With donor funding constrained and domestic capital markets not fully developed, the world is looking toward private sector investment to remedy Africa’s huge infrastructure deficit. The role of multilaterals and development finance institutions is transitioning from financiers to mobilizers and risk “mitigators”—leveraging their involvement by allowing countries to unlock access to private finance.

As a risk mitigator, the Multilateral Investment Guarantee Agency (MIGA) plays a significant and increasingly critical role. MIGA’s exposure in Sub-Saharan Africa more than doubled in the last four years. For the fiscal year ending June 30, 2013, MIGA issued $1.5 billion in coverage for investments throughout Sub-Saharan Africa, and $1.3 billion of this coverage was for projects in the energy sector. Countries such as Côte d’Ivoire, Kenya, and Uganda have experienced significant progress in this sector due in part to MIGA guarantees.

Côte d’Ivoire

In Côte d’Ivoire, a MIGA guarantee of $116 million is providing breach of contract cover for the conversion of the Azito thermal power plant from simple-cycle to combined-cycle, increasing total capacity from 290 to approximately 430 megawatts.

MIGA is also supporting Foxtrot International’s oil and gas production platform, which supplies Azito and other plants in the country, by covering the equity investment by SCDM Energie and debt from HSBC. The World Bank’s International Development Association (IDA) is also providing a partial risk guarantee to back the government’s payment obligations to the company under a gas supply and purchase agreement.


In Kenya, the government is implementing its ambitious “least-cost power development plan,” which calls for an increase in the number of independent power producers and a more diversified and reliable energy mix.

This year, MIGA provided $102.5 million in breach of contract cover to the Industrial and Commercial Bank of China and Standard Bank of South Africa for their long-term commercial financing to Triumph Power Generating Company Limited. MIGA’s support for Triumph is complemented by an IDA partial risk guarantee.

MIGA is also providing coverage for Thika Power Limited and Olkaria III, Kenya’s first geothermal independent power producer.


In Uganda, the Bujagali hydropower project is key to the country’s plan to increase access to electricity. The dam, commissioned in 2012, is already meeting almost 50 percent of the country’s electricity needs. The project is sponsored by a consortium of Sithe Global Power of the United States and the Aga Khan Development Network. A partial risk guarantee from IDA is covering commercial lending of $115 million from Standard Chartered and Absa banks, while MIGA is providing 20-year breach of contract cover of $120 million to Sithe subsidiary World Power Holdings.