Lloyd’s of London has partnered with the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) to increase annual guarantee issuance to $20 bn by 2030.
Collaboration with reinsurers is essential for this initiative. Lloyd’s market provides cover that allows MIGA to use its investment guarantee capacity, giving investors greater protection for projects in developing countries.
This partnership builds on more than 25 years of cooperation between Lloyd’s and MIGA, showing their shared commitment to driving sustainable development through the World Bank Group Guarantee Platform.
At an event during New York Climate Week, Banco do Brasil S.A. was revealed as the recipient of a $1.2 bn MIGA guarantee. The guarantee supports local lending to farmers engaged in no-till agriculture and other climate-smart practices that contribute to carbon sequestration and climate benefits. The private capital mobilization for this is backed by 15 reinsurers.
As part of the new agreement, MIGA is now managing the World Bank Group Guarantee Platform.
Their collaboration has historically supported global projects aimed at economic growth, poverty reduction, and quality of life improvements. Many of these efforts have also contributed to climate change mitigation and adaptation in developing nations.
In FY24, MIGA issued guarantees for 30 projects across 22 countries, all supporting climate change mitigation or adaptation.
Hiroshi Matano, MIGA Executive Vice President, echoed the sentiment: “Our long-standing partnership with Lloyd’s has benefited both investors and host countries, increasing foreign investment and providing larger project coverage. We look forward to continuing this relationship.”
Our partnership with MIGA allows the (re)insurance industry to support impactful projects worldwide. By securing these loans, we help ensure that this work continues for years
John Neal, CEO of Lloyd’s
Lloyd’s plans to update its framework for for dealing with poor conduct & behaviors, addressing both financial and nonfinancial issues in the market.
The revised system aims to better align with partner firms’ HR and disciplinary procedures while maintaining support for their independent investigations and actions.
A market bulletin outlines these changes. Lloyd’s also intends to clarify unacceptable behaviors and define when it will intervene, increasing focus on oversight and intervention. The market seeks to streamline its decision-making processes, as detailed in a consultation report linked to the bulletin.
The World Bank Group’s Multilateral Investment Guarantee Agency is a specialized international organization that promotes foreign direct investment (FDI) in developing countries by offering political risk insurance and credit enhancement.
Established in 1988, MIGA’s mission is to encourage investment in regions that face higher risks, particularly political or social instability, where traditional investors might hesitate.
MIGA provides guarantees to investors and lenders against potential losses from various risks, including:
- Political risks such as expropriation, breach of contract, and currency inconvertibility.
- Conflict-related risks such as war or civil disturbance.
- Non-honoring of financial obligations by sovereign or sub-sovereign entities.
By mitigating these risks, MIGA helps investors confidently undertake projects that contribute to economic growth, job creation, and sustainable development in developing nations. The agency primarily focuses on sectors like infrastructure, energy, finance, agribusiness, and manufacturing, which are critical for development.
MIGA operates as part of the World Bank Group and complements other World Bank Group organizations by helping countries attract private sector investment. The agency is funded by member countries and operates in alignment with broader global development goals, including poverty reduction and sustainable growth.
MIGA also emphasizes supporting climate change mitigation, advancing environmental and social safeguards, and enhancing the overall resilience of developing economies.
by Yana Keller
