RESTRICTED
WORLD TRADE WT/WGTI/W/5
29August 1997
ORGANIZATION(97-3111)
Original: English Working Group ontheRelationship
between Trade andInvestment
COMMUNICATION FROM THE WORLD BANK
Reproduced herewith isinformation presented bytherepresentative oftheWorld Bank atthe
meeting oftheWorking Group of2and3June1997 under theagenda item"Existing International
Activities andInitiatives".WT/WGTI/W/5
Page2
WORLD BANK GROUP SUPPORT FOR PRIVATE INVESTMENT INDEVELOPING
COUNTRIES
Thisreport provides abriefdescription ofWorld Bank Group activities andprogrammes that
support private investment indeveloping countries. These activities aregrouped under sixheadings:
TheInternational Finance Corporation. TheIFCprovides bothloanandequity finance toprivate sector
projects.
TheMultilateral Investment Guarantee Agency. TheMIGA provides investment insurance against
non-commercial riskindeveloping countries.
TheForeign Investment Advisory Service. FIAS advises developing country governments onforeign
investment laws, policies, regulations andprocedures. Ithelps agovernment toorganize theframework
andinstitutions needed topromote andregulate foreign direct investment andtodevelop investment
promotion strategies toattract foreign capital, technology andmanagerial expertise.
TheInternational Center forSettlement ofInvestment Disputes. TheICSID provides facilities forthe
conciliation andarbitration ofdisputes between governments andforeign investors.
TheWorld BankInvestment Guarantee Program. World Bankguarantees areprovided toprivate lenders
andcansupport either public orprivate sector projects. Thisfacility hasbeenparticularly important
tofoster infrastructure investments. Incases, forexample, inwhich thegovernment hasmoved from
owner oroperator toregulator orpurchaser ofaservice, attracting private lenders toinvestment projects
isoften difficult because agovernment ’sadherence tocontractual obligations isseenbyfinanciers as
asovereign orpolitical risk,which many private lenders consider unacceptable. Backing ofsuch
obligations byacreditworthy thirdparty -suchastheWorld Bank -isoften critical forattracting debt
andequity investment.
TheInitiative onPrivate Investment inInfrastructure. TheWorld Bank Group hascurrently under
developmentaprogrammetofosterincreasedprivateinvestmentininfrastructureindevelopingcountries.
AshasbeenthecasewithBank Group initiatives inthepast,thisprogramme willlikely involve both
theapplication ofexisting financial products andthedevelopment ofnewones.
Each ofthese programmes andactivities satisfies different needs andeach hasitsown
characteristic dimensions. Though itisdifficult togeneralize overthese programmes andactivities,
thefollowing table describes inaschematic waythevariety ofsupport thatBank programmes and
activities provide fordifferent private sector financial instruments.
Thisschema however doesnotbring outtwodimensions oftheBank Group ’sprogrammes
andactivities thatshould benoted. Thefirstofthese isanincreasing attention tointellectual aswell
astofinancial products. Although theprimary functions oftheIFCandtheMIGA areinvestments
andguarantees,respectively,eachhasanextensiveprogrammeofinformationmanagement,dissemination
andin-the-field advice bothtopotential investors andtothegovernments whoareresponsible forthe
policies thatattempt toattract andtoregulate foreign investment. Asthereader willnote, eachof
theprogrammes andactivities described below haspolicy advice andinformation management
dissemination assignificant elements.
Another characteristic oftheBank Group ’sprogrammes andactivities thatshould notbe
overlooked istheir dynamism. TheInfrastructure Initiative, forexample, isaprogramme underWT/WGTI/W/5
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development. Notonlydonewprogrammes emerge, existing programmes continuously adopt to
changing circumstances andtonewchallenges. TheWorld Bank Guarantee Program, forexample,
evolved fromtheExpanded Cofinancing Operations (EOC) programme andtheEOCprogramme itself
wasamodification ofanantecedent programme. Likewise, within programmes, adaptation isalways
taking place. Thesections below ontheICSID, theMIGA andtheIFCdescribe some ofthenew
products theyhavedeveloped andthenewactivities theyhaverecently undertaken.WT/WGTI/W/5
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World Bank Group Support forPrivate Sector Investment Instruments
Equity Instruments
Characteristic IFC1MIGA2IBRD3
Eligibility Wholly owned
private companies
andjoint ventures
May finance
companies with
government
ownership provided
there isprivate
participation and
theyarerunona
commercial basis or
arebeing privatizedAnindividual who
isacitizen ofa
member country
other thanthe
country inwhich
theinvestment is
being made
Acorporation that
isestablished ina
member country
andhasbusiness
offices inthat
countryAnyinvestment thatmeets Bank
appraisal criteria, consistent with
macroeconomic andsectoral
policies
Bank support (loan orguarantee)
requires acounterguarantee from
thehostgovernment
Type of
investmentStock Notapplicable Loans tofund government equity
(minority) stake inaproject (for
example, joint venture with
private investor)
Coverage offered
(Guarantees,
insurance)Notapplicable Expropriation
Warandcivil
disturbance
Currency transfer
Breach ofcontractNotapplicable
Amounts Debt andequity
combined notto
exceed 25% of
project cost
Single obligor limit:
3%ofportfolio
Country limit: 12%
ofportfolio or25%
ofnetworth and
reserves$50million per
project
$225 million per
countryUpto100% ofthegovernment ’s
equity stake
Noproject limits
Country exposure guided by
lending programme
1TheIFCundertakes mainly equity anddebtinvestments. Although ithasguarantee authority, itusesitonlyrarely,
mainly tosecure local financing forprojects.2MIGA provides political riskinsurance forequity anddebtanddoes notinvest foritsownaccount.3TheIBRD cansupport private investment infourways: funding government equity stakes injointventures with
private investors, lending directly toprivate companies withagovernment guarantee, lending through governments toprivate
entities, andguaranteeing private loans toprivate entities.WT/WGTI/W/5
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World Bank Group Support forPrivate Sector Investment Instruments (cont'd)
DebtInstruments
Characteristic IFC1MIGA2IBRD3
Eligibility
Type of
investment
Coverage offered
(Guarantees,
insurance)
AmountsSame asequity
Senior loans forthe
IFC’sownaccount
andthatofB-loan
participants
Subordinated loans
Convertible loans
Notapplicable
Debt andequity
combined forthe
IFC’sownaccount
nottoexceed 25%
ofproject cost
Single obligor limit:
3%ofportfolio
Country limit: 12%
ofportfolio or25%
ofnetworth and
reservesSame asequity
Notapplicable
Expropriation
Warandcivil
disturbance
Currency transfer
Breach ofcontract4
Cancover uptoa
4:1ratio ofdebtto
associated equity
inaproject, within
project, within
project and
country exposure
limitsSame asequity
Loans:
Governments canonlend Bank
funds onasenior orsubordinated
basis
Direct loans toprivate entities
withgovernment guarantee
Loan guarantees:
Government contractual
obligations
Transfer risk
Partial credit guarantees
Noproject limits
Country exposure guided by
lending programme
1TheIFCundertakes mainly equity anddebtinvestments. Although ithasguarantee authority, itusesitonlyrarely,
mainly tosecure local financing forprojects.2MIGA provides political riskinsurance forequity anddebtanddoes notinvest foritsownaccount.3TheIBRD cansupport private investment infourways: funding government equity stakes injointventures with
private investors, lending directly toprivate companies withagovernment guarantee, lending through governments toprivate
entities, andguaranteeing private loans toprivate entities.4Although MIGA canprovide breach ofcontract coverage, ithasrarely done so.WT/WGTI/W/5
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International Finance Corporation
TheInternationalFinanceCorporation(IFC),amemberoftheWorldBankGroup,istheworld's
largest source ofequity andloanfinancing forprivate enterprise inemerging economies. Itsmandate
istopromote thegrowth ofproductive andprofitable private enterprises initsdeveloping member
countries. Incarrying outthismandate, IFCprovides debtandequity finance toprivate sector projects,
mobilizes largevolumes ofadditional funding fromother sources, andoffers abroad range ofadvisory
services andtechnical assistance tobusinesses andgovernments.
