Political Risk Cover A Slow Starter In India: Miga

MIGA, a member of the World Bank group which offers political risk insurance for projects being set up in developing countries, has yet to finalise a guarantee contract for any project in India.

The multilateral agency was close to finalising insurance cover for a couple of power projects in India earlier this year, but the contracts were apparently stalled because of miscommunication with the Indian government.

We have a very rapidly increasing backlog of applications on India, MIGA vice-president, guarantees, Leigh Hollywood said.

He said the agency had received 42 preliminary applications to insure ventures in India.

Of these, four, including at least two power projects, are in the final stages of seeking approval.

 

MIGA executive vice-president Akira Iida said there had initially been considerable interest in seeking political risk insurance cover in India, but international interest cooled after the well-publicised Enron controversy. Everybody went into a watching mode, he said, noting that applications had subsequently picked up pace.

But he also pointed out that there was some reluctance within India to accept the need for non-commercial risk insurance. Both the public sector and private sector say India does not have any political risk and is enjoying a flood of investment, Iida said, replying to questions at a press briefing to release the agency