MIGA Insurance: What It Is, How It Works, How To Get It

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With the beginning of the full-scale war initiated by Russia in Ukraine and a global context of uncertainty, investment insurance has become an essential issue for all investors worldwide.

One of the options that ensure certain protection is MIGA Insurance.

MIGA (Multilateral Investment Guarantee Agency Insurance) is an international agency providing investment insurance against non-commercial risks in developing countries.

Leopolis team has prepared an extensive guide about the key things that explain the policy of MIGA, the detailed algorithm of issuing guarantees, eligible countries, investments, and claims resolution.


The first idea of mitigation of political risks appeared in 1948 when global discussions about the mitigation of unsystematic political risks started. It did not have a substantial concept until 1985 when the World Bank started the creation of a new affiliate investment insurance agency for insuring projects in high-risk countries.

Finally, in 1988, Multilateral Investment Guarantee Agency (MIGA) was incorporated as an independent entity in the World Bank Group. The agency started its business with $1 b of capital stock, and all members of IBDR were invited to be members of MIGA. 29 countries accepted the invitation, including the USA.

The mission of MIGA includes four directions:

  • promote foreign investment in developing countries,
  • support economic growth,
  • reduce poverty,
  • improve people's lives.

Today, MIGA includes 182 member countries, has a history of 800+ covered projects, and possesses a $24 b gross guarantee portfolio.


In March 2022, after the beginning of the full-scale invasion of Russia in Ukraine, the talks started about the possibility of addressing MIGA to attract certain insurance to cover the losses.

Ukraine has been a member of MIGA since (1992). Therefore, all natural and legal persons in Ukraine are eligible for insurance guarantees for investments outside of Ukraine.

But there are certain limitations to foreign elements in this matter.

  • Foreign investors in Ukraine and entities from offshore countries could apply for an insurance guarantee on their investment in Ukrainian assets. Though, MIGA bases its decision on the nationality of the beneficiaries. Therefore, an offshore entity with a Ukrainian beneficiary is not eligible for the guarantee of investment in Ukraine.
  • If Ukrainian businesses want to apply for a guarantee for investments in Ukraine, they can do it only by the joint application of a Ukrainian entity and government.

There are a few things worth mentioning regarding the involvement of MIGA during Russia's invasion of Ukraine.

There is a limit established for all member countries: not more than $720 m can be issued per country on a net basis for the total portfolio.

But we have some good news for current and potential investors in Ukraine.

  • In September 2022, The Ministry of Economy of Ukraine confirmed that MIGA initiated a pilot insurance program worth $30 m for Ukraine.
  • Moreover, after the completion of structuring the World Bank’s trust fund, Ukraine will receive USD $17 b for the restoration of critical infrastructure and stimulation of economic development. Part of this amount will be directed specifically to the insurance of investors’ risks.
  • It is expected that MIGA`s program for 2023 would have a capacity of $1 b, including coverage for Ukrainian investors, which would initiate new investments in Ukraine.


Every investor who wants to not only learn how MIGA Insurance works but also considers using it in his investment portfolio needs to understand the process of underwriting MIGA Insurance.

Let`s look closely at every step of it.

The process of issuing MIGA Insurance consists of three key steps.

1. Submitting Preliminary Application

  • Investor submits Preliminary Application
  • MIGA assigns an underwriter, a person responsible for analyzing the application
  • The underwriter determines whether the project falls within the eligibility criteria
  • If everything goes on, the Underwriter & Investor discuss project details and insurance terms
  • After the completion of a discussion, the Underwriter identifies the initial ESG impact

2. Submitting Definitive Application

The underwriting team processes the application in the following steps:

  • Study the feasibility of the project
  • Conclude financial modeling & forecasting, loans evaluation
  • Investigate financial position
  • Assess Environmental & Social criteria
  • Make any other estimations & investigations

3. Decision-making process

  • The underwriting team presents a completed analysis of all project-related features
  • MIGA & Host government conclude negotiations to provide Host country approval
  • MIGA provides management approval
  • MIGA publicly discloses a summary of the project
  • MIGA approves Board of Directors
  • MIGA together with the Investor sign the agreement

And the next question that you will be interested in is how long it takes to issue a MIGA Insurance guarantee.

We would like to advise you to estimate 4 to 6 months to complete all the abovementioned steps.

But here are two exceptions:

  • You can do it faster, just in 2 months, if you have a project Under Small Investment Program;
  • It can take longer if your project requires complex Environmental and Social Due Diligence.


There are certain fees and financial issues concerning the whole process of MIGA's involvement in the project.

Firstly, there are three types of Underwriting fees:

  1. Definitive Application Fee
  2. Processing Fee
  3. Syndication Fee

Underwriting fees is the fee that you pay for your application to be reviewed, verified, and processed. This is a one-time payment, contrary to a premium that is paid regularly throughout the whole duration of a guarantee.