Strong shareholder support andasubstantial capital baseenable IFCtotapinternational capital
markets tomeettheneeds ofitsclients. Since itsestablishment in1956, IFChasinvested more than
$30billion inover1,700 businesses and120developing member countries.
IFCoffers threebroad andcomplementary services. Itstraditional andlargest activity isproject
finance. Using itsownfunds IFCprovides bothloanandequity finance toprivate sector projects that
meet itsappraisal criteria, butwhich cannot getfinancing from other sources onreasonable terms.
Italsooffer quasi equity andfinancial riskmanagement products.
Another major activity isthatofresource mobilization. IFCraises additional funds fromforeign
commercial banks through itsloanparticipation programme. Ithelps individual corporations from
emerging markets totaptheinternational capital markets. IFCalsoraises funds from institutional
investors through underwriting arrangements forpublic offerings ortheprivate placement ofshares,
debentures, andother corporate securities.
Itsthirdandincreasinglyexpandingactivityisprovidingcountry,industry,financialandtechnical
advisory services tomember country governments andtoprivate sector corporations.
Financial products: loans, equity, quasi equity andriskmanagement services
Loans areIFC'slargest product. TheIFCprovides fixed andvariable rateloans inanyof
theleading currencies. Italsoprovides afullrange ofquasi equity finance, including convertible
debentures,subordinatedloans,loanswithwarrantsandotherinstruments.Theseproductsareprovided,
whenever necessary, toensure thataproject issoundly funded.
Over thelastfiveyears, IFC'sproject financing activity hasincreased dramatically, from
$2.8billion in1991to$8.1billion in1996. Thisgrowth isthedirect result ofthecontinuing momentum
infavour oftheprivate sector.
InFY96, IFCapproved financing of$3.2billion foritsownaccount and$4.9billion inthe
form ofunderwriting andsyndications. Total financing of$8.1billion wasapproved forprojects in
abroad range ofsectors, which indeclining order asapercentage ofthetotalinclude: infrastructure
$2,247 million (28%); capital markets, development finance, andfinancial services $1,698 million
(21%); chemicals, petrochemicals, andfertilizers $840 million (10%); food andagribusiness
$811 million (10%); general manufacturing, automotive industry, andindustrial services $665million
(8%); mining ofmetals, other ores, andfuelminerals $643 million (8%); cement andconstruction
materials $497million (6%); oilrefining $302million (4%); textiles $187million (2%); hotels and
tourism $115 million (1%); andtimber, pulpandpaper $112 million (1%).
Inkeeping with ourglobal perspective andgoalofachieving geographical diversity in
investments, IFC's$8.1billion infinancing in1996 wasspread over sixregions asfollows:
$3,628 million inLatin America (or45%); $2,773 million inAsia(24%); $910 million inCentral
Asia, theMiddle EastandNorth Africa (CAMENA), or11%; $617 million inEurope (8%);WT/WGTI/W/5
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$190 million inSub-Saharan Africa (2%); and$1million inglobal investments (0%). Theabove
figures include syndications. Notincluding syndications, theregional investment distribution forIFC's
ownaccount isasfollows: Latin America 39%, Asia27%, CAMENA 16%, Europe 13%, Sub-Saharan
Africa 5%,andGlobal 0%. Ofthe$8.1billion totalinvested byIFCinFY96, 60%($4.9 billion)
wasfrom syndications and40%($3.2 billion) wasforIFC'sownaccount.
Since 1990, IFChasoffered risk-management products toclients tohelpthem better manage
financial risks. These products include currency andinterest rateswaps, futures andoptions oninterest
rates, forward contracts, currency hedging andother derivative products. Other financial products
offered byIFCinclude credit andequity lines, venture capital, andleasing.
Resource mobilization: loanparticipations, capital markets andunderwriting
Mobilizing funds from other investors andlenders isoneofIFC'sessential functions. The
IFCactively seeks partners forjoint ventures andraises additional finance byencouraging other
institutions tomake investments inWorld Bank projects. In1996, forevery $1ofproject financing
approved byIFCforitsownaccount, otherinvestors andlenders provided $5.13 -either directly through
IFC'sloanparticipations orunderwriting ofinvestment funds andsecurities issues, orindirectly, in
theform ofcofinancing.
IFChasbeenattheforefront ofdeveloping innovative channels forinvestor funds where
traditional channels havenotbeenavailable. During 1995, IFCsigned itsfirstsyndication ofastructured
UScommercial paper issuance facility, aUS$150 million issue foraThaifinance company. Such
facilities enable companies indeveloping countries toaccess theUScommercial paper market. In
fiscal year1996, IFCcontinued itssuccess instructuring suchfacilities bysyndicating US$495 million
forfourclients:
Argentina 'slargest manufacturer oftextiles;
thelargest private sector bankinArgentina;
aprivate Turkish commercial bank;
achemical products manufacturer inMexico.
Advisory services: country, industry, financial andtechnical
Advisory services areprovided forawide range ofactivities including project assistance,
privatization andrestructuring, capital markets development, foreign investment advice, andsmall and
medium business development.
