Foreign Investment Cover

Abstract

The ECA cover for foreign investments is insurance or a guarantee provided to an investor for a loss of investment made in a foreign country, resulting from expropriation, nationalisation, war, riots, civil disturbances, restrictions on transfer of funds and other political events. The contractual parties in an investment contract are the investor and the recipient of the investment. The recipient is called the investment project and it can be a company, enterprise or other form of business activity. The country where the investment is made and where the investment project is located is called the host country and it is different from the investor’s country. The ECA cover for foreign investments is limited to losses caused by political events only and commercial events such as insolvency, bankruptcy or underperformance of the investment project are not included in this type of cover.