues and since inception
has paid claims in eight cases, six of which were war and civil disturbance
related
• All other cases have been resolved (before or after the claim was filed) or
the claim was withdrawn

Deterrence effect ensures that only a small number of projects that MIGA supports encounter serious problems

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 19

 1. MIGA in the World Bank Group
2. Product Line
3. Underwriting Procedures
4. Pricing
5. Dispute Resolution
6. MIGA’s Performance
7. Project Structures
8. Annex: Summary of PRI covers for Equity and
Debt

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 20

 4.3
MIGA’s New Guarantee Issuance
(US$ billion in fiscal year)

3.2

2.8 2.8
2.7

2.1

1.5

2010 2011 2012 2013 2014 2015 2016

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 21

 MIGA’s Gross Exposure
(US$ billion in fiscal year)
14.2

12.4 12.5

10.8
10.3
9.1

7.7  Supported more than 800

7.3
6.5 projects in 110 countries
5.3

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 22

 1. MIGA in the World Bank Group
2. Product Line
3. Underwriting Procedures
4. Pricing
5. Dispute Resolution
6. MIGA’s Performance
7. Project Structures
8. Annex: Summary of PRI covers for Equity and
Debt

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 23

 Political Risk Insurance – Breach of Contract Cover
Azito Energie S.A., Côte d’Ivoire

Proparco BIO DEG

FMO BOAD BICICI

 Project: Conversion of the
Globeleq, IPS Direct existing thermal power
Agreement
Loans plant from simple-cycle to
Shareholder combined-cycle
Loan

 20-year power purchase

Compagnie Ivoirienne
de l’Electricité
agreement with CIE
Hyundai Engineering &
Construction Co. (Electricity Off-taker)
(EPC Contractor) Azito Energie S.A.  MIGA cover
Irrevocable
Instruction to • Amount: $116.1
Azito O&M-affiliated to Off-take and Pay
Globeleq • Tenor: 20 years
(Operator) • Issued: December 2012
Government of
Côte d’Ivoire
Alstom Power Systems SA
(Major Maintenance) Concession
Agreement Gas Sales Agreement

Obligor Afren, CNR, Foxtrot, Rialto

Guarantee holder (Gas Producers)
Project enterprise

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 24

 Political Risk Insurance – Expropriation, Transfer and Convertibility,
War and Civil Disturbance, Breach of Contract Cover
Autopistas del Atlantico S.A. en C.V., Honduras

Govt. of Honduras  Project: Rehabilitation of 220km of

through roads and reconstruction of bridges.
COALIANZA Direct
Agreement
 30-year concession agreement with
Concession
Agreement a minimum revenue guarantee from
Grodco, Colombia JPMorgan, USA the State.
Equity Debt
Grodco, Costa Rica ADASA CIFI, Panama
 Financing: 15yr USD 145M of debt.

Prodecon, Colombia Ficohsa, Honduras  MIGA cover

• Against the risks of TR, Expro,
EPC O&M contract WCD, BoC.
• Debt: 15yr, USD 115M cover to
JPMorgan and CIFI.
Grodco Prodecon
• Equity: 20yr, USD 60M cover to
Grodco.
• Both issued 2015.

Guarantee holder
Project enterprise
Obligor

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 25

 Political Risk Insurance – Expropriation, Transfer and Convertibility, War and Civil
Disturbance, Breach of Contract Cover
Rajamandala Hydropower Project, Indonesia

Kansai PT PLN
(Japan) (Indonesia)

 Project: Development and

100% 100% operation of a 47 megawatt
IP run-of-the-river hydropower
(Indonesia) plant near Bandung on Java
Island on a build-operate-
transfer basis
100%
JBIC Mizuho  30-year power purchase
KPN PT Putra agreement with PT
(Netherland) Indotenaga Perusahaan Listrik Negara
(PLN), a state-owned
49% 51% enterprise
 MIGA cover
REP • Amount $200m
Equity Debt • Tenor: 19 years
Obligor O&M Agreement • Issued: August 2014
Guarantee holder
Project enterprise
PPA O&M Advisory

