Purpose of the RMI database
The ASEAN-OECD Risk Mitigation Instruments Database allows policy makers, project sponsors and lenders to quickly ascertain instruments available to facilitate private infrastructure investment in Southeast Asia. These instruments, like insurance and guarantees, enable private stakeholders to reduce or mitigate commercial and political risks in private investments.The database further covers government interventions by Southeast Asian governments to improve the investment climate for private infrastructure investment.
The database presents information on instruments serving to transfer: political risks; commercial risks; and comprehensive risks; complemented by an overview of government interventions to facilitate private infrastructure investment in Southeast Asia.
Providers of insurance and guarantees
The database focuses on private insurance companies, bilateral and multilateral agencies issuing insurance and guarantees covering commercial and political risks.The included bilateral agencies derive from the 10 main source countries of Foreign Direct Investment (FDI) to Southeast Asia such as: Australia, Canada, China, India, Japan, Republic of Korea, the United States and the EU countries France, Germany and the U.K. The overview is expanded by bilateral agencies located in Southeast Asia countries and major multilateral agencies active in the region such as the World Bank Group and the ADB.Information on several private insurance companies complement the database.
Financial instruments such as political risk insurance, political risk guarantees and credit guarantees enable investors and lenders to mitigate political risks. These instruments transfer risks to a third party specialised in assessing and pooling risks, in return for a premium. Third parties include private insurance companies, bilateral and multilateral agencies.
Financial instruments, such as insurance and guarantees, enable private sector stakeholder to mitigate commercial risks. The transfer of most commercial risks via financial instruments is limited in coverage or tenor.
Governments could incentivise private investment in infrastructure projects through direct and indirect interventions. These interventions could support establishing a vivid PPP market, especially in countries with limited or no track record of successful PPP projects.