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Summaries of proposed guarantees are provided prior to Board consideration and final contract signing, and therefore are subject to change. Project briefs are disclosed after contract signing and do not reflect subsequent modifications (e.g., changes in guarantee amount).
Project Name Closed Joint Stock Company UniCredit Bank Russia
Guarantee Holder UniCredit Bank Austria AG
Investor Country Austria
Host Country Russian Federation
Sector Banking
Gross Exposure ($million) 95
Fiscal Year 2009
Status Proposed
Project Number 7583
Environmental Category FI
Date SPG Disclosed October 13, 2008
Project Board Date October 28, 2008

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.

Environmental Categorization

The project is a Category FI under MIGA’s environmental review procedures.

Development Impact

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.

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