HEC PT PLN IP Kansai

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 26

Political Risk Insurance – Capital Optimization, Financial Institutions and Capital Markets
Société Générale S.A. in Serbia

Risk Weighted Assets for

Société Générale CET1 Ratio
Mandatory Reserves held by  Project: Reduction of risk
(consolidated level) National Bank of Serbia
weighting on SocGen’s
consolidated balance sheet of
mandatory reserves maintained
by the subsidiary with the
National Bank of Serbia

 Reduction of risk weighted assets

Mandatory reduces deleveraging pressures
Reserves and creates room to support
Equity Société Générale Banka National Bank additional lending by subsidiaries
Srbija a.d. Beograd of Serbia

 MIGA Equity Cover

• Expropriation of funds
• Amount: €150 million
• Tenor: 10 years
• Issued: December 2013

Guarantee holder
Project enterprise
Obligor

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 27

 Political Risk Insurance – Expropriation, Transfer and Convertibility, Breach of Contract
Cover
Adana Integrated Health Campus, Turkey

 Project: design, construction,

Meridiam Rönesans Sila Sam
financing, and maintenance
of a new integrated health
40% 40% 10% 10% campus in the southern
Turkish city Adana structured
Equity
as a public-private
DFI Lenders
SHL partnership (PPP)
Implementation
EBRD, DEG/Proparco
Ministry of Health Agreement  Equity covered: $157.5M
Turkey ADN PPP Sağlik
Availability Yatirim A.S. • Tenor: 20 years
Payments
Commercial Lenders • Issued: December 2014

EPC Contract Service Agreements

Guarantee Holder EPC Contractor P1 & P2 Service Provider

P3 Service Provider
Project Enterprise RMI Ronesans Medikal Facilities Management Co
Ronesans Sub.
Taahhut Insaat A.S (JV of Ronesans, Sila, Sam)

Designers,
Consultants,
Subcontractors

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 28

 Political Risk Insurance – Expropriation, Transfer Restriction, War and Civil
Disturbance Cover
Elif Global Packaging S.A.E, Egypt

Elif Plastic Elif Global

(Turkey) (Turkey)  Project: New packaging
plant in 6th of October
1% equity 99% equity City’s Industrial Zone with
Elif Loan
initial production capacity
Guarantee*
of 15,000 tons of plastic
packaging per year
Landesbank Baden-
€8.3 M loan
Wurttemberg (LBBW)  MIGA cover
Elif (Egypt)
• Amount: $26.4m
$15.5 M A loan
• Tenor: 15 years (equity);
10 years (loan
guarantee)
• Issued: June 2014
*Elif Plastik will guarantee the LBBW loan
Elif Plastik and Elif Global have jointly guaranteed the IFC loan

Guarantee holder
Project enterprise

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 29

 Political Risk Insurance – Expropriation, Transfer and Convertibility, War and Civil
Disturbance, Breach of Contract Cover
Cerro de Hula Wind Power Project, Honduras

Globeleq Holding
Mesoamerica Power Ltd.
Americas Renewable Ltd.
(BVI)  Project: Project: Support Cerro
(Guernsey)
70% 30% de Hula wind project including
the 24 MW expansion of the
existing 102 MW, 20 kilometers
Globeleq Mesoamerica
Equity south of Tegucigalpa
Energy S.A.
(Panama)  Avoid 280,000 tons carbon
emissions per year
EPC
Equity 100%  Long term Operation
EPC Contractor Agreement and State
Contract Energía Eólica de DFI Financing
Gamesa Wind (USA) Debt Guarantee covering the PPA
Honduras S.A. US EximBank
Iberdrola (Mexico)
Central American Bank for with ENEE, the national utility
Economic Integration
O&M
 Equity covered: $82.4M
O&M
Gamesa Wind (USA)
Contract Power • Tenor: 20 years
Iberdrola (Mexico) Purchase • Issued: December 2013
Agreements
Empresa Nacional de
Energía Eléctrica
Guarantee holder
Project enterprise
Obligor

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 30

 Master Contract for Private Equity Investments – Expropriation, Transfer Restriction,
War and Civil Disturbance, Breach of Contract Cover
Chayton Africa, Zambia

