2019 ANNUAL REPORT About MIGA Private investors provide not just financing, but also solutions, for projects in developing countries. Yet, non-commercial risks can make them hesitant to invest in developing countries. A member of the World Bank Group, MIGA is committed to strong development impact and promoting projects that are economically, environmentally, and socially sustainable. MIGA helps investors mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war and civil disturbance, and also offers credit enhancement. Over the last six years, MIGA has doubled its portfolio, resulting in approximately 50 million people gaining access to power, and $3.9 billion in annual taxes and fees paid to host governments through MIGA-supported projects. World Bank Group $5.8 billion Europe & Central Asia Global Commitments $8.2 billion Middle East $10.7 billion & North Africa Latin America & the Caribbean $5.8 $8.2 $11.7 $7.5 $7.5 billion East Asia $10.7 $18.4 & Pacific The World Bank Group maintained its support for developing countries over the past year as the organization focused on delivering results more quickly, increasing its relevance for clients and partners, and bringing global solutions to local challenges. $62.3 billion $11.7 billion South Asia in loans, grants, equity investments, guarantees to partner countries $18.4 billion and private businesses.* Sub-Saharan Africa *Total includes multiregional and global projects. Regional breakdowns reflect World Bank country classifications. 2 World Bank Group Highlights 3 Annual Report 2019 A Message from the President Our development mission is clear: to advance shared Governors in October 2018, will provide additional lending help countries address climate challenges and put adapta- MIGA is the largest multilateral political risk insurance prosperity and end extreme poverty. The challenges capacity along with institutional and financial reforms tion finance on a par with mitigation. provider, with a mandate of creating development impact remain urgent. For many countries, poverty reduction has designed to ensure IBRD’s long-term financial sustainabil- by helping attract foreign direct investment to developing slowed or even reversed, while investment and growth ity. IBRD has further strengthened its financial manage- Our goal is for countries to achieve economic success countries. Nearly 30 percent of MIGA’s guarantee program will not be enough to raise living standards. Poorer coun- ment by introducing a Financial Sustainability Framework, and broad improvements in living conditions. As they over the fiscal year supported projects in IDA countries tries face many challenges in achieving basic development including a sustainable annual lending limit. A strong advance, our relationship with them should evolve so that and fragile settings, and almost two-thirds contributed to gains, including severe deficits in clean water, electricity, IDA19 replenishment in December 2019 will extend our a growing share of our IBRD lending is available to coun- climate change adaptation or mitigation. health, education, jobs and private sector competitiveness; ability to support good development outcomes and better tries in lower-income thresholds. For example, China barriers to the full inclusion of women in economies and lives for the poorest people around the world. achieved major increases in GDP, median income, and Across IBRD/IDA, IFC, and MIGA, we are working to societies, alongside policies that too often favor elites prosperity, so our interactions are becoming more tech- increase our commitments to lower-income countries rather than creating work opportunities and support for We are sharpening our focus on selective and impactful nical as lending declines. China’s policies are changing as they improve their development outlook and to shift those most in need; the urgency of environmental and country programs to improve growth and development rapidly to improve global public goods, address environ- resources toward countries suffering from fragility, con- climate challenges; and the surge in debt that is not bring- outcomes. IBRD commitments exceeded $23 billion this mental and climate change problems, and reduce plastic flict, and violence. We will be improving our effectiveness ing true benefits. year. Commitments by IDA, which provides grants and and micro-plastic in its rivers. China has evolved from a and budget discipline throughout the year to make more low-interest loans to the world’s 75 poorest countries, large-scale borrower to an important voice in the develop- resources available to meet client needs and challenges. Economic growth has been the key engine of poverty were $22 billion, of which nearly $8 billion were grants. ment dialogue and a key contributor to IDA. reduction around the world. However, in many countries, Together, these Bank programs helped more countries I am deeply optimistic that courageous, enlightened especially resource-based economies, the benefits of come closer to achieving their development priorities. We are working in fragile areas, such as the Sahel and leadership and strong policies can work to improve living growth weren’t allowed to spread—growth helped increase the Horn of Africa, to help countries build stronger foun- conditions for those most in need. I saw first-hand the average incomes, yet it did not increase median incomes Demand for human capital investments continued to dations so that young people are more able to stay rather scope and urgency of the development challenges during