There are two types of Application Fee:

  • $5 k is paid to cover a project worth less than $25 m,
  • $10 k is paid for a larger cover of up to $250 m.

You have to pay the Application Fee when you are submitting a Definitive Application.

Application Fee is applied:

  • toward the initial premium if the project is approved (this means that you would have to pay less for the first premium, as the Application Fee is included in the first-year premium)
  • or refunded in case of MIGA declines the project

Processing Fee is an additional fee to cover assessment costs of complex projects which need supplementary research. This fee could cover the logistics costs of the underwriter visiting project facilities.

You have to pay the Processing Fee after MIGA processes your application and decides that it needs to dig deeper into the details to approve the guarantee.

Syndication Fee is applied in the case of syndicate insurance of the project. It is required to cover a project worth more than $250 m.

In this case, MIGA initiates syndicate creation for financing. This means that a few financial institutions accumulate a certain amount of money that is accessed to be sufficient to cover a project. So, the Syndication Fee is designed to cover certain expenses needed to create such a syndicate and other supplementary payments.

The next fee is the premium that is paid annually as a price for using insurance provided by MIGA.

The guaranteed premium is approximately 1% of the insured amount per annum. E.g., for a $20 m investment across 10 years, you would have to pay $2 m as a premium.

Guarantee premiums could vary due to the country or project risks.

MIGA issues a guarantee for a duration to:

  • 15 years — in general cases,
  • 20 years — in some cases if it is justified by the nature of the project.

Our best consulting advice will be to start preparing an application for MIGA Insurance with calculations of the profitability of such approximate expenses. So you will need to check if you can provide these fees for the project to start on time.


MIGA offers 5 different coverage products under which the agency may provide insurance up to $250 m.

If it is necessary to have larger insurance, the agency will arrange the syndication of insurance, as mentioned above.

1. Breach of Contract

Breach of contract in this case means that:

  • Government or state-owned enterprises violate the provisions of a contract
  • Government does not fulfill its obligations to the investor

2. Currency Inconvertibility and Transfer Restriction

This product is applied when:

  • It is impossible to transfer local currency to hard currency
  • There are restrictions imposed on currency transfer abroad by the Host central bank or government

3. Expropriation

The guarantee under this product covers the decisions of:

  • Local government to nationalize or confiscate certain assets or the whole enterprise
  • Government to suspend the business activity

4. War and Civil Disturbance

This is an especially relevant product to the situation in Ukraine amidst the full-scale invasion of russia, which covers:

  • Damage and destruction of tangible assets during the war, civil disturbance, or terrorist acts
  • Inability to conduct operations due to politically motivated acts of war, civil disturbance, or terrorism

5. Non-Honoring of Financial Obligations

This product is used in case of defaults by bonds or loans of the sovereign, sub-sovereign, or state-owned entity

Therefore, if you want to apply for MIGA Guarantee, you need to check if your situation falls within the designated products. Otherwise, you risk receiving a rejection.


If you checked that your project falls within the products offered by MIGA and you have enough money to cover the fees, we offer you to verify if your project completes the general coverage criteria checklist.

The first larger group includes applicants from 182 eligible countries that are members of MIGA countries.

To meet the criteria, you need to belong to a certain group.

1. Corporations and financial institutions are eligible for MIGA guarantee if:

  • They are the incorporated entities of the member country other than the Host country (so they are recognized as foreign investors in the country where the project is initiated)
  • Their main place of business is in the member country
  • The majority of their capital is owned by nationals of member countries

2. State-owned companies

  • if they operate on a commercial basis

3. NGOs

  • if an investment is carried out on a commercial basis

4. Natural person

  • citizen of the member country other than the Host Country

All other countries are non-eligible to get insurance guarantees for the investments, either investor originated from these countries or investments would be provided into these countries.

The most well-known countries are divided into two bands:

1. World Bank members:

  • Brunei,
  • Kiribati,
  • the Marshal Islands,
  • San Marino,
  • Tonga,
  • Tuvalu.

2. United Nations members:

  • North Korea,
  • Andorra,
  • Cuba,
  • Liechtenstein,
  • Monaco,
  • Nauru.

So basically to qualify for MIGA Insurance, you need to meet both the country criteria and

belong to a specific investor type.


MIGA Insurance can cover three types of investments under certain provisions.

1. Applicants receive coverage of 99% of such debts with one year plus maturity (meaning they have to be issued for longer than a year):

  • Shareholder loans
  • Shareholder loans guarantees
  • Non-shareholder loans

2. 95% of direct investments are covered if they provide shares purchase

3. Applicants can receive coverage of 95% of the following clauses:

  • Technical assistance
  • Management contracts
  • Asset securitization
  • Capital market bond issues
  • Leasing
  • Services
  • Franchising
  • Licensing agreements

To verify the eligibility of the projects in the third group, MIGA requires additional discussions, so it is not 100% guaranteed that these clauses will receive coverage.


