Political Risk Insurance Solutions 1 2 3 4

Political Risk Insurance Solutions

1. 2. 3. 4. 5. 6. MIGA in the World Bank Group Product Line MIGA Value Added MIGA’s Performance Project Structures Underwriting Procedures MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 1

World Bank Group IBRD International Bank for Reconstruction and Development IDA International Development Association Est. 1960 Est. 1945 IFC MIGA Est. 1956 Est. 1988 International Finance Corporation Multilateral Investment Guarantee Agency Role: Support countries’ economic and institutional development Promote private sector development Promote cross-border investment and lending Clients: Governments of member countries with annual per capita income between $1, 025 and $6, 055 Governments of member countries with annual per capita income of less than $1, 025 Investors in member countries Debt and Equity investors in member countries - Technical Assistance - Loans - Policy Advice - Technical Assistance - Interest-Free Loans - Policy Advice - Equity/Quasi-Equity - Long-Term Loans - Advisory Services - Political Risk Insurance - Credit Enhancement Products: Shared Mission: “End extreme poverty and build shared prosperity” MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 2

1. 2. 3. 4. 5. 6. MIGA in the World Bank Group Product Line MIGA Value Added MIGA’s Performance Project Structures Underwriting Procedures MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 3

Various tools used to mitigate Political Risks § Contractual Protection/ Local Law: requiring Host Countries to give transaction agreements the force of law by legislative enactment for example. § Structuring for Bilateral Investment Treaties § Upfront due diligence and continuous monitoring § Partnering with local investors § Diversification § Political Risk Insurance MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 4

Risks Faced by Investors and Lenders: Political Risk Insurance Solutions for Lebanon Inability to convert or transfer dividends or loan payments due to FX restrictions Transfer Restriction and Convertibility Cover Destruction or interruption of business due to political violence War and Civil Disturbance Cover Government nationalizes or otherwise makes it impossible to operate the project through discriminatory measures Expropriation Cover Failure of government to honor obligations under contractual agreements and subsequent failure to honor arbitral award MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP Breach of Contract Cover 5

Eligible Investments • Cross-border investments from any MIGA member country to a MIGA “developing member country”* in the form of: – – equity shareholder loans shareholder loan guaranties non-shareholder loans • Other forms of investment, such as technical assistance and management contracts, asset securitizations, capital market bond issues, leasing, services, and franchising and licensing agreements, may also be eligible for coverage * The list of developing member countries is available on www. miga. org. MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 6

General Terms • MIGA can cover up to 90 percent of equity and 95 percent of debt • Can cover both equity and debt in same project • Tenors up to 15 years (occasionally up to 20 to match the term of contract – e. g. Power Purchase Agreement) • MIGA cannot terminate the contract unless the investor defaults on its contractual obligations to MIGA • Client may reduce or cancel coverage without penalty on any contract anniversary date starting with the first or third anniversary MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 7

1. 2. 3. 4. 5. 6. MIGA in the World Bank Group Product Line MIGA Value Added MIGA’s Performance Project Structures Underwriting Procedures MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 8

MIGA’s Value Added • Management of risks at pre-claim level (110+ pre- claims among over 800 projects. Two claims paid for expropriation, Seven for war and civil disturbance) Leveraging the World Bank network Highly rated • • Highly rated multilateral by Basel Committee Reduce risk weighting and capital provisioning Financially stable • • Strong capital base Mobilize reinsurance capacity Strong risk appetite • • Operates in challenging markets Longer tenors (up to 20 years) Environmental and social risk mitigation • Best practices in environmental and social standards • Strong pre-claim management MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 9

1. 2. 3. 4. 5. 6. MIGA in the World Bank Group Product Line MIGA Value Added MIGA’s Performance Project Structures Underwriting Procedures MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 10

MIGA’s New Guarantee Issuance (US$ billion in fiscal year) 4. 8 4. 3 3. 2 2. 7 2. 8 2012 2013 2. 8 2. 1 1. 5 2010 2011 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 2014 2015 2016 2017 11

MIGA’s Gross Exposure (US$ billion in fiscal year) 17. 8 v Supported more than 800 14. 2 projects in 110 countries 10. 3 [VALUE]. 0 2012 2013 12. 4 12. 5 2014 2015 9. 1 6. 5 7. 3 7. 7 5. 3 2007 2008 2009 2010 2011 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 2016 2017 12

1. 2. 3. 4. 5. 6. MIGA in the World Bank Group Product Line MIGA Value Added MIGA’s Performance Project Structures Underwriting Procedures MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 13

Political Risk Insurance – Expropriation, Transfer Restriction, War and Civil Disturbance Cover Elif Global Packaging S. A. E, Egypt Elif Plastic (Turkey) Elif Global (Turkey) 1% equity 99% equity v Project: New packaging plant in 6 th of October City’s Industrial Zone with initial production capacity of 15, 000 tons of plastic packaging per year Elif Loan Guarantee* € 8. 3 M loan Elif (Egypt) $15. 5 M A loan Landesbank Baden. Wurttemberg (LBBW) v MIGA cover • Amount: $26. 4 m • Tenor: 15 years (equity); 10 years (loan guarantee) • Issued: June 2014 *Elif Plastik will guarantee the LBBW loan Elif Plastik and Elif Global have jointly guaranteed the IFC loan Guarantee holder Project enterprise MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 14