Norfund Zeder/PSG Chayton

(Norway) (South Africa) Management
21.8% 73.4% 4.8%
 Project: Master contract for
Equity investments in farming
Chayton Africa
 3-year master contract
leading to 3 specific
investments projects
Equity Investment (wheat, maize, soy, and
(100%) Promotion and
Protection
barley)
Government of
Agreement
Commercial Chobe Agrivision Zambia and
Lenders Company Ltd. Zambia Development  MIGA cover
Agency
• Amount: $50m
• Tenor: 15 years for
specific projects
Project #1 Project #2 Project #3 • Issued: May 2010

Guarantee holder
Project enterprise
Obligor

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 31

 1. MIGA in the World Bank Group
2. Product Line
3. Underwriting Procedures
4. Pricing
5. Dispute Resolution
6. MIGA’s Performance
7. Project Structures
8. Annex: Summary of PRI covers for Equity and
Debt

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 32

Guarantee Policies – Summary of Standard PRI Covers for Equity

Covered Risks Compensation Mechanics Claim Submission Process

Transfer Restriction Inconvertibility: Inability to Inconvertibility: Compensation is the Standard Waiting Period* of 60 days.
(TR) and legally convert local currency Percentage of Cover of the Guarantee
Inconvertibility into hard currency and/or; Currency equivalent of the Local Claim can be submitted at any time from
Currency which could not be converted the Date of Loss to the date 180 days after
TR: Inability to transfer hard in respect of the Guaranteed the end of the applicable Waiting Period.
currency outside the host Investment, calculated on the basis of
country, in each case, where the Reference Rate of Exchange on the Claims determination period of 30 days
such a situation results from a Date of Loss; following later of:
government action or failure to i) end of Waiting Period; and
act. TR: Compensation is the Percentage of ii) date that MIGA deems claim to be
Cover of the amount of Guarantee complete.
Currency that could not be transferred
in respect of the Guaranteed Payment period of 30 days.
Investment as of the Date of Loss.

Date of Loss defined as date of the

action or inaction constituting the
Covered Risk for which compensation is
claimed.

Devaluation of currency not covered.

* Waiting Period is defined as the period of time from the Date of Loss until MIGA may deem a claim to be complete.

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

 Guarantee Policies – Summary of Standard PRI Covers for Equity
Covered Risks Compensation Mechanics Claim Submission Process
Expropriation Any legislative action or any Compensation is the Percentage of Cover of: Standard Waiting Period of 180
executive action attributable days, except for 60 days for
to the Host Government In the case of Expropriation of Investment, the Guarantee Expropriation of funds.
which may: Holder’s Share of:
Claim can be submitted at any
(i) Deprive or prevent from (i) the Net Book Value of the Project Enterprise (or the portion time from the Date of Loss to
exercising ownership rights in thereof that has been expropriated); or the date 180 days after the end
the Guaranteed Investment of the applicable Waiting
(ii) if the Guaranteed Investment constitutes only tangible assets,
(Expropriation of Period.
the Book Value of such tangible assets (or the portion thereof that
Investment); or
has been expropriated), in both cases calculated as of the day
Claims determination period of
immediately preceding the Date of Loss; and
(ii) Deprive of the use and 30 days following later of:
control of any funds i) end of Waiting Period; and
In the case of Expropriation of Funds:
constituting dividends, ii) date that MIGA deems claim
profits, or other monetary complete.
(i) the Guarantee Currency equivalent of the Local Currency
benefits derived from the
amount distributable in respect of the Guaranteed Investment,
Guaranteed Investment Payment period of 30 days.
calculated on the basis of the Reference Rate of Exchange
(Expropriation of Funds)
prevailing on the Date of Loss; or
(ii) the Guarantee Currency amount distributable in respect of the
Guaranteed Investment of which the Guarantee Holder or the
Project Enterprise was deprived as of the Date of Loss.

Date of Loss defined as date of the action or inaction constituting

the Covered Risk for which compensation is claimed.

