Multilateral Investment Guarantee Agency
World Bank GroupMIGA unveils

simpler guarantee

contract‘‘

The biggest
difference inthe new
contract is its
simplified
language.
It’s easierto understandnow.”

MIGA NEWS|adds Peter Jones, manager for Operational Strategy in MIGA’s
Underwriting Department. The document also benefited frominvestor and insurer feedback, he says.
Another bonus is the simplification of terms. Coverage
elections used to be considered complex by investors, but
the new contract has done away with the different categorizations of guarantee amount, such as maximum aggregate
liability, maximum amount of guarantee, current amount ofguarantee, and standby amount of guarantee. Now there isjust one amount of guarantee coverage, plus a standby option
for amounts of investments that are committed but not yet
disbursed.
Waiting periods for payment of claims have also been
reduced for all of the coverages offered: for expropriation
claims, it has been reduced from 365 days to 180 days; fortransfer restriction, from 90 to 60 days; for war and civil disturbance, from 365 to 180; and for breach of contract claims,
from 365 to 180 days. However, contracts retain
the flexibility for waiting periods to be increased
depending on the risk profile of each project.
In addition, claims adjudication periods are
Fasternow shorter. MIGA will let investors know whether
turnarounda claim will be paid within 30 days. Investors canalso now file a claim during the waiting period,
expected
MIGA officially launched its new
although the claim becomes final only when allcontract of guarantee in December
required evidence is submitted.
2003, responding to client requests
The new language clearly spells out what
for a simpler and more efficientevidence the guarantee holder needs to provide in
document. The new contract will be used for all
the case of a dispute, as well as what is expected after a claim
definitive guarantee applications received beginninghas been filed and approved.
January 1, 2004.
“We modeled the simplified contract on our inherent“We changed the contract because some clistrength—that is, our ability to prevent investment disputes
ents were finding it hard to interpret,” says Srilal
from becoming claims,” says Perera. “This strength derives
Perera, chief counsel, who oversaw the drafting offrom the fact that our shareholders include most countries in
the new contract. “The old contract was the samethe world, which enables us to provide an umbrella of deterone used since the agency’s inception in 1988. It was
rence against government actions that could disrupt investa complex document that required a lot of patiencements. We are also able to influence the resolution of potential
to understand the scope of coverage and the consedisputes. At the same time, the new contract has strengthened
quences of the coverages. There were an inordinate
our guarantee holders’ obligations, requiring them to give
number of cross-references, which resulted in mulinformation early on about the possibility of a potential loss.
tiple complications.”
Tightening this obligation gives us the information we need to
The biggest difference in the new contract is its
help prevent a claim.”
simplified language. “It’s easier to understand now,”
says Perera. “The need for interpretation and crossreferencing will be minimized.” Because it’s simpler,
MIGA is expecting a shorter turnaround time for
IN THIS ISSUE
executing policies, and in general, less headaches for
VOL 11 | NO 4 | COVERING OCT NOV DEC 2003
clients. The contract does not depart in any way from
MIGA’s New Contract Backed by Upgraded Costing/Pricing
the agency’s convention or operational regulations
Methodology | 2
requirements.
MIGA Managers Meet with Sri Lankan Leaders | 3“The contract was influenced, in the early
MIGA and Austrian Government to Launch Investor
design stage, by current capital market operations,
Outreach Facility | 6
as well as project and structured finance deals,”
Project Highlights | 7

Co v e r i n g O C T N O V D E C 2 0 0 3

page 1MIGA’S NEW CONTRACT
Backed by Upgraded Costing/Pricing
Methodology

MIGA launched a new costing/pricing methodology thatcomplements the agency’s
new guarantee contract (seerelated story on p. 1). The
methodology is based on
quantitative analyses of political risk claims.

YukikoOmura

named
new headof MIGA

Pricing of political risk insurance has long
been considered an art rather than a science. However, MIGA conducted extensive
analyses to establish a meaningful statistical basis to support its premium levels,
quantifying the probability of claims basedon various industry data, such as Berne
Union statistics. Working with a specialist consulting ﬁrm, ERisk, MIGA also developed a framework to differentiate theprobability between high-risk and low-riskcountries. The analyses provided MIGA
with quantiﬁed views on risk correlations
among countries or regions, and a term
structure of political risk over time.
As a result of this work, MIGA has beenable to introduce a systematic costing/pricing methodology that is more in line withthe general pricing framework for insurance. MIGA’s ﬁnal pricing, however, continues to be based on an integrated viewof project-speciﬁc risk, considering factors
such as location, structure, ownership, andvisibility of a project. This assessment is
supported by MIGA’s own team of country risk analysts, who draw on World Bank
Group’s information resources.

