Brookings Institution June 13, 2014
Japanese Outward FDI - by FDI stock (in USD millions) Canada $14,474 1% 5% Netherlands United $94,193 Kingdom $53,812 9% 9% 2% China USA Japan $92,967 $285,767 Korea $25,526 1% 1% 28% Vietnam $8,393 India 1% 1% $15,067 Rest of Africa 2% Indonesia $18,378 $ 6,874 Malaysia $13,277 3% 6% 0% Brazil South Africa Australia $35,308 $ 2,443 $61,181 Base line: total Japanese Outward FDI by FDI stock: 1,037,698 Source: UNCTAD 1 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Top Developing Country Destinations for Japanese OFDI – Net Cumulative 3 (2010-2012) in USD millions 1000 40000 937 35589 35000 800 699 30000 600 25000 20000 400 16573 15000 9828 200 10000 154 7879 7813 5000 19 17 9 7 7 4 4 2 1 0 1850 0 -1 -9 0 China Brazil Thailand Indonesia India Africa -200 Source: UNCTAD 2 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
MIGA’s Experience in Africa New Issuances by Region (US$ billion) MIGA’s Regional Support for Japanese Clients (US$ million) 3 2.78 Middle Africa East 2.56 0.07 Latin America & 21.5 48.1 the Caribbean 2.5 0.20 0.54 Europe &Central Asia 0.35 1.89 Asia & the 150 2 0.49 Latin America & Pacific the Caribbean 1.46 0.83 1.5 1.08 Asia & the Pacific Africa 0.31 1 1.08 351 1.67 0.55 0.5 0.87 0.34 0.24 0 FY10 FY11 FY12 FY13 3 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Projects Currently Supported by MIGA Seawater Desalination Doraleh Container Active projects in Africa Project Terminal - Ghana, Water, 2012 - Djibouti, Transport, 2007 - USD 180Mn, up to 20yrs - USD 430Mn, 10yrs - Equity, Debt, Swap - Equity, Debt, Swap - WCD, TR, Expro, BOC - WCD, TR, Expro, BOC HKB Bridge in Abidjan Olkaria GeoThermal Power in Kenya - Ivory Coast, Transport, 2012 - Kenya, Power, 2011 - USD 145 Mn, 15yrs - USD 99Mn, 15yrs - Equity & Debt - Equity - WCD, TR, Expro, BOC - WCD, TR, Expro Azito Power Plant Chobe Agrivision Company - Ivory Coast, Power, 2012 - Zambia, Agribusiness, 2013 - USD 116 Mn, 20yrs - USD 50Mn, 15yrs - Equity - Equity - BOC - WCD, TR, Expro, BOC As of May 31 st 2013 4 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Africa – Outlook and Opportunity Higher growth, high returns Average growth rate of 5% for the last decade, even in the face of global crisis, with projections of the same 2010 UN estimated returns on US FDI in Africa at 20%, compared to 14% in LAC and 15% in Asia Fastest growing population globally, expected to double in 40 years Infrastructure needs…and opportunities for private sector on their own or in PPPs Huge needs for infrastructure in power, transportation, and schools US$45bn spent on infrastructure annually. Huge funding deficit - US$90-100 billion a year is needed Operations and maintenance… 5 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Japanese Investors bring potential O&M efficiency to the table Funding Current Sources of Efficiency Gap Financing Gap $45 billion Not only do Japanese partners play an Government important role in Funding terms of funding 65% but also on tackling the $ 31 billion $17 billion efficiency gains ODA … 14% Private Sector Through Funding operations and management 21% gains $93 billion in funding needs 6 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
Risks Covered by MIGA Transfer restriction & currency inconvertibility Political Risk Expropriation Insurance War & civil disturbance (PRI) Breach of contract + Sovereign Credit Risk Sub-sovereign State-owned enterprise 7 MULTILATERAL INVESTMENT GUARANTEE AGENCY WORLD BANK GROUP
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