• 01.07.2024
  • Ecological justice
  • Array

This new report takes a closer look at the Multilateral Investment Guarantee Agency’s (MIGA) support of investments in energy projects, and finds continued MIGA support for fossil energy.

Its publication by Recourse, Big Shift Global, Coastal Livelihood and Environmental Action Network, and Lumière Synergie pour le Développement coincides with the launch of the World Bank Group’s guarantee platform under MIGA and the anniversary of the implementation of the Bank’s Paris alignment methodology.

Although MIGA is smaller compared to the other agencies in the WBG, its role has been undoubtedly important in making private investments possible even in environments risky for businesses as well as for human rights. Its role is likely to grow as the G20-informed international architecture reform agenda looks for “innovative finance” to crowd in private sector investments.

In the context of MIGA’s political risk insurance, public money is used to protect private investors’ investments when public finance is needed to meet the needs of the public.

MIGA-supported investments in energy projects are mostly large-scale and higher-risk projects that can have large and long-term impacts on the environment and communities compared to small-scale distributed energy projects that directly target energy access for communities.

From FY 1994 to 2023, MIGA supported more fossil energy projects compared to non-fossils. Examples of these fossil energy investments are the Myingyan gas power plant in Myanmar and the Bhola-2 gas power plant in Bangladesh. Both of these fossil gas plants pose risks of greenhouse gas (GHG) lock-in and have caused negative social and environmental impacts on communities.

The current WBG reform discussion is an opportunity for MIGA to align its policies and activities with the 1.5℃ goal of the Paris Agreement by quitting fossil fuel projects and instead channelling funds to facilitate the just energy transition. Towards this, the MIGA must:

  • stop insuring fossil fuel projects, including fossil gas.
  • prioritise small scale, distributed energy projects that ensure renewable energy access for women and communities living in poverty.
  • ensure transparency and accountability for guaranteed investments, including in renewable energy.
  • ensure that the rights of communities, especially women and other marginalised groups are upheld and protected.

Read the report here