The Multilateral Investment Guarantee Agency (MIGA), which is a member of the World Bank Group, has said that it would be supporting a new investment that will provide state-of-the-art telecommunications services in Afghanistan. The guarantee, which is of the amount US$ 76.5 million in coverage, will protect the investment against the noncommercial risks of transfer restriction, and expropriation.
The MIGA-backed project, totaling US$ 85 million, which represents a third of total flows of foreign direct investment (FDI) into the country from March 2006-2007 (the Afghan calendar year), according to IMF estimates. This is the fourth investment guaranteed by MIGA in Afghanistan. Afghanistan began an enormous political, economic, and social transformation in 2002, after more than two decades of conflict. Despite some early gains, tremendous challenges remain. The World Bank Group is an important player in conflict-affected countries, and MIGA's non-commercial risk guarantees are designed to encourage FDI (foreign direct investment) to promote economic development in countries like Afghanistan. Foreign direct investment can have a strong, positive impact on rebuilding conflict-affected countries, bringing much-needed private capital and jobs, developing local skills, and stimulating spin-off industries. Since Afghanistan became a member of MIGA in 2003, MIGA's risk mitigation tools have been playing an important role in securing investments that have a positive development impact in the country. The investments we support also send a signal to others that it is safe to do business with the appropriate mitigation of risks. The Afghanistan Investment Guarantee Facility (AIGF), administered by MIGA, is guaranteeing a portion of the investment. The facility is sponsored by MIGA, DFID, and the Islamic Republic of Afghanistan, through a credit from the International Development Association (IDA) and a concessional loan from the Asian Development Bank.