or lift the poorest 40 percent of the population. With global grow over the fiscal year—reflecting the significant role than seeking to migrate. IDA commitments to countries my trip to Sub-Saharan Africa in April. I am hopeful there growth slowing, median income growth is sluggish in this financing can play in promoting long-term inclusive affected by fragility, conflict, and violence reached $8 is a path forward, having seen Prime Minister Abiy and his much of the world and declining in many poorer countries. growth and alleviating poverty. Over 60 percent of Bank billion in fiscal 2019. team launching ambitious reforms in Ethiopia, the poten- In middle-income countries slower growth erodes the operations helped address gender gaps and encouraged tial of the world’s largest solar energy plant in Egypt, the full incorporation of women in economies and societies. Many countries will need a much bolder agenda for resilience of the people of Mozambique after the devasta- living standards of the middle class, with many joining the Several once-closed societies are allowing welcome boosting private sector growth to generate more and tion of twin cyclones, and the inspiration for the people of ranks of the poor. This adds to the challenges facing the improvements in the legal, economic, and social condi- better jobs. This entails major changes in the business Madagascar after its first peaceful leadership transition. 2030 Sustainable Development Goals, and the key poverty tions for girls and women. Much more progress is abso- climate so that the private sector can compete with reduction goal is at risk of not being met. lutely necessary. the state on a level playing field—critical for generating The people in developing countries are facing immense World Bank Group commitments to help countries achieve jobs, profit, and innovation. challenges. The World Bank Group and all our personnel better development outcomes were nearly $60 billion in The need for the rule of law and greater transparency is and resources are committed to working with our part- an increasingly accepted development priority. In develop- The World Bank Group is increasing financing for eco- ners around the world toward policies and solutions that the fiscal year that ended on June 30, 2019. With weak ment finance, transparency in sovereign debt and debt- nomic and institutional reforms to enhance private invest- improve their lives. investment prospects in many developing countries and like contracts is vital to improve the quality and profitable ment and job creation in developing countries. As the recession risk in Europe, it has become even more urgent allocation of capital and new investment. largest global development institution focused on the for the Bank Group—IBRD, IDA, IFC, and MIGA—to step up private sector, IFC creates markets and opportunities our effectiveness and impact. For fiscal 2019, 31 percent of IBRD/IDA commitments for sustainable private investment where they are needed Working together, these institutions have the tools to help contained climate co-benefits, exceeding the Bank’s most. IFC is shifting its focus to working upstream to David Malpass address the challenges emerging around the world. target of 28 percent by 2020. In December 2018, the Bank create a pipeline of bankable projects that will increase President of the World Bank Group and The IBRD-IFC capital package, approved by the Board of announced a $200 billion five-year mobilization target to private investment in the world’s poorest countries. Chairman of the Board of Executive Directors 4 World Bank Group FY19 5 Annual Report 2019 A Message from the MIGA World Bank Group Financing for Board of Directors Partner Countries World Bank Group Commitments, Disbursements, and Gross Issuance By fiscal year, millions of dollars 2015 2016 2017 2018 2019 WORLD BANK GROUP Commitmentsa 59,776 64,185 61,783 66,868 62,341 Disbursementsb 44,582 49,039 43,853 45,724 49,395 IBRD Commitments 23,528 29,729 22,611 23,002 23,191 Disbursements 19,012 22,532 17,861 17,389 20,182 IDA Commitments 18,966 16,171 19,513c 24,010d 21,932e Standing (Left to Right): Seated (Left to Right): Erik Bethel, United States (Bank/IFC Alternate Director and MIGA Director); Juergen Karl Zattler, Germany ; Shahid Ashraf Tarar, Pakistan; Aparna Disbursements 12,905 13,191 12,718 c 14,383 17,549 Masanori Yoshida, Japan; Werner Gruber, Switzerland ; Adrián Fernández, Subramani, India; Hesham Alogeel, Saudi Arabia; Anne Kabagambe, Uruguay ; Nathalie Francken, Belgium (Bank/IFC Alternate Director and MIGA Uganda; Merza Hussain Hasan, Kuwait (Dean); Kulaya Tantitemit, Thailand ; Director); Kunil Hwang, Korea; Jean-Claude Tchatchouang, Cameroon; Patrizio Pagano, Italy ; Christine Hogan, Canada; Hervé de Villeroché, France IFC Richard Hugh Montgomery, United Kingdom; Jorge Alejandro Chávez Presa, (Co-Dean); Fabio Kanczuk, Brazil Mexico; Koen Davidse, The Netherlands; Susan Ulbaek, Denmark ; Guenther Commitmentsf 10,539 11,117 11,854 11,629 8,920 Schoenleitner, Austria (Bank/IFC Director and MIGA Alternate Director); Yingming Yang, China; Roman Marshavin, Russian Federation; Armando Disbursements 9,264 9,953 10,355 11,149 9,074 Manuel, Angola (Alternate) MIGA Fiscal 2019 saw a change in leadership and notable ing on our twin goals and the Sustainable Development Gross Issuance 2,828 4,258 4,842 5,251 5,548 achievements for the World Bank Group. The Board unani- Goals by 2030. mously selected David Malpass as President for a five-year We continued engaging with management on