This summary covers a guarantee for UniCredit Bank Austria AG’s (UBA) $90.3 million shareholder loan to its wholly owned subsidiary, Closed Joint Stock Company UniCredit Bank Russia (UBRU). UBA has applied for a MIGA guarantee of up to $90.4 million for a period of up to three years against the risks of transfer restriction, expropriation, and war and civil disturbance.
UBA’s shareholder loan will help UBRU manage the balance of its assets and liabilities, maintain compliance with internal control requirements related to the liquidity crisis, and support UBRU’s growth and regional expansion plan. The loan is part of a broader funding strategy of the UniCredit Group to finance its subsidiaries and is particularly important in view of the current turmoil in financial markets worldwide including the Russian Federation.
The project is a Category FI under MIGA’s environmental review procedures.
One of the pillars of the World Bank Group’s country partnership strategy for the Russian Federation is sustaining and diversifying rapid growth. Under this pillar, one of the main objectives is to support the development of the country’s financial sector. The proposed project is consistent with this objective as the project will support private investment in various sectors through the availability of private sector credit at a time when it is becoming more constrained. A significant portion of UBRU’s lending activities support small and medium-size enterprises.