Non-discriminatory measures of general application (regulating

economic activity, ensuring public safety, raising revenues,
protecting environment) are not covered.

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

Guarantee Policies – Summary of Standard PRI Covers for Equity

Covered Risks Compensation Mechanics Claim Submission Process

Breach of Inability to enforce or obtain Arbitral Award Default: Compensation is the Percentage of Standard Waiting Period of 180
Contract an arbitral award recognizing Cover of the Guarantee Holder’s Share of the Award, less the days.
breach of an obligation by amount of any Provisional Payments that have been made,
the host government. payable in Guarantee Currency calculated as of the Date of Claim can be submitted at any
Loss. time from the Date of Loss to the
Arbitral Award Default: date 180 days after the end of the
Guarantee Holder has Date of Loss defined as date of the Award. applicable Waiting Period.
obtained an award but has
not been able to enforce the Denial of Recourse: Compensation shall be payable prior to the Claims determination period of 30
award. issuance of an Award and shall be the lesser of: days following later of:
i) end of Waiting Period; and
(i) the Percentage of Cover of the amount determined by
ii) date that MIGA deems claim
MIGA to be due from the Host Government to the Guarantee
Denial of Recourse: complete.
Holder, or the Percentage of Cover of the Guarantee Holder’s
Guarantee Holder is unable
Share of the amount determined by MIGA to be due from the
to obtain an award during Payment period of 30 days.
Host Government to the Project Enterprise, as applicable,
the Waiting Period due to
payable in Guarantee Currency calculated as of the date of such
government actions / Claim under Denial of Recourse
determination; and
interference. dependent on advisory report
(ii) the Current Amount of Guarantee. from Independent Expert.

Date of Loss defined as date of the commencement of the

action constituting the Covered Risk for which compensation is
claimed.

Provisional payments of up to 50% of the claimed amount

under Arbitral Award Default possible.

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

Guarantee Policies – Summary of Standard PRI Covers for Equity

Covered Risks Compensation Mechanics Claim Submission Process

War and Loss of Assets: Destruction Compensation is the Percentage of Cover of the Standard Waiting Period for Loss
Civil Disturbance or disappearance of, or Guarantee Holder’s Share of: of Use is 180 days. No Waiting
physical damage to, Period for Loss of Assets.
tangible assets in the Host In the case of Loss of Assets:
Country utilized for the Claim can be submitted at any
(i) the lesser of the replacement cost of such tangible
Investment Project. time from the Date of Loss to
assets with assets of like kind and quality and the
the date 180 days after the end
reasonable cost of repair of such tangible assets; or
of the applicable Waiting Period.
Loss of Use: Total inability (ii) if the relevant assets are neither being replaced nor
of the Project Enterprise to repaired, the Book Value of the affected tangible Claims determination period of
conduct operations for a assets, determined as of the day immediately 30 days following later of:
continuous period of 180 preceding the Date of Loss. i) end of Waiting Period; and
days. ii) date that MIGA deems claim
Date of Loss defined as date that the destruction, complete.
disappearance, or damage occurs.
Payment period of 30 days.
In the case of Loss of Use, the Net Book Value of the
Project Enterprise calculated as of the day
immediately preceding the Date of Loss.

Date of Loss defined as date as of which the Project

Enterprise is unable to conduct operations essential to
its overall financial viability.

Losses due to labor, student disputes are not covered.

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

Guarantee Policies – Summary of Standard PRI Covers for Debt

Covered Risks Compensation Mechanics Claim Submission Process

Transfer Inconvertibility: Inability to Inconvertibility: Compensation is Percentage of Standard Waiting Period of 60
Restriction (TR) legally convert local currency Cover of Guarantee Currency equivalent of Local days.
and into hard currency and/or; Currency constituting the Scheduled Payment
Inconvertibility which could not be converted. Claim can be submitted at any
TR: Inability to transfer hard time from the Date of Loss to
currency outside the host TR: Compensation is the Percentage of Cover the date 180 days after the
country, where such a Scheduled Payment that could not be transferred end of the applicable Waiting
situation results from a as of the Date of Loss. Period.
government action or failure
to act. Date of Loss defined as Scheduled Payment Due Claims determination period
Date of 30 days following later of: i)
end of Waiting Period and ii)
Devaluation of currency not covered date that MIGA deems claim
complete.