Political Risk Insurance – Expropriation, Currency Inconvertibility and Transfer Restriction, Breach of Contract ACWA Zarqa Thermal Power Station, Jordan ACWA Power International (KSA) Social Security Corporation (Jordan) Privatization Holding Co. (Kuwait) 100% ACWA Power Global (UAE) 30% 70% 100% ACWA Power Jordan Holdings (UAE) IFC 85% 15% Red Sea Energy (Jordan) Kingdom Electricity Holding (Jordan) 0%/{40%}* 100%/{60%}* IFC EBRD CCB ICBC OFID EAB Obligor Guarantee holder Project enterprise * Reflects future acquisition Non-shareholder loans Mahatat Al Zarqa Le Tawleed Al Takah Al Karabaieyaha (Jordan) WSA WAJ (Jordan) IA+ Guarantee Go. J (Jordan) EPC Contract PPA+ TCA NEPCO (Jordan) MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP SEPCO (China) v Project: Design, construction, ownership, operation and maintenance of a combined cycle dual fuel thermal power generating facility with a net installed capacity of 485 megawatts. It will replace a 363 megawatt power plant decommissioned in December 2015. v Power to be sold to NEPCO under 25 year PPA. v MIGA cover for non-shareholder loan: • Total Amount: $215. 6 m • Tenor: 20 years • Issued: Dec. 2016 O&M + LLA CEGCO (Jordan) 15

Political Risk Insurance – Breach of Contract Cover Azito Energie S. A. , Côte d’Ivoire Proparco BIO FMO DEG BOAD BICICI Direct Agreement Globeleq, IPS Loans Shareholder Loan Hyundai Engineering & Construction Co. (EPC Contractor) Compagnie Ivoirienne de l’Electricité (Electricity Off-taker) Azito Energie S. A. Azito O&M-affiliated to Globeleq (Operator) Alstom Power Systems SA (Major Maintenance) Irrevocable Instruction to Off-take and Pay Government of Côte d’Ivoire Concession Agreement Obligor Guarantee holder Project enterprise MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP v Project: Conversion of the existing thermal power plant from simple-cycle to combined-cycle v 20 -year power purchase agreement with CIE v MIGA cover • Amount: $116. 1 • Tenor: 20 years • Issued: December 2012 Gas Sales Agreement Afren, CNR, Foxtrot, Rialto (Gas Producers) 16

1. 2. 3. 4. 5. 6. MIGA in the World Bank Group Product Line MIGA Value Added MIGA’s Performance Project Structures Underwriting Procedures MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 17

Underwriting Process Investor Preliminary Application Definitive Application (fees apply) Initial Screening Meeting Underwriting (2 -4 months) • • • Analysis of development impact Environmental and social review Integrity checks Economic, financial viability assessment Pricing and reinsurance Public Host Disclosure Country Approval Second Internal Review Meeting Board Approval Contract Preparation & Signing Monitoring/Evaluation MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP 18

Senior Management Team, Washington DC Keiko HONDA Sarvesh SURI Executive Vice-President and CEO +1 202 473 2503 khonda@worldbank. org Director Operations Acting Vice-President and COO +1 202 458 9760 ssuri 1@worldbank. org Muhamet FALL Aradhana KUMARCAPOOR Associate Director and Chief Underwriter Operations +1 202 458 2695 mfall 3@worldbank. org Santiago ASSALINI Director Finance and Risk +1 202 458 5060 sassalini@worldbank. org Merli BAROUDI Director Economics and Sustainability +1 202 473 1371 mbaroudi@worldbank. org Director and General Counsel +1 202 473 5952 akumarcapoor@worldbank. org Sector Managers, Washington DC Nabil FAWAZ Elena PALEI Olga SCLOVSCAIA Marcus WILLIAMS Tim HISTED Jae Hyung KWON Chris MILLWARD Hoda MOUSTAFA Yasumitsu HIMENO Layali ABDEEN Agribusiness and General Services +1 202 473 8437 nfawaz@worldbank. org Infrastructure – Telecom, Transport and Water +1 202 473 4642 epalei@worldbank. org Finance and Capital Markets +1 202 458 2823 osclovscaia@worldbank. org Energy and Extractive Industries +1 202 473 1023 mwilliams 5@worldbank. org MIGA – Regional offices Head South and Southeast Asia +65 9029 4078 thisted@worldbank. org Representative Tokyo +81 3 3597 6633 yhimeno@worldbank. org Head North Asia +82 (0) 32 713 7020 jkwon@worldbank. org Senior Underwriter Middle East and North Africa +972 2 236 6571 labdeen@worldbank. org Head Europe and Central Asia +33 1 4069 3160 cmillward@worldbank. org Head Africa +1 202 527 8135 hmoustafa@worldbank. org

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