OneofIFC'slong-term priorities istopromote anddevelop domestic capital markets. As
such, itadvises governments onfiscal, legalandregulatory matters andontheinstitutional structure
required todevelop amarket-oriented financial sector. IFChasprovided advice onthedesign and
developmentofthegenerallegislativeenvironment,includingbasiccompanylaw,whichisaprerequisite
tosecuritiesmarketactivities.IFCalsoofferstechnicalassistanceinestablishingaregulatoryframework
forbanking andnon-banking financial institutions, including supervisory andenforcement entities and
mechanisms. Inaddition, theCorporation reviews andrestructures existing institutions (such as
commercial banks andissuance companies), andadvises onventure capital andleasing activities.
Aspartofitsadvisory services, IFCestablished FIAS ortheForeign Investment Advisory
Service-nowoperatedjointlywithIBRD-toassistdevelopingcountriesonhowtoattractlargeramounts
offoreign direct investment. FIAS isdescribed inafollowing section.WT/WGTI/W/5
Page8IFCApproved Projects: Total IFCFinancing byRegion perFiscal Year -asof31/3/97
(current US$Millions)
RegionFirst
Project
Approval
FYPre-1959 1960-69 1970-79 1980-89 1990-
Present1994 1995 1996 1997
YTDCum. Total%ofIFC
TotalTotal
Project
Cost%of
IFC
Total
ASIA 58 2.65 69.01 302.09 1,316.47 4,343.45 604.87 691.22 887.47 300.81 6,033.55 23.92 49,299.41 30.11
CAMENA*58 1.68 37.89 173.54 602.95 2,087.67 382.71 386.42 516.45 118.46 2,903.73 11.51 16,648.34 10.17
EUROPE 60 0 14.31 281.04 824.95 2,520.60 442.69 403.45 405.71 219.9 3,640.89 14.43 21,939.97 13.4
LAC**57 16.06 105.44 516.78 2,967.37 6,172.59 814.85 1,048.00 1,257.43 683.33 9,778.04 38.76 60,168.53 36.75
SUBSAH.
AFRICA60 0 41.09 136.71 790.35 1,564.54 156.52 317.99 174.4 76.71 2,532.68 10.04 13,262.95 8.1
WORLD 58 0.89 1.05 0.00 33.70 304.72 61.10 30.00 1.00 60.00 340.36 1.35 2421.70 1.48
21.28 268.79 1,410.10 66,535.79 16,993.57 2,462.74 2,877.08 3,242.46 1,459.21 25,229.25 100.01 163,740.90 100.01
*Central Asia, Middle EastandNorth Africa**Latin America andCaribbean CountriesWT/WGTI/W/5
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Multilateral Investment Guarantee Agency (MIGA)
TheMultilateral Investment Guarantee Agency wascreated in1988 inresponse tothetwin
debtcrises ofthe1980s; the29founding governments shared aconviction thattheheavily indebted
countriesneededtorelymoreonprivateenterpriseandforeignprivateinvestment,anexpandablegrowth
resource thatwould notcompound theirdebtproblems. Thesame prescription would enable other,
lessindebted countries toavoid thedebttrap. Atthattime, annual netflows offoreign direct investment
todeveloping countries hadfallen to$8-$9 billion, andeventhissmall amount wasconcentrated in
afewcountries, mainly inEastAsia.
InSeptember 1985 theWorld Bank Board ofGovernors began theprocess ofcreating anew
investment insurance affiliate byendorsing theMIGA Convention thatdefined itscoremission "to
enhance theflowtodeveloping countries ofcapital andtechnology forproductive purposes under
conditions consistent withtheirdevelopmental needs, policies andobjectives, onthebasisoffairand
stable standards forthetreatment offoreign investment".
ThenewWorldBankaffiliatewascreatedtosupplementnationalandprivateagenciessupporting
foreigndirectinvestmentthroughinvestmentinsurance.Itwasdesignedtoencourageforeigninvestment
byfilling gapsininvestment insurance against non-commercial risksindeveloping countries tomake
investment opportunities inthose countries more competitive withalternatives inindustrial countries.
MIGA 'smultilateral character andjointsponsorship bydeveloped anddeveloping countries wereseen
asenhancing confidence among theparties tointernational investment.
TheMIGA Convention alsogives theAgency atechnical assistance mandate to"carry out
research, undertake activities topromote investment flows anddisseminate information oninvestment
opportunities indeveloping member countries, withaviewtoimproving theenvironment forforeign
investment flows tosuchcountries".
MIGAhascarriedoutthismandatethroughpromotionalprogrammes,disseminatinginformation
oninvestment opportunities, andtechnical assistance thatenhances national investment promotion
capabilities inanincreasingly competitive environment.
Some ofMIGA 'sniches intheglobal market forinvestment insurance were foreseen as:
augmenting thecapacity ofother insurers through co-insurance orreinsurance; insuring investment
incountries restricted orexcluded bythepolicies ofother insurers; serving investors whodonothave
access toother official insurers; providing coverage toinvestors ofdifferent nationalities ina
multinational syndicate, thereby affording convenience ininsurance contracting andclaims settlement,
andproviding coverage offorms ofinvestment notoffered byother insurers andonterms designed
tobemore effective inencouraging investment.
Through itsGuarantee Program ,MIGA provides investment guarantees against certain
non-commercialrisks(i.e.,politicalriskinsurance)toforeigninvestorsindevelopingmembercountries.
TheProgram isdesigned tocomplement national andprivate investment insurance schemes. MIGA
underwrites directly andalsocooperates withother political riskinsurers through co-insurance and
reinsurance arrangements toprovide investors more comprehensive investment insurance coverage
worldwide. In1995 italsointroduced abrokerage programme, encouraging investment brokers to
cooperate withMIGA. MIGA insures against thefollowing risks: Currency Transfer, Expropriation,
Breach ofContract, WarandCivil Disturbance.WT/WGTI/W/5
Page10
Inthefirsttwoquarters offiscal year1997(starting 1July1996), MIGA issued 21guarantee
contracts totalling US$170 million incoverage forprojects in11hostcountries. These projects will
facilitate approximately US$430 million inforeign investment andresult inthecreation ofmore than
1,000 jobs. Further, MIGA 'sinvestment marketing services directly benefited 33developing member
countries during thefirstpartofFY97 andincluded aninvestor 'sforum onhotel andtourism
development fortheAndean Region, andinvestment promotion workshops forCentral AsiaandTunisia.
MIGA-guaranteed investments inthefirsthalfofFY97 areintheinfrastructure, manufacturing, tourism
andbanking sectors.WT/WGTI/W/5
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Examples ofGuarantee Activities
NewContracts ofGuarantee Issued inFY1997 (asof31December 1996)
Guarantee Holder Project Description HostCountryMax. Limit of
Liability
(US$ mill.)