its Recipient-Executed term, which began on April 9, 2019. We actively engaged underwriting and guarantee facilities, the new Impact Trust Fund with management, and with the President upon his joining, on carrying out key deliverables in the Forward Look vision Measurement & Project Assessment Comparison Commitments 3,914 2,910 2,962 2,976 2,749 for the Bank Group. Tool, implementation of the strategy and business outlook, exposure limits, and portfolio approach. Disbursements 3,401 3,363 2,919 2,803 2,590 We discussed the Bank Group’s leadership role on issues such as debt sustainability, disruptive and transformative We noted MIGA’s mission of creating development impact technology, human capital development, the future of through increased foreign direct investment, particularly a. Includes IBRD, IDA, IFC, Recipient-Executed Trust Fund (RETF) d. Figure does not include $185 million in approved IDA18 IFC-MIGA Private Sector work, regional integration and trade promotion, and gender in IDA countries and Fragile and Conflict—Affected Situa- commitments, and MIGA gross issuance. RETF commitments include Window instruments, of which IDA has exposure of $36 million in guarantees and tions, and in taking on climate change. Within the frame- all recipient-executed grants, and therefore total World Bank Group $9 million in derivatives. equality. We stressed the importance of collaboration commitments differ from the amount reported in the Corporate Scorecard, in mobilizing finance for development across the Bank work of MIGA’s FY18—20 strategy, we welcomed the focus which includes only a subset of trust-funded activities. e. Figure does not include $393 million in approved IDA18 IFC-MIGA Private Sector on these challenging environments, as well as deeper Window instruments, of which IDA has exposure of $106 million in guarantees, Group. We also encouraged advancing partnerships with b. Includes IBRD, IDA, IFC, and RETF disbursements. $25 million in derivatives, and $1 million through funding of IFC-PSW related the private sector, financial institutions, governments, and collaboration within the World Bank Group and elsewhere equity investment. in order to deliver strong developmental results. c. Figures include the commitment and disbursement of a $50 million grant others on reforms to improve productivity and invest in for the Pandemic Emergency Financing Facility. f. Long-term commitments for IFC’s own account. Does not include short-term human capital and infrastructure, which are key to deliver- finance or funds mobilized from other investors. 6 World Bank Group FY19 7 Annual Report 2019 The The World Bank Group is one of the world’s largest sources of funding and knowledge MIGA's Global Reach Institutions for developing countries. It consists of Projects supported by MIGA are expected to deliver five institutions with a common commitment of the World to reducing poverty, increasing shared high-impact results across sectors around the world.1 Bank Group prosperity, and promoting sustainable growth and development. IBRD IDA International Bank for International Reconstruction and Development Development Association Lends to governments of Provides financing on middle-income and creditworthy highly concessional terms low-income countries. to governments of the poorest countries. MIGA Member Countries Developing Countries (156) Industrialized Countries (25) Afghanistan Armenia Bangladesh Cameroon Egypt 3,000 290,000 9.7 million 1.2 million 1 million Farmers reached People provided People provided with People provided Tons of CO2 with new or improved new or improved with new or improved equivalent emissions ICSID IFC MIGA electricity services electricity services electricity services avoided per annum2 International Centre for Settlement International Finance Multilateral Investment of Investment Disputes Corporation Guarantee Agency Jordan Lebanon Namibia Pakistan Turkey Provides international facilities Provides loans, equity, and Provides political risk 7.4 million $24 million 34,000 $33.6 million 21.5 million for conciliation and arbitration advisory services to stimulate insurance and credit Airport passengers Locally procured People provided Local taxes and fees Patient of investment disputes. private sector investment in enhancement to investors carried per year goods per year with new or improved paid per annum consultations developing countries. and lenders to facilitate electricity services foreign direct investment in emerging economies. 1 Fiscal years 2014–2019. 2 Calculations of greenhouse gas (GHG) emissions avoided began in FY17. 8 World Bank Group FY19 9 Annual Report 2019 A Message from Expected Development Results FY14–FY19 Keiko Honda MIGA’s Contribution to the Sustainable Development Goals Executive Vice President and Chief Executive Officer 49.8 million $3.9 billion people with access in local taxes and fees per annum POWER: ACCESS TAX REVENUE Delivering development impact is at the heart of what IFC in Afghanistan, and with both the World Bank and IFC MIGA does. Guided by the World Bank Group mission to on power generation in Cameroon and Uganda. We also end extreme poverty and boost shared prosperity, we contributed to numerous World Bank Group Strategic are dedicated to ensuring that individuals across the world Country Diagnostics, Country Partnership Frameworks, benefit through the projects we support. and regional coordination efforts. We will do even more In FY19, we supported $9.3 billion in financing while in the coming year on upstream strategic