【联合国贸易发展委员会】嘲笑外国直接投资：政治风险保险-2025.2_17页_342kb

FDI Derisking and Political Risk Insurance (PRI) Summary

Core Content

Political risk insurance (PRI) plays a vital role in derisking foreign direct investment (FDI) in developing countries, particularly Least Developed Countries (LDCs), by mitigating real and perceived risks. These risks include political instability, currency restrictions, expropriation, and conflicts, which are exacerbated by climate change, geopolitical tensions, and supply chain disruptions. The growing importance of PRI is underscored by the need to bridge the investment gap in achieving the Sustainable Development Goals (SDGs) by mobilizing private sector finance.

Main Views and Key Information

1. Role and Significance of PRI

• PRI as a Derisking Tool: PRI is a critical mechanism for reducing investment risks, especially in structurally weak and vulnerable countries.
• Support for SDGs: It is essential for promoting FDI into SDG-related sectors, particularly in LDCs where investment risks are higher.
• Global Challenges: Climate change, geopolitical tensions, trade wars, and supply chain vulnerabilities have intensified investment risks, making PRI more important than ever.

2. Key Statistics on PRI

• Market Share: ECAs account for 78% of total PRI issuance, while multilateral institutions and private insurers account for 7% and 15%, respectively.
• LDCs and PRI: LDCs represent 15% of projects covered by PRI but receive 28% of FDI in these countries, compared to 6% in developing countries and 2% in developed countries.
• FDI Coverage: Between 2019 and 2023, the majority of PRI coverage was directed towards manufacturing (20%), infrastructure (19%), natural resources (14%), and non-renewable energy (14%), with renewable energy projects receiving only 4%.

3. Sectoral Distribution

• Dominant Sectors: Manufacturing, infrastructure, and natural resources are the most common sectors covered by PRI.
• Renewable Energy: Despite commitments to phase out fossil fuel support, renewable energy projects received only 4% of total PRI coverage, showing a misalignment between policy goals and actual resource allocation.
• Sectoral Shifts: Some public providers have introduced sectoral restrictions to align with climate commitments, such as excluding coal projects.

4. Geographical Distribution

• Asia: The largest recipient of PRI, with China, Kazakhstan, Indonesia, Pakistan, and Viet Nam leading in coverage.
• Africa: Receives the most PRI from multilateral institutions, though LDCs in Africa, such as the Democratic Republic of the Congo and Egypt, are significant recipients.
• LDCs: While not the largest recipients, LDCs are the most heavily insured relative to FDI inflows, with a ratio of 28% compared to 6% in developing countries and 2% in developed countries.

5. Providers of PRI

• Bilateral Providers: Mainly ECAs and private insurers, with ECAs being the largest contributors, accounting for 68% of new PRI in 2023.
• Multilateral Providers: MIGA is the principal multilateral insurer, increasing its share of PRI coverage in LDCs from 8% to 27% over the past 15 years.
• Private Insurers: Play a smaller role, with their coverage mainly focused on developed markets.

6. Trends and Challenges

• Market Growth: The PRI market saw a steady growth from 2006 to 2010 (CAGR of 6%) and from 2011 to 2015 (CAGR of 11%), but declined from 2019 to 2023 (CAGR of -3%).
• Methodological Adjustments: A significant provider changed its reporting methodology in 2018, which affected comparisons.
• Investor Preferences: Political risks are a major concern for investors, especially in Africa, where over 80% of surveyed investors cited them as a key obstacle.
• Policy Gaps: Despite pledges by G7 and OECD countries to phase out fossil fuel support, fossil fuel projects still receive more than three times the PRI coverage compared to renewable energy.

Conclusion

The role of PRI in supporting FDI to developing countries and LDCs is crucial, especially in the context of achieving the SDGs. While ECAs dominate the market, multilateral institutions and private insurers also play important roles, particularly in supporting LDCs. However, the sectoral and geographical distribution of PRI coverage highlights a need for more strategic alignment with sustainable development goals and climate commitments. Enhancing the role of PRI requires addressing challenges such as limited capacities of multilateral institutions and the need for better policy coordination to ensure effective risk mitigation and investment promotion.