Société Générale Banking Bangladesh 9.00
Philips Electronics,
N.VManufacturing Brazil 27.00
Purolite International
Limited Manufacturing China 3.83
Kimberly-Clark
Corp.Infrastructure China 8.55
Coastal Wuxi Power,
Ltd.Infrastructure China 4.21
Coastal Wuxi Power,
Ltd.Infrastructure China 9.34
Citibank, N.A. Banking Colombia 23.00
Motorola Inc. Infrastructure Colombia 5.00
Caribbean Mercantile
BankTourism Costa Rica 7.65
Radisson Hotels
InternationalTourism Costa Rica 1.91
Heckett Multiserv
InvestmentManufacturing Egypt 2.24
McDonnell Douglas
Finance Corp.
Power, L.P.Infrastructure Jamaica 14.37
Cogen Technologies
SabaCorp.Infrastructure Pakistan 5.00
ABN Amro Bank,
N.V.Banking Russia 7.20
IBA, B.V. Banking Russia 0.90
Interfirma B.V. Banking Russia 0.90
Harsco Bermuda
Ltd.Manufacturing Saudi Arabia 1.79
Harsco Bermuda
Ltd.Manufacturing Saudi Arabia 0.69
Harsco Corporation Manufacturing Saudi Arabia 2.00
Enka Holding
Yatirim A.S.Construction Russia 17.00
Citibank, N.A. Banking Venezuela 18.00
GRAND TOTAL =
21Contracts $169.57WT/WGTI/W/5
Page12
MIGA 'sInvestment Marketing Services Department (IMS) istheAgency 'sprincipal
instrument forproviding technical assistance ininvestment promotion tomember countries. IMShelps
topromote foreign direct investment (FDI) anddisseminate information about investment opportunities
inthedeveloping andtransitional economies (MIGA 'sCategory IIcountries).
IMSproducts fallintothree main categories: Investment Promotion orMarketing Support,
Information Dissemination andManagement Information Systems.
TheInvestmentPromotionorMarketingSupportactivityincludestheorganizationofpromotional
conferences andassociated executive training programmes, promotion strategy andinvestor services
workshops, investment missions, etc.IMSpursues amulti-country, single sector focus wherever
possible, togenerate thecritical massofinvestment opportunities needed toguarantee investor response,
ensurecost-effectiveness,andachievethewidestpossiblecollaborationbyallinterestedparties.Applying
thisapproach, IMSalready hasplayed aleading roleininvestment promotion inthetourism sector
(inSouth America andtheMiddle East, withprogrammes inAsiaandCentral Asiaintheplanning
stage), andinthemining sector (inAfrica, withafurther programme planned forCentral Asian and
Balkan Republics). IMSplans toapply ananalogous approach toother "sectors", suchasSouth-South
investments andSmall andMedium Enterprises.
IMSispioneering theuseofCD-ROM technology asamedium forthedissemination of
information oninvestment opportunities. Working closely withcorporate sponsors andindustry experts,
IMShasbeendeveloping aCDseries onAfrican Mining, thefirstedition ofwhich wasreleased in
May, 1995, andtheprototype ofaCDontheTourism sector. These tools allow forpresentation -
inauser-friendly, interactive format -ofalarge volume ofinformation oninvestment conditions and
opportunities andthekeyplayers involved. IMSalsohaslaunched aglobal electronic marketing,
information exchange, andcommunications network onFDI, carried overtheInternet. Dubbed
"IPAnet", itoffers directories, billboards, electronic conferences, databases, news, areference desk,
andsophisticated search, market intelligence-gathering, andcommunications facilities. IPAnet isan
initiative toharness thefunctionalities andinformation resources oftheInternet forpromotion of
internationalinvestment.ThroughIPAnet,visitorscanexchangeinformationaboutinvestmentworldwide
-from business operating conditions todetailed descriptions ofinvestment projects, jointventure
opportunities, andprivatization initiatives. IPAnet isopen forexploring toanyone whoregisters.
Registered Visitors canaccess allthegeneral databases, directories, calendars ofevents, andother
functions IPAnet offers, including thefollowing freeinformation andservices: global information
oninvestment opportunities, business conditions, andleading organizations ininternational investment;
proceedings andcalendars ofinvestment-related events; avehicle toannounce upcoming events and
distribute databases; World Bank Group project, procurement, andeconomic information; andan
opportunity toparticipate inexclusive clubs andon-line fora.
IMShasdeveloped astate-of-the-art management information system (MIS) software package
designed specifically forIPAs. Thissoftware hasalready beenintroduced, along withtraining, into
entities insixcountries encompassing thefullspectrum ofIPAsophistication levels. More than20other
countries haverequested thesoftware. Further installations areplanned andnewmodules areunder
preparationwhichwillaccelerateitsintroduction.TheMISusesstandardPCtechnologyandincorporates
ageneric, user-friendly interface adaptable toarange ofpromotion institutions. Ithastwocomponents:
anInvestor Tracking System (ITS), which enables IPAs totrack, andreport on,relationships with
investorsandincludescontactmanagement,workmanagement,investmentimpactanalysis,andreporting
features thathelptoenhance marketing effectiveness andinvestor services, andsimplify theday-to-day
work ofinvestment promotion; andaBusiness Operating Conditions (BOC) database -anelectronic
repository forinformation primarily intext,photographic, graphical andstatistical formats -which
enables IPAstoquickly andeasily generate custom-tailored responses toinvestors 'information needs.WT/WGTI/W/5
Page13
MIGA ’sInvestment Marketing Services Department willcontinue tohelpvarious developing
member governments toimprove theinvestment climate intheircountries. Inparticular, MIGA is
organizing amajor symposium topromote investment opportunities inthemining sector inAfrica -
thefourth annual Africa Mining Investment andBusiness Opportunities Symposium willbeheldin
Denver, Colorado, 3-5June1997. Thissymposium willbring together therelevant ministers andother
decision makers from themajority ofcountries ontheAfrican continent withkeyrepresentatives of
international mining companies fromaround theworld. Inaddition toreviewing thegeneral conditions
forforeign investment, thesymposium willfeature presentations byparticipating countries onareas
available forexploration, including areview ofwork carried outtodateinthese areas andtheirplans
forfurther development. Information willalsobepresented onprojects atmore advanced stages that
areavailable forinvestment, andthetypeandscope offoreign investment sought willalsobeaddressed.
Financing ofmining ventures inAfrica willbeaprominent feature oftheprogramme which willinclude
speakers from international agencies, investment banks andindustry.
