Foreign investors interested in opening up businesses in Pakistan can offset potential non-commercial risks to their investments with the help from the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group. That was the key message of a business roundtable held on Saturday here, said a press release here.
The event, hosted by the Institute of Bankers, Pakistan (IBP) drew representatives from about 10 leading banks and financial institutions. Kicking off the event were Board of Investment (BoI) Director General Arif Elahi, SBP governor's Adviser on development finance Azhar Iqbal Kureshi, and Institute of Bankers, Pakistan (IBP) Chief Executive Muhammad Saleem Umer.
Inaugurating the roundtable discussion, Kureshi stressed the importance of foreign direct investment for the economic development of Pakistan and the importance of MIGA in providing guarantee for such investments, particularly in large infrastructure projects.
Muhammad Saleem Umer welcomed MIGA's initiative to share with Pakistani bankers how the agency's political risk instruments can play an important role in security foreign direct investment in developing countries, including Pakistan.
Foreign direct investors can play a critical role in reducing poverty by building roads, providing clean water and electricity, and above all, providing jobs. But foreign direct investment into developing countries is often inhibited by concerns about political risks.
The government cannot shoulder the burden-financially or technically-of addressing the country's development needs alone. The private sector can help economies grow and avert the need for governments to use funds better spent on acute social needs.
Speaking at the event, MIGA Chief Counsel Srilal Perera and Investment Officer Hal Bosher discussed how MIGA gives private investors the confidence and comfort they need to make sustainable investments in developing countries by providing political risk insurance; technical assistance; and dispute mediation services.
"MIGA is committed to promoting socially, economically, and environmentally sustainable projects," said Perera.
"A MIGA-supported project is already helping in developing a more efficient telecommunication infrastructure in Pakistan," he said. "MIGA has provided Orascom Telecom Holding SAE of Egypt a guarantee for $79 million to cover its $88 million equity investment in Pakistan Mobile Communications Limited."
Perera also highlighted the improved financial terms encouraged by MIGA's coverage, including better access to project finance, lower borrowing costs, and longer loan tenors.
MIGA can also help Pakistani entrepreneurs minimise risk while investing in other developing countries. Investment Officer Hal Bosher spoke about opportunities for Pakistani investors in Afghanistan. In the past one year, MIGA has supported three projects in Afghanistan, including a pharmaceutical manufacturing plant, a microfinance project, and a cotton ginning project. All three projects were underwritten under the agency's Small Investment Program.
"We at MIGA are able to cater to the different risk preferences and unique needs of both large, complex transactions and small investments," said Bosher.
"Our Small Investment Program is tailored to provide a flexible and competitive political risk insurance product tailored to the needs of small investors".-PR
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