MIGA has also developed an implementation process that aims to balance
the beneﬁt of the quantitative methodology with a client-focused efﬁciency. For
example, for small-sized transactions, lessthan $5 million, MIGA offers a convenient
single premium rate that covers three mainrisks combined (transfer restriction, expropriation, and war and civil disturbance).
MIGA has also decided to apply the samerate for equity and non-shareholder loans.
For further simpliﬁcation, MIGA no longer
uses the distinction between “current” and“standby” rates for loans that have alreadybeen disbursed.
“I strongly hope that the new pricing
framework will signiﬁcantly help MIGA
better serve its clients’ risk mitigationneeds, and will thus facilitate more investment ﬂows into emerging economies,” said
Motomichi Ikawa, Executive Vice Presidentof MIGA.
Further information on the methodology isavailable on www.miga.org.

MIGA is set to see a changing of the guard when Yukiko Omura, selected as the agency’s new Executive Vice President, assumes her new rolein May 2004.
Omura joins MIGA from her most recent post as CEO and Executive Director of the AIDS
Prevention Fund, a London-based company that aims to raise finances for worldwide HIV/AIDS prevention. Omura will officially assume her responsibilities this Spring.
“It is with great pleasure that I welcome the appointment of Ms. Omura. She brings
to the table a unique combination of private sector experience, as well as a commitment
to development issues, which will no doubt serve MIGA well,” said World Bank President
James D. Wolfensohn. “At the same time, I would like to express my deep appreciation to thecurrent head of MIGA, Motomichi Ikawa, for his dedicated service to the agency over thelast five years.”
Omura brings more than 20 years of international experience in the financial services
sector. Prior to her founding of the AIDS Prevention Fund, she was Managing Director andHead of Global Debt for Japan with Dresdner, and served as Managing Director and Headof Global Fixed Income and Derivatives, Japan, with UBS/LTCB Warburg.
Omura has extensive knowledge of emerging markets, with many years of experiencein areas such as mergers and acquisitions, derivatives and emerging market sales, trading,and research at JP Morgan.
In addition, she served as Head of Credit Products and Emerging Markets, Asia, with
Lehman Brothers. She began her career as a project economist with the Inter-American
Development Bank, after receiving her education predominantly in Geneva, London, andBoston.

MIGA NEWS|Co v e r i n g O C T NOV DEC 2003

page 2MIGA Managers
Meet with Sri Lankan Leaders
TALKS FOCUS ON INCREASING FOREIGN INVESTMENT

PHOTO | Motomichi Ikawa, Executive
Vice President of MIGA“MIGA has a key role to play in helping foreign investors take advantage ofthe many investment opportunities in Sri
Lanka,” MIGA’s Executive Vice President,
Motomichi Ikawa, said during a press
conference in Colombo in October 2003.
The event was one of a host of activities undertaken by Ikawa and a group of
MIGA delegates during a three-day sojournin the country. The visit was spurred bya bilateral meeting between Ikawa andPrime Minister Ranil Wickremasinghe
during the Tokyo Donor Conference on
Sri Lanka held in June 2003. In addition to meeting with the prime minister,
MIGA representatives also held talks with
A.S. Jayawardena, Governor of the Central
Bank, Ravi Karunanayake, Minister forCommerce and Consumer Affairs, andhigh-level officials from the Treasury,

Ministry of Enterprise, and Board of
Investment. The delegates also met withprivate sector representatives.
In addition, Ikawa gave a keynote
address on the role of the private sector in infrastructure development at the
Chamber of Commerce Convention. “SriLanka no doubt holds tremendous potential for business and investment,” he said,“not merely because of the island’s strategic location, but also because of its highly
educated and intelligent pool of humanresources and the ability of the business
community to quickly adapt to difficult
situations. Yet it has not been immune to
the terrible ravages of war and civil disturbance.”
Conflict-afflicted economies needhigh levels of investment. Battered infrastructure needs to be rehabilitated. Rundown public utilities have to be refurbishedand modernized to meet the demands ofa modern economy. Employment has tobe generated. “In all these areas, foreign
direct investment and the private sector will have to play a crucial role. But toattract foreign investment in a conflictaffected environment is undoubtedly adifficult task,” said Ikawa.
It is precisely for such an environment that MIGA was created. As a member of the World Bank Group, MIGA
promotes foreign direct investment into
emerging economies by offering politicalrisk insurance (guarantees) to investors
and lenders, and by helping developing
countries attract and retain private investment through its technical assistance anddispute mediation programs.