initiatives and 7.4 million 21.5 million downstream projects. metric tons prevented1 per annum patient consultations extending $5.5 billion in new guarantees–double that from six years ago. In addition, we doubled our portfo- In October 2018—in alignment with the recommendation GREENHOUSE ACCESS TO lio in IDA (low-income) countries and fragile settings from the G-20 Eminent Persons Group on Global Financial GAS REDUCTION HEALTH CARE compared with six years ago. A third of our political risk Governance that multilateral development banks (MDBs) insurance gross exposure was in IDA countries or fragile systematically leverage MIGA as a global risk insurer in settings, enabled by a doubling of our outstanding guaran- development finance—we standardized the formats of our tees to $23.3 billion from six years ago. This was despite guarantee contracts (available on www.miga.org). We also a weak global pipeline of investable projects and declining boosted our partnerships with several MDBs by signing foreign direct investment (FDI) inflows to IDA countries memoranda of understanding (MOUs). and fragile settings. Looking ahead, we are well positioned to increase our Our climate portfolio also doubled over the same period, development impact by staying focused on our work in $2.1 billion $17.3 billion accounting for 62 percent of the projects we supported IDA-eligible countries and fragile settings, and on climate in locally procured goods per annum dollars in finance enabled for SMEs this year. Countries we supported through climate projects finance while also serving all clients and deepening our included Afghanistan, Cameroon, the Arab Republic of work with the World Bank and IFC. Following the success- GROWING SME ACCESS TO Egypt, Malawi, Namibia, South Africa, and Uganda. ful pilot of our new ex ante development impact system ECONOMIES FINANCE ("IMPACT") this year, we are also working toward a full The projects we supported over the past six years will launch in FY20. help provide access to power for some 50 million people, generate $3.9 billion in taxes and fees annually for host I am proud of MIGA’s achievements in FY19 and look governments, and avoid an estimated 7.4 million tons in ahead to another productive year for the Agency. I thank CO2 equivalent emissions. our Governors, Board, private investors, and partners for continuing to collaborate closely with us. In FY19, the projects we supported in fragile settings and IDA countries included an agribusiness processing facility 116.6 thousand in Sierra Leone, which will export produce across the world direct jobs created2 and lead to the creation of over 3,000 new jobs. In addition, a previously supported, first-of-its-kind green business JOBS center in Djibouti was certified in FY19 by the EDGE program. Note: Expected results as of contract issuance. SMEs are small Successful delivery on our commitments arose from the Keiko Honda and medium enterprises. strong partnerships we cultivated in FY19. We collabo- Executive Vice President and Chief Executive Officer 1 GHG emissions avoided are being accounted for from FY17 onward. rated closely on a joint raisins processing project with Multilateral Investment Guarantee Agency 2 Permament and temporary jobs. 10 MIGA CEO Message Sierra Leone Malawi Tropical Fruit Production Solar Power Generation MIGA issued $36 million in guarantees for the design, FY19 saw MIGA’s first engagement in Malawi, with the construction, and operation of a fruit processing facility Agency supporting the development, construction, and in the Southern Province of Sierra Leone that will cultivate, operation of a new 60-megawatt solar photovoltaic plant harvest, and process pineapples and other tropical fruit in Salima, a province in the country’s central region. for export throughout the world. The Agency is providing $58.6 million of equity contracts of guarantee were protection from expropriation and breach of contract signed with JCM Power International and InfraCo Africa for up to 10 years to Dole Asia Holdings, a subsidiary of Ltd. The plant will become one of the first independent ITOCHU Corporation, for its investments in Sierra power producers in Malawi and will add a new source of Tropical Limited. This “farm to fork” project is expected energy supply in the country, where electrification rates to help create approximately 13,000 direct and indirect are among the lowest in the world and 98 percent of total jobs, supporting the local economy and contributing to installed generation capacity is dependent on hydropower, economic diversification. In addition, the project will which is increasingly vulnerable to the impacts of climate provide technical and vocational training to staff along change. The project is an example of MIGA using the IDA MIGA is committed to strong Highlighted development impact through supporting with developing new community infrastructure such as a school and a health clinic. The project illustrates MIGA’s Private Sector Window innovatively as a first-loss layer to help draw private investors to new markets. Projects: projects that are economically, environmentally, and socially sustainable. support for transformational ventures in IDA countries. In addition to its own resources, MIGA used the IDA Private Sector Window to provide a first-loss layer in support A Closer Look Since its inception in 1988, MIGA has of the project. issued more than $55 billion in guarantees at MIGA’s across 114 developing countries. Sierra Tropical Ltd. is expected to help Salima Solar will add 140 GWhs of Development The Agency has also supported multiple programs at regional and global levels create some 13,000 jobs, supporting the local economy and contributing electricity annually in Malawi, where electrification rates are among the Results in FY19 in member countries. to economic diversification. lowest in the world. 