OUR IMPACT
Europe and Central Asia
Economic growth slowed sharply last year in Europe and Central Asia, as Russia's invasion of Ukraine, a surge in inflation, and the sharp tightening of monetary policy and financing conditions hit private consumption, investment, and trade. The marked increase in food and energy prices boosted inflation to a pace not seen in 20 years.
In FY23, MIGA's new guarantees issued in the region amounted to $1.7 billion in support of 18 projects.
This included guarantees issued towards three capital optimization projects in Kosovo, Montenegro and Serbia, three PRI guarantees with respect to an energy project in Türkiye, and a NH guarantee for a road transit project in Serbia.
EXAMPLES OF MIGA-SUPPORTED PROJECTS IN Europe and Central Asia
MIGA & EBRD Strengthen Commitment to Cooperation
In February 2023, MIGA and the European Bank for Reconstruction and Development (EBRD) announced a landmark agreement in which MIGA will issue up to $200 million in trade finance guarantees to EBRD to support trade transactions conducted through state-owned banks in emerging market and developing economies, with Ukraine being the first country to benefit from this support.
The MIGA guarantees, which will be issued over a period of up to six years, will serve to increase EBRD capacity in select markets by covering the risk of non-payment by state-owned banks. MIGA is working with EBRD’s Trade Facilitation Programme (TFP) which seeks to facilitate international trade to, from, and within Central and Eastern Europe, the Commonwealth of Independent States (CIS), and the Southern and Eastern Mediterranean region. Under the TFP, guarantees are provided to international commercial banks to cover the political and commercial payment risk of transactions undertaken by issuing banks in the EBRD’s countries of operations.
Türkiye
Over the past few years, MIGA issued guarantees of about $119 million to Sojitz Hospital PPP Investment B.V. of the Netherlands for an equity investment and shareholder loan into the Istanbul Ikitelli Integrated Health Campus Project (later renamed Başakşehir Çam & Sakura City Hospital) in Türkiye. The guarantees, available for up to 20 years, provide coverage against the risks of transfer restriction, expropriation and breach of contract.
In Türkiye, MIGA’s project helps improve access to high-quality health services for 2.2 million people through the construction of new facilities, as well as the replacement of inadequate infrastructure.
Bosnia & Herzegovina and Serbia
In December 2022, MIGA signed additional guarantees of up to €480 million (approximately $509 million) with Austria-based Raiffeisen Bank International AG (RBI) to cover equity investments in its subsidiaries in Bosnia & Herzegovina and Serbia.
The guarantees will allow a key lending institution in the region to optimize its existing capital at a time of economic stress and uncertainties, enabling the subsidiaries to expand local lending – stimulating economic growth, supporting job preservation and creation, and ultimately contributing to reduced poverty and greater shared prosperity in the two nations.
