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Law, risk and finance for energy infrastructure investment in developing economies

In response to the growing demand for energy infrastructure investment in both developed and developing countries, experts convened at Queen Mary’s Centre for Commercial Law Studies, University of London, 26 January, to deliberate the commercial and political risks and mechanisms for mitigation.

As the global economy recovers from financial instability, there has been an increased trend in infrastructure investment over recent years, however investors seeking opportunities in developing economies, notably the energy sector, face increasing challenges also.

Many emerging and developing economies have been affected by liquidity issues, conflict, and violence; these issues only serving to restrict the movement of much-needed private capital to these regions.

The conference, titled “Law risk, & finance: time to rethink for the energy sector”, attracted over 75 attendees, comprising students, policy-makers and practitioners in a session that illustrated the growing importance of risk mitigation through political risk insurance instruments and contributed to greater global awareness of the benefits of such risk mitigation tools in promoting foreign investment in infrastructure development

The elusive nature of risk was examined through reviews of case-studies from Indonesia, Bulgaria, Pakistan and other African states.

These case-studies outlined the increasing challenges faced by sponsors investing in the energy sector, including risks relating to expropriation, breach of contract and war, and civil disturbance.

Speakers were drawn from diverse backgrounds and had varied opinions on the topic.

Shamali F. De Silva, Senior Counsel at the Multilateral Investment Guarantee Agency (MIGA), an agency of the World Bank Group; Mr. Shah Jahan Mirza (Managing Director, PPIB-Pakistan); Rafael Molina (Managing Partner, Newstate Partners); and Mahnaz Malik (Barrister, 20 Essex Street Chambers), Edmondo Perrone (Legal Counsel, European Investment Bank) among others, featured on the agenda for the day. 

The unique status of MIGA as a treaty based multilateral organization provoked much-appreciated discussion over MIGA’s role in mitigating political, commercial, and environmental risk in infrastructure development.

The conference was organised through funding from the Economic Social Research Council (ESRC), by Ahmed Abdullah Khan (University of Warwick, School of Law), Professor Raphael Heffron (Queen Mary, University of London), and Professor Dalvinder Singh (University of Warwick).

A detailed report covering the outcomes of the event will be published in a leading journal.