Nippon Export and Investment Insurance (NEXI), Japan's official export credit agency and the Multilateral Investment Guarantee Agency (MIGA), the political risk insurance arm of the World Bank Group, signed a MoU on 3 May to share risk.
Both organisations formalised the agreement to share risk through reinsurance on investments made by Japanese firms in developing countries. Through the arrangement, MIGA and NEXI will reduce the exposure either would face individually by purchasing reinsurance policies from each other, allowing both agencies to support projects that could in some instances be too challenging for either to handle alone.
"MIGA's strategy for the next few years focuses on mobilizing private capital to three priority areas: clean energy, fragile and conflict-affected situations, and low-income countries," said MIGA Executive Vice President and CEO Keiko Honda. "This agreement with NEXI helps us work more closely with Japanese firms, and to turn our strategy into results."
"Through the MoU, MIGA and NEXI are expected to use their own strengths to help Japanese companies develop effective investment projects. I definitely believe that the collaboration between MIGA and NEXI will make a further positive contribution to many countries." said NEXI Chairman and CEO Mr Kazuhiko Bando.
The MoU was signed by Ms Honda and Mr Bando at the sidelines of the Japan-Africa Public–Private Economic Forum held in Johannesburg, South Africa.
MIGA’s support for Japanese firms represents the fourth highest among investor countries, with MIGA currently providing over $2b in guarantees for investments made by Japanese firms across the globe. It was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.