Since its inception, MIGA has supported 66 projects with guarantees worth
nearly $1.7 billion in 18 conflict-affected
countries, representing 13 percent of theagency’s gross portfolio.
Sri Lanka is one of the original shareholders of the agency. MIGA’s outstanding
portfolio for the country consists of one
contract of guarantee in the infrastructure
sector worth $1.68 million. This project isestimated to have facilitated $71.1 million
in additional foreign direct investment.
MIGA also mediates ongoing investment disputes between host countries andinvestors, thereby enhancing the investment climates of its member countries. Sri
Lanka was a recent beneficiary of MIGA’s
mediation services.
Ikawa added that MIGA looks forward
to working closely with institutions likethe Board of Investment, the Sri Lanka
Export Credit Insurance Corporation,and the Ceylon Chamber of Commerce,
to build their capacity to share crucial
information on investment opportunities
with foreign investors. “Partnerships are
critical for the recovery process,” he said.
MIGA has received numerous applications from investors interested in procuring MIGA guarantees for projects in
Sri Lanka.
“We stand ready to carry out our
responsibilities, not only to assist in theeconomic recovery of the country, but to
ultimately bring hope and prosperity to
Sri Lanka’s people who have been traumatized by decades of civil war.”

Iran Joins MIGAThe Islamic Republic of Iranbecame the newest memberof the Multilateral Investment
Guarantee Agency (MIGA) on
December 17, 2003, with its subscription to the agency’s capitalbase. This brings the number of
MIGA members to 164.

With the membership, foreign companies seeking to invest in Iran are now eligible toreceive MIGA’s guarantee coverage, which protects investments against the risks of transfer
restriction, expropriation, breach of contract, and war and civil disturbance (including terrorism). Iranian investors going into other developing countries may also receive coverage.
Membership also makes the country eligible to receive MIGA’s technical assistance services
to help it attract more foreign direct investment.
“MIGA’s support for investment in Iran can help address two serious challenges facedby the country: the prevalence of unemployment and poverty,” says MIGA’s Executive Vice
President, Motomichi Ikawa. “By guaranteeing projects going into and out of Iran, MIGA
will be supporting the country’s fledgling private sector and stimulating regional economic
growth.”The agency has received a number of inquiries from investors interested in doing business in Iran, particularly in the infrastructure, services, and finance sectors.
“MIGA can bridge the gap between investors’ concerns and a country’s desire to attract
good investment to help jumpstart the economy,” says Ikawa. “We are looking forward to
supporting private sector development in Iran and the region.”

MIGA NEWS

page 3|Co v e r i n g O C T N O V D E C 2 0 0 3

MIGA in China:

POLITICAL RISK INSURANCE HELPS INVESTORS P

THERE’S NO DOUBT ABOUT IT.
CHINA IS HOT. Following morethan two decades of near doubledigit growth, China’s total valueof goods and services is growing
at about 7 percent a year, driven
by increased domestic demandand its accession into the World
Trade Organization (WTO).

Lessons learned from the turbulent late
1990s have helped focus China’s efforts on
accelerating reforms of the state enterpriseand corporate sectors. While it is too early
to evaluate how successful China’s entry
into the WTO has been, the FDI environment is generally perceived as positive.
So positive in fact, that for the first time
ever, China has knocked the United States
off its perch as the world’s number one
investment destination, according to AT
Kearney’s FDI Confidence Index.
In addition to its new WTO status,
investors these days are drawn to China’s
growing middle-class of consumers, withhigher disposable incomes and increasing purchasing power, and the country’s
strong supply of relatively low-cost, highoutput labor.

