Financial Times

MIGA to promote investments through trust fund
By Duruthu Edirimuni
The Multilateral Investment Guarantee Agency (MIGA), the global insurer to private investors, is gearing itself to promote investment into Sri Lanka this year through a trust fund mechanism.

"Our lack of marketing and speedy response to investor queries deterred us from attracting foreign investors during the time we have been in Sri Lanka, but we want to reverse that this year," Yukiko Omura, Executive Vice President of MIGA, part of the World Bank and an advisor to countries on foreign investment, told The Sunday Times FT.

She said there is foreign investor interest in Sri Lanka and MIGA will be working closely with the Board of Investment (BOI) to attract them. Presently the only project MIGA has attracted and is the insurer for is a US$ 1.7 million small captive power project in the south of the island, since its inception in the country in October, 2003.

Omura said MIGA is talking to the government about an investment guarantee trust fund to be set up within a month to further encourage foreign direct investment into the country. "The trust fund will encourage local and foreign investment for conflict affected parts of the North and the East," she said, adding that it will entice private investment by providing insurance cover against non-commercial risks, such as political risk.

Omura said that priority will be given to infrastructure, housing, tourism and agriculture development and will initially focus on tsunami reconstruction, aligning with MIGA's mission to paying particular attention to post-conflict environments.

Meanwhile, Saliya Wickremasuriya, Chairman, BOI said the MIGA officials spoke to him about their political risk insurance product stimulating foreign investment in the North and the Northeast. "This product is an excellent addition to BOI's portfolio and MIGA and the BOI will cross link websites to work closely to promote foreign investment," he said. He said this is just an initial plan, but the modalities and quantum of operations have not been finalised as yet between the two authorities.

Since its inception in 1988, MIGA has issued more than 650 guarantees for projects in 85 developing countries. As of June 2003, total coverage issued exceeded US$ 12 billion, bringing the estimated amount of foreign direct investment facilitated since inception to more than US$ 50 billion.

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