The Multilateral Investment Guarantee Agency in Washington provided a record $2.1 billion of guarantees in the year through June last year, which may jump another 14 percent this fiscal year, said Edith Quintrell, MIGA’s director of operations. A lack of global climate-protection laws after 2012 may be curbing demand, Quintrell said in a phone interview on May 7. “Right now we don’t see a flood of inquiries” from climate-finance investments, she said. “We have capacity to do more. We could do $3 billion a year” without raising new capital, she said.
The agency has expanded guarantees into new countries, including projects in the Republic of Congo, Iraq, Kosovo and Liberia. Insurance for climate-protection projects is one of several risks MIGA covers, and includes geothermal and hydroelectricity generation, as well as a plant that captures heat-trapping methane gas at a landfill in San Salvador, El Salvador. MIGA doesn’t specify what portion of its guarantees are for climate-related projects.
The guarantees for the San Salvador project cover risks of expropriation, war and civil disturbance, and breach of contract, including any failure of the Salvadoran government’s commitments under a letter of approval for the Certified Emission Reductions under the Clean Development Mechanism of the 1997 Kyoto Protocol, according to MIGA’s website.
“It’s a fantastic facility, but must be better utilized,” Sean Kidney, London-based executive chairman of the Climate Bonds Initiative in London, said April 30 by phone. “If we are not using every cannon we have at this point, then there is something wrong.” His group in November set a quality standard for debt securities that may help expand the class of assets to be known as climate bonds...
Charles Simms, March 17, 1796, Fire Insurance Policy
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