MIGA NEWS

Despite these draws, investing in adeveloping country can be a daunting
experience. In addition to commercial
risks faced by all projects, doing businessin an emerging economy can bring added
risks, real or perceived, of an undesirable political event that many investors
are simply not prepared to deal with on
their own. Political risk insurance is an
important instrument for equity investors
and financiers concerned about mitigating
noncommercial risks.
China was one of the earliest members of MIGA, joining soon after theagency’s founding. Since then, MIGA has
actively supported foreign direct investment into the country, providing a totalof $333 million in investment guarantees.
As of December 2003, MIGA’s portfolio
consisted of 14 contracts, with gross exposure of $150 million, for projects in the
manufacturing, power, and water sectors.
China is currently in the top 15 countries
in terms of MIGA’s outstanding guarantee
exposure.

|

Co v e r i n g O C T NOV DEC 2003

page 4

PUSH PROJECTS AHEAD

MIGA’s involvement in China has
been evolutionary. When the agency firststarted insuring projects there, manufacturing was the sector in demand. But
there’s a perception now that manufacturing no longer presents the kinds ofnoncommercial risks that investors areconcerned about. Rather, it is the larger
projects, such as infrastructure, that provide opportunities for foreign investment,
but which also make investors wary ofrisks. Given that infrastructure projects
often involve local governments with longterm concessions, and therefore add whatsome perceive to be a lesser-known element to the mix, investors in this area
typically seek out political risk insurance.
MIGA is no stranger to these types ofrisks, as reflected in its involvement in the
country’s power sector. More than three
years ago, provincial government officials
in China unilaterally reduced the prices it
paid certain foreign electric power producers. MIGA had issued guarantees to one of
the affected investors, providing protection
against the risks of transfer restriction,
expropriation, and war and civil disturbance. When the investor alerted MIGA
to its difficulties, the agency stepped in.
Ongoing negotiations with the investor
and government representatives eventually yielded an agreement to resolve theproblem and avoid a claim by the investor.
This dispute was just one of some twodozen that erupted in China’s power sector
following the 1999 price change.
As China gears up for the 2008
Olympics in Beijing, there’s a renewed
focus on investment in infrastructure,including in the water, power, and transport sectors. In the past six months alone,
MIGA has issued guarantees for two waterprojects, in Deqing and Pudong, with afew more in the pipeline. One project,
for which MIGA provided a $70 million
guarantee, involves the treatment, distribution, and sale of water, maintenanceand management of facilities, and watersupply services in the Pudong district ofShanghai, home to more than 1.7 million residents. The guarantee covers theinvestment against the risk of expropriation for a period of up to 15 years.
MIGA is also starting to see more
Chinese investments going into Southeast
Asia—particularly Indonesia, Thailand,
and Vietnam—with investors expressing

interest in MIGA’s coverage. The growinginterest stems in part from a partnership
struck in 2001 by MIGA and Sinosure,
China’s official export credit insurance
agency (representing a merger of theexport credit insurance departments ofboth the People’s Insurance Company ofChina and Chinese Eximbank). The partnership agreement calls for Sinosure and
MIGA to increase cooperation and, in particular, to support Chinese investment intodeveloping countries. MIGA is working
closely with Sinosure—co-hosting investment insurance seminars in Beijing, forexample—and has provided training to
its staff. While primarily an export credit
insurer, Sinosure is being drawn increasingly into the field of investment insurance,
and is expected to work more closely with
MIGA in the coming year on coinsurance
and reinsurance of investments.
In addition to its guarantee and dispute
mediation services, MIGA also provides
technical assistance to help the agency’s
developing member countries define andimplement strategies to catalyze foreign
direct investment.
Among these activities is a regional
benchmarking exercise conducted by MIGA
in 2003, with funding from the Japanese
government. The study, “Benchmarking
FDI Competitiveness in Asia,” compares
operating costs and conditions in China,
Indonesia, Malaysia, the Philippines,
Thailand, and Vietnam for electronics andinformation services, industries that are
regionally strong in FDI.
The study finds that China is a regional
powerhouse in terms of size, strength, andanticipated rapid growth of its domestic
economy, as well as consumer purchasing power. The country boasts the bestdeveloped electronics supply base and theleast expensive land and building facilities among the countries surveyed. Overalllabor costs rank among the lowest, withthe workforce considered the most productive—benefits that apply to both sectors analyzed. The study also reveals that
China’s competitive telecommunications
costs and stable government and society
are advantages for foreign investment in
information services.
Among the weaknesses identified in
the electronics sector are labor and management issues. Employees may lack recognition of quality issues, which requires