ListofWorldwide Activities fortheMIGA Investment Marketing Services
February 1990 -January 1997
CONFERENCES
Andean Tourism, Peru September 1996
Caribbean Tourism, USA June1996
African Mining III,Canada May1996
Central Asia/Balkans/Eastern Europe Mining, Canada May1996
African Mining II,Canada May1995
Arab World Tourism (co-sponsor), Syria March 1995
Turkey Conference (co-sponsor) October 1994
Africa Mining, USA June1994
South America Tourism, Brazil October 1993
Botswana Investment Promotion May1993
Namibia Mining (co-sponsor) March 1993
Pakistan Investment Promotion November 1991
Jamaica Investment Promotion February 1991
Hungary Investment Promotion September 1990
Ghana Investment Promotion February 1990
PROMOTION STRATEGY WORKSHOPS
Andean Tourism, Peru June1996
Russia Investment Promotion October 1995
Southern Africa Investment Promotion, South Africa October 1995
Jordan Tourism September 1995
Tunisia Investment Promotion October 1994
Brazil Tourism June1994
Russian Investment Promotion, Austria June1994
Africa Tourism, Ghana May1994
Paraguay Tourism May1994WT/WGTI/W/5
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Trinidad andTobago Investment Promotion, Trinidad March 1994
Brazil Investment Promotion March 1994
Malawi Investment Promotion January 1994
Brazil Tourism I December 1993
INVESTOR SERVICES WORKSHOPS
Indonesia October 1996
Korea March 1996
Malaysia March 1996
Arab Mining, Syria November 1995
Islamic Chamber ofCommerce &Industry, Egypt September 1995
Paraguay June1994
Uruguay June1994
Uganda March 1993
EXECUTIVE TRAINING PROGRAMMES
Arab Industrial Development andMining Organization,
MoroccoDecember 1996
Central Asia&Balkans Mining III,Turkey October 1996
Central Asia&Balkans Mining II,Turkey December 1995
Central Asia&Balkans Mining, Turkey June1995
Tanzania Mining April 1995
Southern Africa Mining, South Africa April 1995
Francophone Africa Mining, Senegal April 1995
Africa Mining, Zimbabwe May1994
Guyana Investment Promotion April 1993
Swaziland &Lesotho Investment Promotion, Swaziland March 1993
Namibia Investment Promotion March 1993
Zambia Investment Promotion March 1993
Angola Investment Promotion April 1992
Former Czechoslovakia Investment Promotion October 1991
Hungary Investment Promotion September 1991
Lusophone Africa Investment Promotion, Portugal September 1991
INVESTOR/INVESTMENT MISSIONS
Namibia toAsia November 1996
Ghana toAsia September 1996
Ghana toSouth Africa September 1996
Ghana toSoutheast Asia November 1995
USA toZambia andGhana October 1995WT/WGTI/W/5
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Namibia toSoutheast Asia September 1995
Namibia toSoutheast Asia November 1994
Brazil toUnited States June1994
Trinidad andTobago toUSA June1994
Namibia toPortugal February 1994
USA toGuyana April 1993
ElSalvador toUSA September 1992
INVESTMENT PROMOTION AGENCY NETWORK FORA
African Forum, Zimbabwe March 1996
Global Forum, Malaysia March 1996
Latin American Forum, Chile May1995
Global Forum, Spain September 1994
African Forum, Tanzania February 1994
Global Forum, USA September 1993
CD-ROM INITIATIVES
African Mining CD-ROM (First Edition) May1995
MISINSTALLATION/TRAINING
Ghana September 1996
Zimbabwe April 1995
NewSouth Wales, Australia March 1995
Uganda July1994
Cape Town, South Africa February 1994
Malawi October 1993
Venezuela August 1993
IPAINSTITUTIONAL ASSESSMENTS
Trinidad andTobago October 1995
Russia October 1995
Namibia March 1995
Ghana March 1995
Fiji December 1994
Tunisia April 1994WT/WGTI/W/5
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INVESTMENT PROMOTION SKILLS TRAINING
Central Asia&Balkans, Austria January 1997
Tunisia Foreign Investment Promotion Agency, USA November 1996
Central Asia/Balkans/Southeast Asia, USA October 1996
Nigeria October 1996
Tunisia Foreign Investment Promotion Agency, USA September 1996
Namibia February 1996
Zimbabwe April 1995
Ghana March 1995
Uganda July1994
Malawi October 1993WT/WGTI/W/5
Page17
Foreign Investment Advisory Service (FIAS)
Aspartofitsadvisory services, IFCestablished FIAS ortheForeign Investment Advisory
Service, nowoperated jointly withIBRD, toassist developing countries onhowtoattract larger amounts
offoreigndirectinvestment.FIASadvisesgovernmentsonforeigninvestmentlaws,policies,regulations
andprocedures; organizes theframework andinstitutions needed topromote andregulate foreign direct
investment; anddevelops investment promotion strategies toattract foreign capital, technology and
managerial expertise.
FIASoffersacomprehensiverangeofservicestohelpgovernmentstoattractforeigninvestment.
Some common topics forassistance are:(a)Legal andRegulatory Environment: FIAS canreview
acountry 'slegalandregulatory environment andrecommend appropriate measures insuchareas as
screening procedures, ownership requirements, foreign exchange provisions, national treatment issues,
access toland, andprotection ofinvestment under national laws andinternational conventions;
(b)Investment Incentives: FIAS cananalyse incentives toensure thattheyarecompetitive andcost-
effective;(c)ForeignDirectInvestmentDatabase:FIAScandesignanon-intrusivesystemforcollecting
dataondirect investment, including measuring theimpact ofinvestments onsuchkeyvariables asjob
creation andexport growth; (d)Investment Agencies: FIAS canhelptodesign institutions, drawing
onmodels thathavebeeneffective elsewhere andaiming toinvolve theprivate sector inappropriate
ways; (e)Promotion Strategies: FIAS canassist informulating apromotion strategy thatidentifies
acountry 'scompetitive advantages andtargets specific opportunities; (f)Building Linkages: FIAS
canhelpgovernments todesign programmes thatfoster supply andother relationships between
foreign-owned anddomestic companies; (g)Foreign Investment inInfrastructure: FIAS isableto
aidgovernments tocreate asuitable legalandregulatory regime, aswellastoadvise onpromotion
opportunities.
Inadditiontoadvisoryprojects,FIASworkstodevelopanddisseminateknowledgeaboutforeign
direct investment through applied research andconferences.
Activities byregion
Africa hasre-emerged intheinternational investment arena, after along period when
inappropriate economic policies andadministrative barriers inmany countries discouraged foreign
investment. Since 1986, FIAS hasadvised overtwenty-five governments intheregion onhowto
formulate newrules, develop newinstitutions anddesign newstrategies toattract foreign investment.
