The agency is providing reinsurance for the Overseas Private Investment Corporation’s (OPIC) political risk insurance policy to Apache Corporation and its subsidiaries for investments in Egypt. MIGA’s provision of long-term reinsurance to OPIC will allow Apache, an oil and gas exploration and production company, to maintain its insurance coverage after the private insurance market partially withdrew from Egypt following the recent political unrest.
MIGA is providing reinsurance of $150m to OPIC for its $300m coverage to Apache, held by the company since 2004. The reinsurance will be provided for an additional 13 years, against the risks of expropriation and breach of contract.
Apache is a critical contributor to Egypt’s oil and gas sector, supporting nearly 4,000 jobs. The oil and gas sector represents 25% of the government’s fiscal revenues and accounts for nearly 70% of foreign direct investment. The company is projected to invest as much as $1bn per year over the next few years toward further exploration and development of existing and new petroleum prospects.
“Our cooperation with OPIC is allowing Apache to maintain its significant investment program and its operations during a challenging and turbulent time,” says Izumi Kobayashi, MIGA’s Executive Vice President. In parallel, the World Bank is providing technical assistance to the government to support energy sector reform efforts.
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