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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 ATF Bank, Kazakhstan
Guarantee Holder UniCredit Bank Austria AG
Investor Country Austria
Host Country Kazakhstan
Sector Banking
Gross Exposure ($million) 190
Fiscal Year 2009
Status Proposed
Project Number 7948
Environmental Category FI
Date SPG Disclosed May 22, 2009
Project Board Date June 23, 2009

Project Description

This summary covers a guarantee for UniCredit Bank Austria AG’s (UBA) $200 million shareholder loan to its subsidiary, ATF Bank Kazakhstan. UBA has applied for a MIGA guarantee of up to $190.0 million for a period of five years against the risks of transfer restriction, expropriation, and war and civil disturbance.

The loan will improve ATF Bank’s asset-liability management through better matching of maturities in light of the shortage of long-term financing available in the Kazakh market. The loan is part of a broader funding strategy of the UniCredit Group to finance its subsidiaries and is particularly important given the current turmoil in financial markets worldwide, including Kazakhstan.

Environmental Categorization

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

Development Impact

MIGA’s proposed support for this project is in conjunction with the Financial Sector Initiative framework recently developed by MIGA as part of a coordinated international response to the ongoing global financial crisis.  MIGA’s support would play a critical role in facilitating adequate long-term cross-border flows from UBA into its subsidiary in Kazakhstan by providing liquidity, and will help Kazakhstan’s financial sector to stabilize. This shareholder loan will provide re-financing of existing liabilities in the Kazakh economy. The ultimate beneficiaries of this loan will be customers, mortgage borrowers, and municipalities in Kazakhstan.

One of the main objectives of the World Bank Group’s country partnership strategy for Kazakhstan is enhancing competitiveness and private business. The proposed project is fully consistent with this objective.

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