Forexample: Cameroon obtained anassessment oftheinvestment environment, which ledtothe
development ofanewlegal framework forestablishment ofinstitutions topromote investment;
Côted'Ivoire received anassessment ofthebarriers toestablishing investment projects, along with
proposals toremove these barriers inthecontext ofestablishing aninformation centre forinvestors;
Equatorial Guinea andGuinea Bissau requested thatFIAS provide assistance todesign alegalframework
toattract foreign investment; Ghana hasreceived advice ondraftforeign investment laws, investment
promotion agency organization andpromotion strategy. A"road map" toremove administrative barriers
tonewbusiness establishment wasdeveloped; Madagascar hasreceived adiagnostic assessment of
itsinvestment climate. Thiswasfollowed bydevelopment ofalegal framework forinvestment in
Madagascar anditsindustrial freezones, aswellasastrategy topromote investment; assistance in
Malawi wasprovided toestablish theMalawi Investment Promotion Agency andtoprepare apromotion
strategy, afterthelegalandinstitutional framework wasinplace; Mozambique wasprovided guidance
onanewsetofinvestment laws, thelegalframework fordebt-equity conversions andtheinstitutional
organization forpromotion; Zimbabwe benefited fromFIAS assistance indeveloping anappropriate
policy framework forinvestment andstrengthening theZimbabwe Investment Centre topromote
investment andservice investors.WT/WGTI/W/5
Page18
Foreigndirectinvestment(FDI)isplayinganincreasinglyimportantroleinAsiaandthePacific.
InChina, forexample, themostrecent project aimed ataccelerating private infrastructure investments
byeliminating bottlenecks inthepolicy andtheregulatory framework. InIndonesia, FIAS hasprovided
advice toovercome equity andsectoral restrictions onFDI. InthePhilippines, FIAS designed adata
collection system torecord FDIinflows andhelped theGovernment todesign apilotprogramme for
increasingbusinesslinkages.InBangladesh,FIASimplementedalong-term,technicalassistanceproject
forreorganizing thenational investment promotion authority.
FIAS hasalsohelped theformerly centrally-planned countries oftheregion tocarry outtheir
economicliberalizationprogrammesbycreatingthegeneralpolicyandinstitutionalframeworksnecessary
toattract FDI. FIAS hasprovided assistance inthisregard totheGovernments ofVietnam, LaoPDR,
Cambodia andMongolia.
FIAS initiated itswork inCentral andEastern Europe withanadvisory project forthe
Government offormer Yugoslavia in1989. Since then, FIAS worked inBulgaria, Croatia,
Czechoslovakia,Hungary,Poland,Romania,andSlovakia.Followingthebreak-upoftheSovietUnion,
FIAS provided advisory assistance toEstonia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Russia and
Ukraine. Inmany ofthese countries, FIAS conducted multiple advisory projects.
InLatin America andtheCaribbean ,initial assistance frequently focuses onmodernizing laws
andinstitutions, followed bystrategic planning forinvestment promotion. Assistance hasbeenprovided
toChile,CostaRica,Mexico,Paraguay,Venezuela,Argentina,Bahamas,Bolivia,Ecuador,ElSalvador,
Guyana, Honduras, Peru, Dominican Republic, Trinidad &Tobago, andUruguay.WT/WGTI/W/5
Page19
International Centre forSettlement ofInvestment Disputes (ICSID)
TheInternational Centre forSettlement ofInvestment Disputes (ICSID ortheCentre) isthe
World Bank Group organization thatprovides facilities fortheconciliation andarbitration ofdisputes
between governments andforeign investors.
Liketheother organizations intheWorld Bank Group, ICSID isestablished byamultilateral
treaty. InICSID ’scase,thisisthe1965Convention ontheSettlement ofInvestment Disputes between
States andNationals ofOther States, commonly called the"ICSID Convention". Todate,126countries
havesigned andratified theICSID Convention tobecome Contracting States.
UndertheConvention,ICSIDprovidesfacilitiesfortheconciliationandarbitrationofinvestment
disputes between Contracting States andindividuals andcompanies thatqualify asnationals ofother
Contracting States. ICSID doesnotitself conciliate orarbitrate suchdisputes. Thisisthetaskof
conciliation commissions andarbitral tribunals which areconstituted foreachdispute, normally through
appointments bytheparties.
ICSID conciliators havethedutyofclarifying theissues indispute between theparties and
endeavouring tobring about agreement between themonmutually acceptable terms. Theconciliators
mayrecommend terms ofsettlement totheparties whomustgiveanysuchrecommendation theirmost
serious consideration. Iftheparties nevertheless failtoreach anagreement, theconciliators mustclose
theproceeding withareport noting thefailure.
ICSID arbitrators mustincontrast decide thedispute before theminaccordance withsuchrules
oflawasmayhavebeenagreed bytheparties or,intheabsence ofsuchagreement, inaccordance
withthelawoftheStateparty tothedispute andsuchrulesofinternational lawasmaybeapplicable.
TheICSID Convention provides thattheaward ofthearbitrators shallbebinding ontheparties and
notsubject toanyappeal ortoanyother remedy except certain remedies provided bytheConvention
itself. Moreover, eachContracting State, whether ornotaparty tothedispute, isrequired bythe
Convention toenforce thepecuniary obligations imposed bysuchanaward asifitwereafinaljudgement
oftheState’scourts.
TheroleoftheICSID secretariat under thesystem oftheConvention includes screening requests
forconciliation orarbitration toavoid theinstitution ofproceedings incases thataremanifestly outside
oftheCentre ’sjurisdiction. Thesecretariat alsosupervises theconstitution oftheconciliation
commissions andarbitral tribunals, toensure compliance withtheprovisions oftheICSID Convention
andRules inthisregard. After aconciliation orarbitral tribunal isconstituted, theSecretary-General
designates oneoftheICSID lawyers toactassecretary ofthecommission ortribunal.
Inaddition toitsfacilities forconciliation andarbitration under theICSID Convention, the
Centre hassince 1978 hadasetofso-called Additional Facility Rules under which itisauthorized
toadminister certain types ofproceedings between States andforeign nationals thatfalloutside the
scope oftheConvention. These include conciliation andarbitration proceedings forthesettlement
ofinvestment disputes where oneoftheparties isnotaContracting Stateoranational ofsuchaState.