12 Highlighted Projects 13 Annual Report 2019 Business and Operational Review MIGA aims to draw cross-border investment to developing During FY19, the Agency issued a record $5.5 billion in economies in support of the World Bank Group’s mission new guarantees in support of 37 projects, reflecting a 6 of ending extreme poverty and boosting shared prosperity. percent growth over the $5.3 billion issued in FY18 and In FY19, MIGA continued to facilitate FDI into developing almost double the guarantees issued in FY15 of $2.8 economies by providing its guarantee products to fit the billion. Of the projects supported in FY19, 81 percent unique needs of each project and sponsor. addressed at least one of the Agency’s strategic priority areas: IDA-eligible countries, fragile and conflict-affected situations (FCS), and climate change. Gross portfolio exposure 23.3 Cameroon Egypt has almost doubled since FY15 21.2 Clean Power Generation Landmark Wind Farm Currently, Cameroon’s installed generation capacity of MIGA signed an agreement to provide $122 million in 1,200 megawatts is insufficient to meet demand growing financial guarantees to Lekela for the development of the at 7 percent per annum, and peak demand is expected 252-megawatt West Bakr Wind farm in Egypt’s Red Sea to quadruple by 2035. To help the government prepare Governorate. This project aims to bolster the production 17.8 for this, MIGA issued €164.5 million in guarantee of clean energy, lower generation costs, and diversify the coverage to support the Nachtigal Hydropower Plant. country’s energy mix. West Bakr Wind is expected to With a capacity of 420 megawatts, Nachtigal will produce over 1,000 gigawatt-hours per year, at a tariff contribute nearly 30 percent of additional installed gener- well below the average cost of generation in Egypt. It ation capacity in Cameroon, along with substantial devel- will deliver power to more than 350,000 homes and avoid 14.2 opment and climate co-benefits. The plant will provide more than 550,000 tons of CO2 equivalent emissions electricity for over 450,000 customers and contribute annually. The wind farm is part of the government’s 12.5 to creating an estimated 27,000 direct and indirect jobs. build-own-operate framework and a key contributor to Nachtigal will also help avoid 41 million tons of CO2 supporting the country’s renewable energy targets of equivalent emissions over next 40 years. The Nachtigal 20 percent of electricity from renewable energy sources Hydropower Plant is an example of the World Bank Group by 2022. working in concert to help Cameroon achieve its clean energy goals. World Bank guarantees, MIGA guarantees, $ billion in fiscal year and IFC equity and debt financing played an instrumental role for the Nachtigal plant to be realized. The Nachtigal Hydropower Plant will West Bakr Wind will deliver power to provide electricity for over 450,000 more than 350,000 homes and avoid more customers and support an estimated than 550,000 tons of CO2 equivalent 27,000 jobs. emissions annually. FY15 FY16 FY17 FY18 FY19 14 Highlighted Projects 15 Annual Report 2019 MIGA’s Strategic Priority Areas IDA and FCS Climate Change In FY19 MIGA issued a total of $1.1 billion in guarantees Climate change continues to be a priority, as outlined in for IDA-eligible countries and FCS. By attracting private the MIGA 2020 strategy. In the past six years, MIGA has investment into these more challenging settings, MIGA doubled the size of its climate portfolio. In FY19, 62 per- was able to create additional development impact and cent of all projects supported climate mitigation and help countries come closer to realizing their development adaptation, and of these, 73 percent were in support of goals. Collectively these projects are expected to support renewables. MIGA’s support for renewables focused 8,000 direct jobs, provide new or improved electricity heavily on Sub-Saharan Africa: We issued $137.1 million to over 2 million people, and help avoid 1 million tons of in support of 12 solar power plants, including concentrated CO2 equivalent per year. solar, in Namibia and South Africa; and in Cameroon, MIGA guarantees supported the Nachtigal hydropower For example, $36 million in guarantees were issued to project, an example of the World Bank Group coming support the operations of a new food processing plant in together to deliver impact on the ground. Also noteworthy Sierra Leone, helping to diversify the economy and create in FY19 were climate-friendly projects in IDA countries domestic jobs. MIGA also extended $35.5 million in guar- and FCS, which include a raisin processing plant in antees to Butec Utility Services to improve and expand Afghanistan and the first solar independent power electricity distribution for 2 million people in Lebanon. producer in Malawi. These projects aim to crowd-in MIGA also continued to use the Conflict-Affected and climate finance and bring private investment to more Fragile Economies Facility (CAFEF) in FY19 to support a challenging markets. fiber optic cable network project in Myanmar. In addition, MIGA leveraged the IDA Private Sector Window to cover In FY19 MIGA also supported clients in the financial MIGA’s exposure in fragile and conflict-affected settings, sector by helping develop their procedures to track, iden- such as in Afghanistan, Malawi, Myanmar and Sierra Leone. tify, and report investments in climate projects. Leveraging a MIGA-backed loan, financial intermediaries have committed to investing $50 million toward climate finance. 