News Column

World Bank Body Eyes More Deals in Kenya

September 1, 2014

Constant Munda



WORLD Bank'sMultilateral Investment Guarantee Agency, is seeking to scale up involvement in the country beyond the energy sector.

MIGA's chief chief operating officer Michel Wormser told journalists after his day-long scouting visit on Friday evening that the agency was eyeing investment opportunities in transport infrastructure and agribusiness.

Miga is the World Bank Group's political risk insurance and credit enhancement guarantee arm.

Transport infrastructure and agribusiness form government's priority investment areas as it seeks to achieve a stubbornly elusive double-digit growth by 2017, and are set to continually receive tens of billions of shillings annually under the public private partnership model over the medium term.

Key infrastructural projects include the Sh 2.5 trillion ($28.41billion)Lamu Port South Sudan and Ethiopia Economic Transport (Lapsset) corridor, Kenya-Uganda standard gauge railway, the one million-hectare Galana-Kulalu irrigation project, Kenya-Uganda Crude oil pipeline, among other multi-billion projects in roads.

"We have also held talks with key government officials on how we can also provide a solution at the port(of Mombasa)," Wormster said. "We are not targeting only foreign investors coming in but also Kenyan businesses going out as they seek opportunities regionally."

The agency's presently notable involvement in Kenya is mainly insurance risk guarantees to the four independent power producers- Or Power geothermal project in Olkaria, Thika Power, Gulf Power and Triumph Power genwerating companies.

Wormster, also WB's vice president, said he held talks with top government officials including the National Treasury and key private sectors actors including top banks.

"Demand for insurance guarantees has increased and we have doubled our exposure in the region over the last four years," he said. "THe officials we met expressed a lot of appreciation to our support and proposal."

A statement by the bank said MIGA has since over the years from its inception in 1988 underwritten insurance guarantees amounting to $500 million(Sh44 billion) in Kenya with present exposure at $280 million(Sh24.64 billion).

"Our ongoing support to Kenya's energy sector is a strong demonstration of how the agencies of the World Bank Group can mobilize significant volumes of private sector investment to provide an essential service and be helpful in advancing the country's development agenda," Wormser was quoted in the statement.

The agency's support revolves around currency inconvertibility and transfer restrictions, expropriation, war, terrorism and civil disturbance, breach of contract and non-honouring of financial obligations.

Earlier in the week he had held similar talks with authorities in the south-neighbouring Tanzania and Zambia where he said MIGA was close on deal to scale up insurance risk support in agro-based industries.

Tanzania's exposure, Wormster said, was about $400 million(Sh35.2 billion).

MIGA is also involved in projects in Uganda, Mozambique, Nigeria and Mauritania.


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Source: AllAfrica


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