In an interview with Reuters, Yukiko Omura, executive vice president of the bank's Multilateral Investment Guarantee Agency, said she wants MIGA to play a bigger role in markets like the Middle East, where risks of doing business are perceived to be high, which deters investors.
Established in 1988, the agency promotes foreign direct investment in developing countries by guaranteeing the safety of investments through political risk insurance. Its presence is seen as a signal by other investors to follow suite.
Omura said privatisation programs, reforms that increasingly recognise the role of the private sector and recently negotiated free trade agreements, have stoked the interest in the Middle East, mainly from companies and banks in Asia and Europe.
Many oil exporting countries in the region, flush with cash from higher oil prices, were looking to expand out of their oil bases and seeking opportunities elsewhere in the region.
Omura said investors had expressed interest during meetings with MIGA in projects in Iraq, which is not a MIGA member but has been in talks about joining.
"The business environment, policy reform and increasing opportunities for private investment are making the Middle East an increasingly attractive destination for us," Omura said in a recent interview.
"But perceptions of political instability, particularly in certain countries, can inhibit these types of investments and this is where MIGA's guarantees are extremely relevant," she added.
MIGA's activities in the Middle East are small compared to other regions. At the end of fiscal 2005 its gross guarantees exposure in the region was $154 million, or 3 percent of its outstanding portfolio.
The agency's biggest guarantees exposure - $2.3 billion - is in Europe and Central Asia, including former Soviet states.
With many investors wary of potential risks, Omura has proposed a guarantee facility for countries emerging from conflict in Africa and a program for small businesses.
She said countries attracted considerable donor assistance once conflict ends but aid eventually slowed, making private investment critical for reconstruction and growth.
As head of the agency since last May, Omura said her biggest challenge was getting MIGA and its products better known among global investors.
The agency has had its share of controversial projects, including concerns by environmental groups about its backing of the West African oil pipeline in Ghana and the Nam Theun dam project in Communist-run Laos.