History

In September 1985, the Board of Governors of the World Bank endorsed the Convention establishing the Multilateral Investment Guarantee Agency. MIGA was established and became operational on April 12, 1988 under the leadership of then-Executive Vice President Yoshio Terasawa, becoming the fifth member institution of the World Bank Group. MIGA initially had $1 billion ($1.94 billion in 2012 dollars) in capital and 29 member states.

All members of the International Bank for Reconstruction and Development (IBRD) were eligible to become members of the agency. MIGA was established as an effort to complement existing sources of non-commercial risk insurance for investments in developing countries. By serving as a multilateral guarantor, the agency reduces the likelihood of confrontations among the investor's country and the host country.

MIGA's inaugural investment guarantees were issued in 1990 to cover $1.04 billion ($1.83 billion in 2012 dollars) worth of foreign direct investment (FDI) comprising four individual projects. The agency also issued its first reinsurance contracts signed in collaboration with Export Development Canada and the United States' Overseas Private Investment Corporation (OPIC).

The agency joined the Berne Union, an international community of export credit and investment insurance providers in 1994.

In 1997, MIGA issued the inaugural contract under its Cooperative Underwriting Program to support an energy project in Indonesia. In collaboration with the European Union Investment Trust Fund for Bosnia and Herzegovina, the agency set up a fund for investment guarantees amounting to $12 million ($17 million in 2012 dollars). The agency also established the West Bank and Gaza Investment Guarantee Trust Fund with a capacity of $20 million ($29 million in 2012 dollars).

In 1998 the Council of Governors of MIGA adopted a resolution establishing a general capital increase of $850 million ($1.2 billion in 2012 dollars), and transferring a grant of $150 million ($212 million in 2012 dollars) from the IBRD. MIGA exceeded $1 billion ($1.4 billion in 2012 dollars) in investment guarantees within a single year for the first time in 1999.

In 2000, MIGA paid its first insurance claim since the agency's founding.

In 2001 MIGA's issuance of new investment guarantees grew to $2 billion. The agency launched its Small Investment Program in 2005 in an effort to promote investment among small and medium enterprises. That same year, MIGA set up its Afghanistan Investment Guarantee Facility in an effort to promote FDI into Afghanistan.

In 2007 MIGA issued investment guarantees for a Djibouti port, marking its first support in the form of Islamic finance. The agency also launched PRI-Center.com (now no longer active) as a portal for information on political risk management and investment insurance, which also contained its FDI information services.

In 2009, the Board of Directors enacted changes to MIGA's operating procedures and authorized coverage for default of sovereign financial obligations. The agency also launched an annual publication titled World Investment and Political Risk which reports on trends in worldwide investment and corporate perceptions of prospects and risk, as well as shifts in the political risk insurance industry.

Although once dominated by large public and multilateral underwriters, private insurance firms accounted for approximately half of the political risk insurance market in 2007. As a result, MIGA has paid closer attention to exceptionally risky countries that have little appeal to foreign investors, and has insured projects among nations in the global south.

MIGA conducted a survey in 2010 which showed that political risk is the most important deterrent of long-term foreign direct investment in developing countries, even more than economic uncertainty and poor public infrastructure.

MIGA's Council of Governors amended the agency's convention in 2010 in an attempt to improve the organization's effectiveness by expanding the range of investments eligible for political risk insurance.