MIGA cover
MIGA cover means guarantees issued by the Multilateral Investment Guarantee Agency (MIGA), a World Bank Group member, that protect cross-border investors and lenders against specified non-commercial risks and, for certain products, credit enhancement exposures in developing member countries. MIGA's mandate is to facilitate foreign direct investment by providing political risk insurance and credit enhancement, not to lend or to write conventional export credit insurance.
MIGA describes itself as an insurer, not a lender. Cover is available only for equity interests, loans related to an investment project, and certain contracts whose remuneration depends on project revenues or production. Guarantees typically run for more than one year up to 15 years, and occasionally up to 20 years under special circumstances, with a stated minimum length of three years on the products site.
How MIGA cover is used on bank EF and PF desks
In project finance and cross-border investment structures, MIGA cover is used to mitigate host-government-related perils that commercial lenders and equity sponsors will not retain uninsured. Political risk guarantee categories include breach of contract, currency inconvertibility and transfer restriction, expropriation, and war and civil disturbance. Credit enhancement products include non-honoring of sovereign or state-owned enterprise financial obligations and other credit guarantees that protect lenders if public obligors fail to pay unconditional obligations.
Banks treat MIGA as a treaty-based multilateral insurer with World Bank Group shareholding, which MIGA describes as supporting deterrence and dispute resolution between investors and governments. Cover can be arranged alongside public and private PRI providers; MIGA may act as arranger for a project's total non-commercial insurance requirements.
Eligibility, amounts and pricing mechanics
Eligible investors are generally nationals or entities of MIGA member countries other than the host country, with limited exceptions where funds originate outside the host country. Eligible investments include new projects and expansions, modernisations and certain acquisitions, including privatisations, where developmental impact tests are met. Equity cover is typically up to 90% of the investment. Loan and loan guarantee cover is generally up to 95% of principal, or higher on a case-by-case basis. Premium rates are set per project and vary by country, sector, transaction and risk type, and are due at the beginning of each contract period.
Once effective, MIGA may terminate for non-compliance, while the guarantee holder may reduce or cancel from the third anniversary under stated conditions. MIGA discloses summaries of proposed guarantees and project briefs as part of its transparency practice.
Distinctions from ECA comprehensive cover
MIGA cover is investment and lender PRI or credit enhancement into developing members, not national export credit comprehensive cover tied to home-country exports. Products from an export credit agency price commercial buyer default under OECD premium rules when Arrangement support is provided. MIGA's core PRI suite excludes ordinary commercial credit risk of private buyers and instead targets non-commercial perils and selected public payment obligations. Desks therefore place MIGA beside, not instead of, ECA export cover when a project combines export packages with host-country investment risk.