Another activity ofICSID inthefield ofthesettlement ofdisputes hasconsisted inthe
Secretary-General ofICSID undertaking toactastheappointing authority ofarbitrators foradhoc
(thatis,non-institutional) arbitrations. Thishasinparticular beendoneinthecontext ofagreements
providing forarbitration under theArbitration Rules oftheUNCommission onInternational Trade
Law, orUNCITRAL, which arespecially designed foradhocproceedings.WT/WGTI/W/5
Page20
Since ICSID ’sinception, 44disputes between governments andforeign investors havebeen
registered bytheCentre. Three ofthese wereconciliation cases andtheremaining 41werearbitration
cases. Twoofthearbitration cases werebrought under theAdditional Facility Rules andtheremaining
39arbitration cases andeachoftheconciliation cases were brought under theICSID Convention.
TheSecretary-General hasalsobeenasked onanumber ofoccasions toappoint arbitrators inadhoc
proceedings. About twothirds ofthecases brought totheCentre havebeeninitiated inthelastten
years alone. Theincrease inthecase-load isinlarge measure explained bytherecent proliferation
ofinvestment treaties providing forrecourse toICSID 'sdispute settlement facilities fortheresolution
ofinvestment disputes under thetreaties. There arenowsome 900bilateral investment treaties with
suchreferences toICSID andseveral multilateral treaties, including theNAFTA, theEnergy Charter
Treaty andaMERCOSUR investment protocol. InFY97, therehavebeen15arbitration cases before
ICSID, 12ofwhich arestillpending. These haveinvolved disputes between investors from eight
different countries andthegovernments of12other countries (seetheattached listofrecent cases).
ICSID alsocarries outresearch, publishing andadvisory activities inthefields ofarbitration
andforeign investment law.Itspublications include thesemi-annual ICSID Review -Foreign Investment
LawJournal,andtwomulti-volumeloose-leafcollectionsofInvestmentLawsoftheWorldandInvestment
Treaties .ICSID staffhavealsopublished abooktitled Bilateral Investment Treaties (1995) and,most
recently, acomprehensive listofsuchtreaties concluded between 1959 and1996.
Asregards advisory work, ICSID staffareregularly called upon byother Bank Group units
andbygovernments toreview andcomment ondraftarbitration andinvestment laws, toreview the
dispute settlement clauses ofdraftinvestment treaties andcontracts.
ICSID regularly co-sponsors events oninternational arbitration withother institutions active
inthisfield. On15November 1996, ICSID co-sponsored, withtheAmerican Arbitration Association
andtheInternational Chamber ofCommerce (ICC) International Court ofArbitration, theirthirteenth
jointcolloquium oninternational arbitration, which addressed thetopicof"theroleofparty autonomy
ininternational arbitration", which tookplace inNew York, NY. On6-7March 1997, ICSID
co-sponsored, withtheAssociation ofArbitrators (Southern Africa), theICCInternational Court of
Arbitration andtheLondon Court ofInternational Arbitration, aconference ontheresolution of
international tradeandinvestment disputes inAfrica, which tookplace inJohannesburg, South Africa.
Bothconferences included addresses byICSID 'sSecretary-General.
Investment Disputes Registered bytheInternational Centre forSettlement ofInvestment Disputes:
January 1993 -April 1997
American Manufacturing &Trading, Inc.v.Republic ofZaire
(Case No.ARB/93/1)
Subject Matter
Manufacturing andtrading enterprise
DateRegistered
2February 1993
DateofConstitution ofTribunal
4August 1993WT/WGTI/W/5
Page21
Composition ofTribunal
President: Sompong SUCHARITKUL (Thai)
Arbitrators: Heribert GOLSONG (German)
Kéba MBAYE (Senegalese)
Status oftheProceeding
Pending (proceeding declared closed on12November 1996).
Phillippe Gruslin v.Government ofMalaysia (Case No.ARB/94/1)
Subject Matter
Construction enterprise
DateRegistered
13January 1994
DateofConstitution ofTribunal
31May1994
Composition ofTribunal
SoleArbitrator: Sompong SUCHARITKUL (Thai)
Status oftheProceeding
Settlement agreed bytheparties andproceeding discontinued attheirrequest. (Order taking
noteofthediscontinuance issued bytheTribunal on24April 1996pursuant toArbitration Rule43(1).
SEDITEX Engineering Beratungsgesellschaft fürdieTextilindustrie m.b.H. v.Government of
Madagascar (Case No.CONC/94/1)
Subject Matter
Textile enterprise
DateRegistered
13June1994
DateofConstitution ofCommission
23September 1994WT/WGTI/W/5
Page22
Composition ofCommission
President: André FAURES (Belgian)
Conciliators: Dominique CARREAU (French)
Raymond RANJEVA (Malagasy)
Status oftheProceeding
Report oftheCommission issued on19July1996.
Tradex Hellas S.A.v.Republic ofAlbania (Case no.ARB/94/2)
Subject Matter
Agricultural enterprise
DateRegistered
8December 1994
DateofConstitution ofTribunal
3January 1996
Composition ofTribunal
President: Karl-Heinz BÖCKSTIEGEL (German)
Arbitrators: FredF.FIELDING (U.S)
Andrea GIARDINA (Italian)
Status oftheProceeding
Pending (hearing onjurisdictional objections heldon10September 1996).
Leaf Tobacco A.Michaelides S.A.andGreek-Albanian Leaf Tobacco &Co.S.A.v.Republic
ofAlbania (Case no.ARB/95/1)
Subject Matter
Tobacco manufacturing andwarehousing
DateRegistered
27April 1995
Status oftheProceeding
Pending (Tribunal notyetconstituted).WT/WGTI/W/5
Page23
Cable Television ofNevis, Ltd.andCable Television ofNevis Holdings, Ltd.v.Federation of
St.Kitts andNevis (Case No.ARB/95/2)
Subject Matter
Cable television franchise
DateRegistered
14November 1995
DateofConstitution ofTribunal
16February 1996
Composition ofTribunal
President: Woodbine A.DAVIS (Barbadian)
Arbitrators: Arthur A.MAYNARD (Barbadian)
RexMcKAY (Guyanese)
Status oftheProceeding
Pending (hearing onjurisdictional objections heldon1and2July1996).
Antoine Goetz andothers v.Republic ofBurundi (Case no.ARB/95/3)
Subject Matter
Mining enterprise
DateRegistered
18December 1995
DateofConstitution ofTribunal
26June1996
Composition ofTribunal
President: Prosper WEIL (French)
Arbitrators: Mohammed BEDJAOUI (Algerian)
Jean-Denis BREDIN (French)
Status oftheProceeding
Pending (first session oftheTribunal tobeheldon4December 1996).WT/WGTI/W/5
Page24
Compañia delDesarrollo deSanta Elena S.A.v.Government ofCosta Rica(Case No.ARB/96/1)
Subject Matter
Valuation oflandholding
DateRegistered
22March 1996
Status oftheProceeding
Pending (Tribunal notyetconstituted).