Payment period of 30 days.

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

Guarantee Policies – Summary of Standard PRI Covers for Debt

Covered Risks Compensation Mechanics Claim Submission Process

Expropriation Any legislative action or any Compensation is the Percentage of Cover of the Standard Waiting Period of
executive action attributable Scheduled Payment in default as of the Date of 180 days, except for 60 days
to the Host Government which Loss. for expropriation of funds.
may: i) reduce or eliminate
ownership of, or control over, Compensation for expropriation of collateral Claim can be submitted at any
the investment project rights not to exceed realizable value of collateral time from the Date of Loss to
(expropriation of project security or commercial guaranties. the date 180 days after the
company); ii) deprives rights end of the applicable Waiting
as lenders of Scheduled Date of Loss defined as Scheduled Payment Due Period.
Payment (expropriation of Date (for expropriation of collateral, Date of Loss
lenders rights); iii) deprives is day before deprivation takes place). Claims determination period
control of funds constituting of 30 days following later of: i)
Scheduled Payment Non-discriminatory measures of general end of Waiting Period and ii)
(expropriation of funds); and application (regulating economic activity, date that MIGA deems claim
iv) deprives rights against ensuring public safety, raising revenues, complete.
collateral (expropriation of protecting environment) not covered
collateral rights) Payment period of 30 days.

* Waiting Period is defined as the period of time from the Date of Loss until MIGA may deem a claim to be complete.

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

Guarantee Policies – Summary of Standard PRI Covers for Debt

Covered Risks Compensation Mechanics Claim Submission Process

Breach of Inability to enforce or Arbitral Award Default: Compensation is the Standard Waiting Period of 60 days.
Contract obtain an arbitral award Percentage of Cover in Guarantee Currency,
recognizing breach of an calculated as of the Date of Loss, of the lesser of: (i) Claim can be submitted at any time from
obligation by the host the amount of the Award owed to the Guarantee the Date of Loss to the date 180 days after
government. Holder, and (ii) the Scheduled Payments in default as the end of the applicable Waiting Period.
of the Date of Loss;
Arbitral Award Default: Less: Claims determination period of 30 days
Guarantee Holder has (b) the amount of any Provisional Payments that following later of: i) end of Waiting Period
obtained an award but has have been made. and ii) date that MIGA deems claim
not received payment complete.
under the award. Date of loss defined date of the Award.
Payment period of 30 days.
Denial of Recourse: Denial of Recourse: Compensation is the lesser of:
Guarantee Holder unable (i) the Percentage of Cover of the amount due from Claim under Denial of Recourse dependent
to obtain an award during the Host Government to the Guarantee Holder, on advisory report from Independent
the Waiting Period due to calculated as of the date of such determination; (ii) Expert.
actions by government the Percentage of Cover of the Scheduled Payments
in default as of the Date of Loss; and (iii) the Current
Amount of Guarantee.

Date of loss defined as the date of the

commencement of the action constituting the
covered risk.

Provisional payments under Arbitral Award Default

possible.

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

Guarantee Policies – Summary of Standard PRI Covers for Debt

Covered Risks Compensation Mechanics Claim Submission Process

War and Loss of Assets: Compensation is the Percentage of Standard Waiting Period of 60 days.
Civil Destruction or Cover of the amount of the Scheduled
Disturbance disappearance of, or Payment in default as of the Date of Claim can be submitted at any time
physical damage to, Loss. from the Date of Loss to the date 180
tangible assets in the Host days after the end of the applicable
Country utilized for the Date of Loss defined as the Scheduled Waiting Period.
Investment Project. Payment Due Date
Claims determination period of 30 days
Loss of Use: Total inability Loss due to labor, student disputes following later of: i) end of Waiting
of the Project Enterprise not covered. Period and ii) date that MIGA deems
to conduct operations for claim complete.
a continuous period of
180 days. Payment period of 30 days.

MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP

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