According to the latest studies, in 2020-2022, the most insured sectors with 88% of insurance issued are:

  • Electric Power Generation
  • Renewable Energy
  • Infrastructure
  • Financial Markets
  • Banking
  • Financial Services

If you sum up the biggest projects and look for a pattern, you will find the three most important characteristics of the project that can get a guarantee with a high likelihood.

They are:

  • Positive environmental impact
  • Positive social impact
  • Commercial base of the project and its financial viability

You can see the following features in a few recent projects, where MIGA provided a guarantee:

  • joint credit mechanism with EBRD that boosted the financing of six solar power plants in Egypt
  • investment in one of the leading mobile money providers in Sub-Saharan Africa
  • supported improvement to the road network in Kenya through projects with a public-private partnership program
  • a program of providing financing for SMEs by ProCredit Group
  • Banco Santander on their loan to the Ministry of Finance to support public hospital upgrading in the Bahamas
  • joint investment by Korea Water Resources Corporation and Hyundai Engineering in a Hydropower plant in the Solomon Islands


Certain features will prevent MIGA from reviewing your application if they find out during the investigation that you are involved in one of the following activities:

  • Illegal activity in the host country
  • Weapons and munitions-related activity
  • Alcoholic beverage-related activity (excluding wine and beer)
  • Tobacco related activity
  • Gambling, casinos, and equivalent enterprises
  • Activities related to radioactive materials (excluding special equipment)
  • Production or trade of unbounded asbestos fibers
  • Drift net fishing with nets over 2.5 km. in length


All the things we described above are routine staff and details. But someday, your insured event occurs. Of course, nobody wants it to happen, but this is why exactly you buy this insurance: to get coverage.

Therefore, you are interested in how this works today and whether it can apply to your project the way you want it.

There is a certain procedure that provides five steps to resolve a claim within the MIGA Insurance process.

  1. Investor as a Guarantee Holder sends a notification about the event which creates loss or increases the likelihood of loss
  2. MIGA starts the pre-claim procedure by consulting with the Guarantee Holder, the Government of the Host country, and other stakeholders for examination of the situation and/or discussing steps to minimize the size of claims
  3. The claims committee, a group of MIGA specialists who are appointed by the President of MIGA and chaired by the Chief Legal Officer, starts to gather all relative information to decide about the agency's liability to pay the claim
  4. Claims committee provides its recommendation about decisions to the President, who is the head of MIGA`s Board of Directors
  5. President decides to pay, deny, negotiate a settlement with the Guarantee Holder or proceed with the claim otherwise

MIGA should provide a decision about pay, denial, or other settlement of the claim no later than 180 days after receiving the complete Claim from the Guarantee holder.

So as we see, there can be 4 different ways where your claim can go:

  • MIGA agrees to pay you in full
  • MIGA completely denies paying the amount of the claim
  • MIGA initiates a negotiation to reduce the amount of the claim
  • MIGA provides an alternative claim resolution procedure

The key task of MIGA in claims resolution is to solve them at the pre-claim procedure so that such disputes do not become full-grown claims at all.

So you need to prepare that your claim will highly unlikely be covered in full. Moreover, this confirms by the statistics: among 800+ MIGA projects, only 9 claims were covered.

And there were 110+ successful pre-claims solutions!

You need to understand that this means that 9 projects under war and civil disturbances or expropriation products received coverage (without having an opportunity for successful negotiations under such types of products). But for all other product types, MIGA managed to approve pre-claim solutions under negotiations with local governments and other stakeholders. MIGA is successful during negotiations during the pre-claim stage of issue resolution due to the World Bank entity status.


MIGA is an instrument that provides one of the options for reputation guarantees and ensuring investment safety in Ukraine. Each investor looking at potential investment projects in Ukraine considers MIGA as one of the essential points during the preparation thanks to its developed set of processes, accessible principles, and opportunities.

We are sure that MIGA Insurance secures a reputable function of the project and provides an investor with guarantees. Nevertheless, we cannot ignore the efficiency of receiving insurance claims.

This is a topic of our future guides and articles. We are collecting a complete cycle of tips to describe the whole process of applying for MIGA Insurance, underwriting the guarantees, and cases of supporting insurance claims.

If you are ready to proceed with an application for the MIGA guarantee, you can rely on support from Leopolis Group

Our team of national experts can:

  • Assist your business during the insurance guarantee submission process
  • Provide ongoing consulting support during the whole period of project implementation

We will make sure to:

  • Prepare and submit the materials
  • Improve the project's Environmental and Social Impact
  • Increase the investment attractiveness of the project

If you have any questions, please get in touch with the Leopolis team: contact@leopolisgroup.com.

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