MIGA covers RI risk

MIGA covers RI risk

WASHINGTON (Dow Jones): The Multilateral Investment Guarantee
Agency, MIGA, will resume providing political risk insurance
coverage for foreign direct investment in Indonesia, MIGA said in
a press statement on Wednesday.

MIGA, part of the World Bank, decided to offer the insurance
after the Indonesian government agreed to reimburse MIGA for a
$15 million insurance claim paid out to Enron on a canceled power
project last year.

"Indonesia's economic environment has shifted significantly
since Enron entered into this venture, and the project was caught
up by larger forces in the country's power sector that affected
other sponsors and insurers as well," Luie Dodero, MIGA's general
counsel and World Bank Group vice president.

"While we understand the circumstances that led to the
project's suspension, international law dictates that the
cancellation be compensated," Dodero said.

The claim was the first ever for MIGA. The project involved a
500-megawatt power plant near Surabaya, Indonesia, one of many
suspended by presidential decree in 1997 in response to the
country's economic crisis.