CLASS NOTES 24062022 Dr.

Bagenda

DIFFERENCE BETWEEN IDA AND IFC LOAN AGREEMENT

IDA has not much on default and repayment. They are more pronounced on
ensuring that the project happens.

IDA primary concern is to ensure that the project happens

IFC is more particular about default and repayment. It is less concerned with
project happening.

IFC primary concern is to ensure that the loan is repaid.

MIGA

It is the WB entity that under writes investments in countries with political

Article 2 of MIGA Convention:

It provides guarantees against non commercial risks

Article 11 (a) of MIGA Convention: Covered risks are losses arising from:

i. Currency transfer restrictions by host government

ii. Expropriation and Similar Measures by host government
iii. Breach of Contract by host government
iv. War and Civil Disturbance

Article 11 (c). risks not covered by MIGA.

i. Any host government action or omission to which the investor agreed

ii. Any event before the conclusion of the agreement

Article 12 eligible investments:

a. Eligible investments include

 equity interests/portfolio investment (buying shares in an existing
company) and
 foreign direct investment (you go and set up the new entity).

c. You should apply for the guarantee before you set up the investment. Once
the investment is set up, you can’t go to MIGA for guarantee.

d. In guaranteeing an investment, the Agency considers:

i. The economic soundness of the investment and its contribution to the
development of the host country;

(ii) Compliance of the investment with the host country's laws and regulations;
(iii) Consistency of the investment with the declared development objectives
and priorities of the host country; and

(iv) The investment conditions in the host country, including the availability of
fair and equitable treatment and legal protection for the investment.

Article 13 Eligible Investors (who can go to MIGA?)

a. Any natural or juridical person provided that:

i. Such natural person is a national of a member other than the host
country;
ii. Such juridical person is incorporated and has its principal place of
business in a member or the majority of its capital is owned by a
member or members or nationals thereof, provided that such
member is not the host country in any of the above cases; and
iii. Such juridical person, whether or not it is privately owned,
operates on a commercial basis.

(c) if you are a national or company incorporated in the host country but
the money/assets are from outside (another WB member) then you
qualify. Eg a Ugandan co whose bulk of resources comes from South
Africa qualifies.

Article 14. Host country must be a developing member country. Per

WB’s list of developing countries.

Article 15 You cant get MIGA guarantee unless the host country
approves

Article 18 Subrogation. Once you are indemnitfied you relinquish your

rights to MIGA.

MIGA INDEMNITY AGREEMENT

B of recitals says it guarantees against political force majeure

ICSID CONVENTION

Preamble: As a lawyer, any investment agreement should involve a

dispute resolution clause referring to ICSID
Article 1 The purpose of the ICSID shall be to provide facilities for
conciliation and arbitration of investment disputes between Contracting
States and nationals of other Contracting States in accordance with the
provisions of this Convention.