MIGA NEWS

page 5|

Co v e r i n g O C T N O V D E C 2 0 0 3

constant supervision, while labor regulations, which vary widely by location, can beonerous for the employer. Perceived differences in business culture—mindset, loyalty to company, and management philosophies—tend to make management moredifficult. Most of the weaknesses in theinformation services sector, which includes,for example, call centers, also relate to personnel, particularly salaries, language andmanagement skills. Despite these drawbacks, the study finds ample evidence ofinvestment opportunity in both sectors. To
find out more, visit www.ipanet.net/snapshotasia.
The benchmarking study has spawned
interest in a number of quarters, including
the International Finance Corporation's
China Project Development Facility (CPDF)
which recently asked MIGA to help the
Sichuan Provincial Investment Promotion
Bureau (SPIPB) conduct a similar investigation of the Sichuan province. In 2004,
MIGA is also embarking on a series ofquarterly capacity-building workshops,
also in coordination with the CPDF and
SPIPB, to reach out to other promotion
agencies throughout the province. The
first workshop, on the general tenets ofinvestment promotion, will take place inFebruary 2004.
China is also well-represented in
MIGA’s online information services.
Currently, more than 250 China-based individuals and organizations are members of
IPAnet—www.ipanet.net—an investment
information clearinghouse established by
MIGA to promote information exchange,business development, and investment
opportunities worldwide.
For more information on MIGA, please
visit www.miga.org, or contact MIGA’s
Corporate Relations Officer, Federica
Dal Bono at t. 202.473.9292 or email
fdalbono@worldbank.org.

A version of this article will appear in the
March-April 2004 issue of the China Business
Review (www.chinabusinessreview.com)

MIGA and Austrian Government

to Launch Investor Outreach Facility for Southeastern Europe

PHOTO | Tessie San Martin, Directorof MIGA's Investment Marketing
Services, with Thomas Wieser, Director,
Ministry of Finance, Austria, at agreement signing.

The Multilateral Investment Guarantee
Agency (MIGA) and the Austrian government recently signed an agreement tojointly establish a new facility to help theWestern Balkans reach out to European
investors. The facility, to be based within the Öesterreichische Kontrollbank in
Vienna, is set to launch in April 2004.
The facility will seek to strengthen
the capability of the beneficiary countries-Albania, Bosnia and Herzegovina,
Croatia, FYR Macedonia, and Serbia andMontenegro—to attract inward investment from across Western Europe. The
goal is to increase investors’ awareness of
the region’s investment potential, encourage investors to undertake site visits to

explore possible investments, and ultimately to support actual investments in
the region. A benchmarking study currently underway will guide the program’soutreach activities.
“The countries of Southeastern Europe
are implementing far-reaching reforms
to improve their investment climates andreduce the administrative and regulatory barriers that can put off investors,”says Tessie San Martin, head of investment marketing services for MIGA. “These
improvements have opened up many areasof promise for investment in the region.
The challenge we want to address, incollaboration with the Austrian government, is to make sure these improvements
are communicated well to investors,
and that investors receive the support
they need to make well-founded investment decisions and implement themsuccessfully.”
For Karl-Heinz Grasser, Austria’s
Minister of Finance, the development ofSoutheastern Europe depends highly on
the progress made by the private sector
in these countries. “Austria very much
welcomes the support of the region by
the World Bank Group, including MIGA,”
says Grasser.
The initiative will start out as a twoand a half-year pilot program, supported
by an initial contribution of $900,000 madeavailable to MIGA by the Austrian government under a grant agreement. MIGA will
support the initiative with a significant
in-kind contribution. It is expected that
additional donors will join the initiative

and the pilot program will be expanded
to cover additional countries and a wider
range of sectors and industries.
Activities planned under the project
include preparatory country benchmarking and sector-profiling work, as well as awide range of targeted investment generation and facilitation activities, focused ona small number of priority sectors of common interest to the participating countries.
MIGA will also deliver a series of skills
training and other capacity development
activities through the facility.
The project will work hand-in-handwith leading investment intermediaries in
the region—including investment promotion agencies, chambers of commerce, andbusiness associations—on the design andexecution of outreach activities.“MIGA has
piloted this type of demand-driven marketing program in other regions aroundthe world, with very good results so far,”says San Martin.
The Vienna facility will operate under
MIGA’s supervision, with guidance froma steering committee comprised of representatives from MIGA, the Austrian
government, and participating countries.
It is the first project that will be executed
under MIGA’s new Invest-in-Development
Facility.
More information on the program can befound at www.ipanet.net/EIOP/index.htm.