17 Annual Report 2019 Reinsurance Leveraging MIGA’s Partnerships for Greater Development Impact Reinsurance plays a key role in helping MIGA use its capital How MIGA works with partners to deliver efficiently and in minimizing risk concentrations. At the same time, reinsurance contributes to MIGA’s revenue in the form of development outcomes ceding commissions (that is, a percentage of the premiums ceded to reinsurers is retained by MIGA). As of June 30, 2019, In FY19, MIGA further deepened its engagements with Building deeper partnerships with MDBs was also an $14.9 billion (64 percent) of the Agency’s gross outstanding partners—governments, the private sector, nongovern- important focus in FY19. In alignment with the G-20 exposure was reinsured under facultative and quota share mental organizations (NGOs), and across the World Bank Eminent Persons Group recommendation that MDBs treaty arrangements. Capital leveraged through reinsurance Group—to deliver the twin goals. leverage MIGA as a global risk insurer in development in FY19 rose by $10.1 billion since FY15. finance, the Agency revised and standardized the In FY19 MIGA leveraged its country and risk insurance formats of its guarantee contracts. MIGA also signed expertise in support of joint projects with the World Bank several MOUs, boosting its partnerships with other and IFC. Working in collaboration, all three institutions MDBs, including ICIEC, the investment and export worked to secure several projects with significant credit insurance arm of the Islamic Development Bank; development impact, such as a clean power generation the Asian Development Bank; and the European Bank project in Cameroon and the Rikweda raisin processing for Reconstruction and Development. project in Afghanistan. MIGA Operating Model ($, billions) Guarantees Environmental and $23.3 Host Countries Category 2 Integrated Services Social Sustainability and Integrity Reinsurance Investor Net exposure $14.9 Private investors and MIGA is committed to working with its clients to ensure the environmental and social sustainability and integrity MIGA regularly monitors projects for compliance with environmental and social requirements. Some 88 project Countries of projects it supports. MIGA’s environmental and social site visits were conducted in FY19 for environmental and Category 1 $8.3 FY19 14.9 +$10.1 lenders due diligence is a comprehensive process whereby potential environmental and social risks and impacts are identified and mitigation measures are agreed upon. social due diligence, monitoring, and self-evaluation on environment and social performance. To guard against unforeseen risks, MIGA also monitored the reputation and FY18 13.3 Clients can in turn reduce project development costs, actions of close to 1,000 clients and partners. FY17 11.0 improve project sustainability, and create value for Paid in capital FY16 7.5 business. MIGA Performance Standards are applied to $0.36 FY15 4.8 projects in line with the requirements of the MIGA Policy on Environmental and Social Sustainability. 18 Reinsurance 19 Annual Report 2019 MIGA Performance Standards MIGA Performance Standards on Environmental and Social (E&S) Sustainability Performance Standard 1: Performance Standard 5: ASSESSMENT AND MANAGEMENT OF LAND ACQUISITION AND  ENVIRONMENTAL AND SOCIAL RISKS AND IMPACTS INVOLUNTARY RESETTLEMENT Underscores the importance of identifying E&S risks and Applies to physical or economic displacement resulting impacts and of managing E&S performance throughout from land transactions such as expropriation or neglected the life of a project settlements Performance Standard 2: Performance Standard 6: LABOR AND  WORKING CONDITIONS BIODIVERSITY CONSERVATION AND SUSTAINABLE Recognizes that the pursuit of economic growth through MANAGEMENT OF LIVING NATURAL RESOURCES employment creation and income generation should be Promotes the protection of biodiversity and the sustain- balanced with protection of basic rights for workers able management and use of natural resources Performance Standard 3: Performance Standard 7: RESOURCE EFFICIENCY AND  POLLUTION PREVENTION INDIGENOUS PEOPLES Recognizes that increased industrial activity and urban- Aims to ensure that the development process fosters full ization often generate higher levels of air, water, and land respect for indigenous people pollution and that there are efficiency opportunities Performance Standard 4: Performance Standard 8: COMMUNITY HEALTH,  SAFETY, AND SECURITY CULTURAL HERITAGE Recognizes that projects can bring benefits to Aims to protect cultural heritage from adverse impacts of communities but can also increase potential exposure to project activities and support its preservation risks and impacts from incidents, structural failures, and hazardous materials Benefits of the Performance Standards CREATE VALUE FOR BUSINESS SOCIAL LICENSE TO OPERATE Supporting Women Sustainability has become an important factor in business strategies. Many companies recognize that The Performance Standards help clients maximize local development benefits and encourage the practice of good Entrepreneurs in Senegal by addressing E&S issues they can save on costs, corporate citizenship. Enhanced brand value and