Misima Mines Pty.Ltd.v.Independent State ofPapua NewGuinea (Case No.ARB/96/2)
Subject Matter
Mining concession agreement
DateRegistered
29April 1996
Status oftheProceeding
Pending (Tribunal notyetconstituted).
Fedax N.V. v.Republic ofVenezuela (Case No.ARB/96/3)
Subject Matter
Debt instruments
DateRegistered
26June1996
DateofConstitution ofTribunal
27November 1996
Composition ofTribunal
President: Francisco ORREGO VICUÑA (Chilean)
Arbitrators: Meir HETH (Israeli)
Robert B.OWEN (US)WT/WGTI/W/5
Page25
Status oftheProceeding
Pending (first session oftheTribunal tobeheldwithin twomonths from thedateofthe
constitution oftheTribunal).
Metaclad Corporation v.United Mexican States (Case ARB (AF)/97/1)
Subject Matter
Waste disposal enterprise
DateRegistered
13January 1997
Status oftheProceeding
Pending (Tribunal notyetconstituted).
Société d’Investigation deRecherche etd’Exploitation Minière (SIREXM) v.Republic ofBurkina
Faso (Case ARB/97/1)
Subject Matter
Gold mining operation
DateRegistered
27January 1997
Status oftheProceeding
Pending (Tribunal notyetconstituted).
Société Kufpec (Congo) Limited v.Republic ofCongo (Case ARB/97/2)
Subject Matter
Petroleum exploration andexploitation
DateRegistered
29January 1997
Status oftheProceeding
Pending (Tribunal notyetconstituted).WT/WGTI/W/5
Page26
Compañía deAguas delAconquija S.A.andCompagnie Générale desEaux (CGE) v.Argentine
Republic (Case No.ARB/97/3)
Subject Matter
Water andsewer services concession agreement
DateRegistered
19February 1997
Status oftheProceeding
Pending (Tribunal notyetconstituted).
Robert Azinian andothers v.United Mexican States (ARB (AF)/97/2)
Subject Matter
Waste disposal enterprise
DateRegistered
24March 1997
Status oftheProceeding
Pending (Tribunal notyetconstituted).
Czechoslovenska Obchodni Banka, A.S.v.Slovak Republic (ICSID Case No.ARB/97/4).
Subject Matter
Financing
DateRegistered
25April 1997
Status oftheProceeding
Pending (Tribunal notyetconstituted).WT/WGTI/W/5
Page27
World Bank Investment Guarantee Program
InSeptember 1994, theWorld Bank’sExecutive Directors revitalized theBank’sguarantee
authority byendorsing apolicy tomake guarantees astandard toolinBankoperations. Until thattime,
Bank guarantees, which areprovided forintheBank’sArticles ofAgreement, hadbeenusedonly
sparingly.
World Bank guarantees areprovided toprivate lenders andcansupport either public orprivate
sector projects. Relevant projects areoften financed ona"project finance" basis, which means that
lenders lookprimarily tothecashflows andassets oftheproject forrepayment, rather thantothe
sponsor ’sbalance sheet. Such projects, forexample ininfrastructure, typically require considerable
funding andlongmaturities tomatch theexpected lifeoftheassets. Inaddition, theyfacenumerous
political andregulatory risksbecause aproject ’screditworthiness isoftenbased onasetoflegalcontracts
thatinvolve governments andtheirentities.
Bank guarantees canbeextended forspecified risks (partial riskguarantee )orforallrisks
during aspecified period ofthefinancing term(partial credit guarantee ).Where thegovernment has
moved from owner oroperator toregulator orpurchaser ofaservice, partial riskguarantees canbe
especially useful inensuring thatthegovernment remains committed totheobligations itmakes under
these circumstances. Attracting private lenders toinvestment projects isoften difficult because a
government ’sadherence tocontractual obligations isseenbyfinanciers asasovereign (orpolitical)
risk,which many private lenders consider unacceptable. Thus thebacking ofthese obligations bya
creditworthy third-party financial institution -suchastheWorld Bank -isoften critical forattracting
debtandequity investment.
Although theuseofguarantees isexpanding, theyremain asmall portion oftheBank’s
operations. AsofJune 1996, outstanding guarantees totalled $1.54 billion, while loans totalled
$155 billion. Thepipeline ofguarantee operations hasexpanded significantly overthepasttwoyears,
however, andcurrently includes about 50projects, primarily ininfrastructure sectors suchaspower
generation, oilandgaspipelines, tollroads, andwater supply andtreatment facilities. TheBank’s
guarantee doesnotcover equity investment, andallguarantees todatehavebeenaccompanied byBank
investment loans.WT/WGTI/W/5
Page28
Recent World Bank Guarantees, 1994-97
(millions ofUSdollars)
Dateof
financial
closureCountry Project Instrument Guaranteed
amountTotal
project
cost
May1994 China Yangzhou
Power$120 syndicated
loan$59 1,100
June1994 Philippines Leyte-Luzon
Power$100 Euro/144a
bond$100 1,300
Jan.1995 Pakistan HubPower $360 syndicated
loan$240 1,800
Mar. 1995 China Zhejiang
Power$150 syndicated
loan$64 1,600
Sept. 1995 Jordan Jordan
Telecom$50
Euro/domestic
bond$50 228
Sept. 1995 China Ertan II
Power$150 syndicated
loan$50 2,900
May1996 Pakistan UchPower $75syndicated
loan$75 630
Feb.1997 Lebanon Power Sector
Restructuring$100 Euro/144a
bond$100 486
Total $1.1billion $738 10,044WT/WGTI/W/5
Page29
Initiative onPrivate Investment inInfrastructure
TheWorld Bank hascurrently under development aprogramme tofoster increased private
investmentininfrastructureindevelopingcountries.Extensivestudyoftheconstraintstosuchinvestment
hassuggested thefollowing areas inwhich Bank Group action could facilitate andpromote private
involvement ininfrastructure:
- facilitating policy andregulatory reform;
- assisting project development;
- strengthening domestic capital markets;
- reducing project andfinancial risk;
- clarifying country intentions andpotential Bank Group support;
- improving knowledge management.
AshasbeenthecasewithBankGroup initiatives inthepast,thisprogramme willlikely involve
boththeapplication ofexisting financial products andthedevelopment ofnewones. Theprogramme
willlikely include extensive support toclient countries onthedesign andimplementation ofpolicy
andregulatory frameworks forprivate infrastructure -theBank Group isparticularly wellplaced to
provide advice oncross-sectoral matters andemerging lessons andbestpractice from international
experience.