2004 second quarter
GUARANTEES ISSUED

Investor

Investor
Country

HostCountry

SectorABN Amro Bank, N.V.
Slovene Export Corporation, Inc.
Mozambique Rice Growers Pty Ltd.
Compagnie Generale Des Eaux
Cefla Capital Services, S.p.A.
Raiffeisenbank A.S.
Raiffeisen Zentralbank Osterreich AG
Euromedic Diagnostic B.V.
Bank Austria Creditanstalt AG
Can-Pack S.A.
Raiffeisen Zentralbank Osterreich AG
Darco Environmental Pte.Ltd
Credit Lyonnais, S.A.
Leon Construction International B.V.
Elecnor S.A.
IP Direct Pty Ltd
Raiffeisen Zentralbank Osterreich AG
Raiffeisen Zentralbank Osterreich AG
Geosurvey International LLC

The Netherlands
Slovenia
Australia
FranceItaly
Czech Republic
Austria
The Netherlands
Austria
PolandAustria
Singapore
FranceThe Netherlands
Spain
South Africa
Austria
AustriaUSA

BrazilBosnia and Herzegovina
Mozambique
China
BrazilSerbia and Montenegro
Serbia and Montenegro
Romania
Romania
UkraineBosnia and Herzegovina
China
Vietnam
Moldova
BrazilNigeria
UkraineRomania
Kenya

Power
Services
Agribusiness
Water
Manufacturing
Financial
Financial
Health services
Financial
Manufacturing
Financial
Water
Power
Services
Power
Services
Financial
Financial
Services

Gross
Coverage
($ m)
26.8
4.0
0.5
70.0
2.0
23.3
0.6
11.3 *
69.8
4.2
29.0
7.1
15.0
0.9
28.9 *
11.4
95.0
20.1
1.4

* Represents more than one contract.

MIGA NEWS|Co v e r i n g O C T NOV DEC 2003

page 6MIGA News is published quarterly by
the Multilateral Investment Guarantee Agency,
a member of the World Bank Group.
EDITOR
Angela Gentile
DESIGN
Suzanne Pelland
EDITORIAL COMMITTEE
Moina Varkie
Alpona Banerji
David Bridgman
Elena Palei
Aradhana Kumar-Kapoor
Noureddin Ennaboulssi
To request additional copies,
be added to the MIGA News
mailing list, or receive MIGA News
electronically, contact:
Wyfield Chowt. 202.458.9595
wchow1@worldbank.org

CORPORATE RELATIONS
Moina Varkie
Chieft. 202.473.6170
mvarkie@worldbank.org
UNDERWRITING AT
HEADQUARTERS
Peter M. Jones
Coordinating Manager
Asia and the Pacific,
Latin America and the Caribbeant. 202.458.0443
pjones1@worldbank.org

UNDERWRITING AT
REPRESENTATIVE OFFICES
Johannesburg, South Africa
Mansour Kane
Regional Manager
Sub-Saharan Africa
t. 27.11.341.9000
mkane2@worldbank.org
Paris, France
Patricia Veevers-Carter
Regional Manager
Europe and Central Asia,
Middle East and North Africa
t. 331.40.693.275
pveeverscarter@worldbank.org

Christophe Bellinger
Coordinating Manager
Sub-Saharan Africa,
Europe and Central Asia,
Middle East and North Africa
t. 202.473.0600
cbellinger@worldbank.org

Singapore
Philippe Valahu
Regional Manager
Asia and the Pacifict. 65.63244825
pvalahu@worldbank.org

Ileana Boza
Regional Manager
Latin America and the Caribbeant. 202.473.2807
iboza@worldbank.org

Tokyo, Japan
Mari Kogiso
Special Representative, Tokyo
t. 81.3.3597.9100
mkogiso@worldbank.org