reputa- improve their brands and reputation, and strengthen tion may also be attractive to new investors or financiers. stakeholder relations. MIGA’s support for the 158.8-megawatt Parc Eolien Taiba As the brainchild of representatives of local women’s N’diaye wind farm will provide 450,000 megawatt-hours associations, the marketplaces offer over 100 new vending REALIZE OPPORTUNITIES AND GUARD AGAINST GAIN AN INTERNATIONAL STAMP OF APPROVAL of electricity per year to 2 million people and help avoid spaces and serve two villages in the area. UNFORESEEN RISKS The “Equator Principles,” which have been adopted by over 300,000 tons of carbon dioxide emissions per year. Implementing the Performance Standards helps over 75 of the world’s leading financial institutions in Equally important, the environmental and social perfor- Earlier, women in the community were struggling to earn companies identify and guard against interruptions developed and developing countries, are based on the mance commitments of the project include empowering a living because a portion of their fresh inventories would in project execution, brand protection, and/or access Performance Standards. These principles are estimated women in local communities. spoil in dusty and exposed environments. However, the to international markets. to cover over 70 percent of project finance debt in emerg- new marketplaces now provide a safe, sheltered space, ing markets. Working with over 35 local women’s associations, the combining economic and well-being benefits for both IMPROVE FINANCIAL AND project sponsor, Lekela Power, is helping to improve the vendors and customers. Businesswomen have celebrated OPERATIONAL PERFORMANCE lives of thousands of women through various initiatives: being able to enjoy a clean, shaded environment where Implementation of the Performance Standards can help two new marketplaces in the Taiba N’diaye Commune they can conduct business and that allows them to interact optimize inputs such as water and energy, as well as are already up and running, and future projects include and collaborate with their peers. minimize emissions, effluents, and waste, leading to a improvements to a local cereal mill and development of more efficient and cost-effective operation. a women's literacy center that will run on solar power. 20 Environmental and Social Sustainability 21 Annual Report 2019 MIGA Financial Highlights By fiscal year, millions of dollars 2015 2016 2017 2018 2019 Gross premium income 128.1 139.8 179.7 210.1 237.9 Net premium incomea 79.0 86.4 93.2 104.1 115.1 Administrative expensesb 44.9 48.1 51.3 51.6 57.8 Operating incomec 34.1 38.3 41.9 52.5 57.3 Ratio of administrative expenses to net premium income 57% 56% 55% 50% 50% Governance Accountability a. Net premium income equals gross premium income and ceding commissions less premium ceded to reinsurers and brokerage costs. b. Administrative expenses include expenses from pension and other postretirement benefit plans. c. Operating income equals net premium income minus administrative expenses. MIGA’s Board Independent Evaluation Group A Council of Governors and a Board of Directors, The Independent Evaluation Group (IEG) assesses Highlights representing 181 member countries, guide MIGA’s MIGA’s strategies, policies, and projects to improve the programs and activities. Each country appoints one Agency’s development results. The IEG is independent governor and one alternate. MIGA’s corporate powers are of MIGA management and reports its findings to By fiscal year, millions of dollars 2015 2016 2017 2018 2019 vested in the Council of Governors, which delegates most MIGA’s Board of Directors and the Board's Committee of its powers to a Board of 25 Directors. Voting power on Development Effectiveness. is weighted according to the share of capital that each Visit IEG’s website for more information: Total economic capitala 705 663 592 685 717 Director represents. The Directors meet regularly at the http://ieg.worldbankgroup.org/ World Bank Group headquarters in Washington, DC, where they review and decide on investment guarantee projects and oversee general management policies. Compliance Advisor Ombudsman Shareholder's equity 971 989 1,213 1,261 1,320 Visit the Board’s website for more information: The Office of the Compliance Advisor Ombudsman (CAO) http://www.worldbank.org/en/about/leadership/governors is the independent accountability mechanism for MIGA and IFC and reports directly to the President of the World Operating capital 1,312 1,329 1,398 1,471 1,542 Bank Group. The CAO responds to complaints from people affected by MIGA and IFC-supported business activities, with the goals of enhancing social and environmental Gross exposure 12,538 14,187 17,778 21,216 23,327 outcomes on the ground and fostering greater public accountability of both institutions. Visit the CAO’s website for more information: a. Total economic capital (EC) equals capital consumption from the guarantee portfolio, plus capital required for operational risk and investment risk. http://www.cao-ombudsman.org/ Effective FY17, EC is based on a new model and is not comparable with prior periods based on an older EC model. 22 Governance and Accountability 23 Annual Report 2019 Spotlight on FY19 MIGA 2019 Gender CEO Award The MIGA Gender CEO Award honors senior managers (CEOs or equivalent) who have a proven track record of seeking to further the causes of women’s advancement and gender equality while contributing to the World Bank Group’s twin goals of poverty reduction and shared prosperity. In March 2019, MIGA presented the Gender CEO Award to Lara de Mesa, Head of Responsible Banking at Banco Santander Group. De Mesa has held that position at Santander since September 2018. Its responsible banking agenda is making Santander one of the most responsible banks across all countries where Santander is present (including Argentina, Brazil, Chile, Germany, Mexico, From climbing mountains to raise awareness of climate change, to seeing Poland, the United Kingdom, and the United States). the power of solar energy transform a vast desert, to raising the profile of women leaders, MIGA had a year of fruitful events and memorable moments. Mount Kenya and the One Planet Summit Below are highlights from FY19. In March 2019, Merli Baroudi, Director of Economics and Sustainability at MIGA, joined a World Bank Group expedition team that climbed Mount Kenya to see The World Bank Group/IMF Annual firsthand how climate change is impacting communities and how they are adapting and driving opportunities for Meetings in Bali Nusa Dua, Indonesia, climate action. They were also joined by a representative October 2018 from the Government of Kenya—the Chief Meteorologist for the Ministry of Environment and Forestry—and The 2018 Annual Meetings were held in Bali Nusa Dua, Connect4Climate Youth Ambassador Liatile Putsoa. Indonesia, and were an opportunity to highlight MIGA’s progress and meet with partners and clients. The event focused on the need to drive more FDI to Indonesia while recognizing the $850 million in guarantees MIGA has issued for projects in the country, which have contributed The World Bank Group/IMF Spring to delivery of power to over 110,000 people and facilitated Meetings in Washington, DC, April 2019 over 25 million new telecom subscriptions. For the 2019 Spring Meetings, over 250 people attended the MIGA event, "Driving Private Investment to Fragile Settings." The event discussed the unique challenges Benban Solar Park that countries in fragile settings face in attracting private capital. The MIGA Rikweda Project was showcased as In February 2019, MIGA EVP and CEO Keiko Honda visited an innovative way that MIGA guarantees have mobilized the Benban Photovoltaic Solar Park in Aswan, Egypt. MIGA private finance in the agribusiness sector in Afghanistan. provided a $103 million guarantee for the project alongside The event featured David R. Malpass, President, World IFC financing. The 37-square-kilometer solar park will Bank Group; Jacob Jusu Saffa, Minister of Finance, Sierra Photo credit: Romain Levrault (@romain.levrault on Instagram) house 32 power plants. By mid-2019, when all the plants Leone; Mase Rikweda, CEO, Rikweda Fruit Processing are scheduled to be powered up, they will be capable of Company; Hartwig Schafer, Vice President, South Asia producing a combined 1,650 megawatts of clean elec- Region, World Bank; and Keiko Honda, Executive Vice tricity. Once complete, the site will be the world’s largest President and CEO, MIGA. solar park. In May 2019, World Bank Group President The live broadcast can be found here: Malpass also visited the site. http://live.worldbank.org/driving-private-investment-to-fragile-settings 24 MIGA Spotlight 25 Annual Report 2019 Who We Are Contact information Senior Management Regional Keiko Honda Hoda Moustafa Executive Vice President and CEO Regional Head, Africa khonda@worldbank.org hmoustafa@worldbank.org S. Vijay Iyer Olga Sclovscaia Vice President and COO Head, Europe & Central Asia sviyer@worldbank.org osclovscaia@worldbank.org Sarvesh Suri Jae Hyung Kwon Director, Operations Head, North Asia ssuri1@worldbank.org jkwon@worldbank.org Muhamet Fall Tim Histed Associate Director and Chief Underwriter, Operations Head, South and Southeast Asia mfall3@worldbank.org thisted@worldbank.org Aradhana Kumar-Capoor Olga Calabozo Garrido Director and General Counsel Head, Latin America & the Caribbean akumarcapoor@worldbank.org ocalabozogarrido@worldbank.org Santiago Assalini Shuichi Hayashida Director, Finance and Risk Head, Japan sassalini@worldbank.org shayashida@worldbank.org Merli Baroudi Rouzbeh Ashayeri Director, Economics and Sustainability Senior Underwriter, North America mbaroudi@worldbank.org rashayeri@worldbank.org Layali Abdeen Senior Underwriter, Middle East and North Africa Sectors labdeen@worldbank.org Lin Cheng Nabil Fawaz Representative, China Global Head and Sector Manager, Agribusiness and lcheng1@worldbank.org General Services nfawaz@worldbank.org MIGA MANAGEMENT Elena Palei Reinsurance Global Head and Sector Manager, Front row, from left to right: Back row, from left to right: Infrastructure–Telecom, Transport and Water Marc Roex Merli Baroudi S. Vijay Iyer epalei@worldbank.org Head, Reinsurance Director, Economics and Sustainability Vice President and Chief Operating Officer Chris Millward mroex@worldbank.org Global Head and Sector Manager, Finance and Keiko Honda Santiago Assalini Capital Markets Executive Vice President and Chief Executive Officer Director, Finance and Risk cmillward@worldbank.org Business Inquiries Aradhana Kumar-Capoor Muhamet Fall Marcus Williams Director and General Counsel Associate Director and Chief Underwriter, Operations Global Head and Sector Manager, Energy and migainquiry@worldbank.org Extractive Industries Sarvesh Suri mwilliams5@worldbank.org Director, Operations 26 Who We Are 27 Annual Report 2019 Follow MIGA: company/multilateral-investment-guarantee-agency-miga @miga MIGAWorldBank Since its creation, MIGA has issued over $55 billion in guarantees across 114 developing countries.