INVESTMENT MARKETING
Tessie San Martin
Directort. 202.458.4876
tsanmartin@worldbank.org
John Wille
Program Manager
Information Products andServicest. 202.473.2707
jwille@worldbank.org
David Bridgman
Program Manager
Capacity Building andInvestment Facilitationt. 202.473.0775
dbridgman@worldbank.org
POLICY AND ENVIRONMENT
Gerald West
Directort. 202.473.2060
gwest1@worldbank.org
FOR GENERAL INQUIRIESAND APPLICATIONS
Federica Dal Bono
Corporate Relations Officert. 202.458.9292
fdalbono@worldbank.org
FOR MAILING
1818 H Street, NW
Washington, DC 20433
USA

MIGA NEWS|Co v e r i n g O C T N O V D E C 2 0 0 3

page 7

PROJECTHIGHLIGHTSPROJECTHIGHLIGHTS

Public-Private
Diagnostic Centers
to Open in
Romania

MIGA has issued four guarantees totaling $11.34 million to Euromedic Diagnostics BV of theNetherlands for its $7.97 million equity investment in SC Euromedic Romania s.r.l. of Romania.
The guarantees are for a period of seven years and provide coverage against the risk of a breachof contract.
The project involves the establishment and operation of four diagnostic centers by SC
Euromedic Romania s.r.l., based on a public-private partnership with the national healthcare service. The diagnostic centers will operate in the cities of Arad, Bucharest, Constanta, and Petrosani,and will provide MRI, computer, tomography, bone densitometer, ultrasound, and stress tests
diagnostic services.
Euromedic’s healthcare services should make significant contributions to Romania’s social
services infrastructure by offering diagnostic services to a broad range of patients.
In addition to providing healthcare services, the project is expected to bolster the Romanian
economy. The four clinics will hire 227 permanent medical employees and 13 managers.
Euromedic will also provide employees with the training required to operate the clinics. Each unit
will buy goods and services from local suppliers; annual procurement for the four clinics will total$2.1 million. Government tax and fee revenue from Euromedic’s operations is expected to total
close to $1 million annually.
SC Euromedic Romania s.r.l. represents MIGA’s second turnkey project in the health sector,
the first being a dialysis center in neighboring Bosnia and Herzegovina.

C O N TA C T M I G A C O N TA C T

Databaseto Help Kenyans
Beef Up Property
Assessment andTaxation

MIGA has issued a guarantee of $1.4 million to Geosurvey International, LLC of the United Statesof America for its $1.5 million equity investment in East Africa Geosurvey Limited of Kenya. The
guarantee is for a period of 15 years and provides coverage against the risks of transfer restriction,
expropriation, war and civil disturbance, and breach of contract.
The project involves the development of a computerized database system for Kenyan local
authority councils, which will link landbase mapping and land parcel data with property ownership and taxation records in a Land Information System. The main objectives of the project are tostrengthen municipal councils’ property assessment procedures, as well as taxation and fees collection systems.
The project will have several important developmental impacts for the Kenyan economy. Since
property taxes in Kenya generally provide 20 percent of the total revenues of local governments and 1
percent of central government revenue, East Africa Geosurvey Limited’s operations could potentiallybolster state and community coffers. It is estimated that, with the help of the project, local governments will be able to double the collection of property-related taxes and fees within three years in
the counties and towns participating in the project. In addition to tax collection, the project will
permanently employ about 500 local workers, whose wages will be 10-20 percent higher than thoseof government employees and subject to a bonus system designed to encourage better performance.
The project will also yield benefits to local communities, including improving access to accurate
property information, updating the local address system, improving consumer access to mortgages,
and enabling municipal governments to issue bonds and access capital markets.
The project is consistent with the World Bank Group strategy for Kenya, which focuses on supporting government efforts to improve economic governance and achieve fiscal adjustment. East
African Geosurvey Limited will create an opportunity for better tax collection and possibly better
municipal services. By supporting the project, MIGA meets two of the agency’s development priorities: supporting projects in Africa and in the world’s poorest (IDA-eligible) countries.

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I N V E S T M E N T S

M

I N S U R I N G
E N S U R I N GO P P O R T U N I T I E S

Multilateral Investment Guarantee Agency

1818 H Street, NW
Washington, DC 20433, USA

World Bank Group

www.miga.org

MIGA: Promoting foreign direct investment into emerging economies
to improve people’s lives and reduce poverty.

INSIDE: MIGA UNVEILSSIMPLER GUARANTEE CONTRACT. . . AND MORE