|Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature.|
This summary covers a guarantee for UniCredit Bank Austria AG’s (UBA) €200 million shareholder loan to its subsidiary, Zagrebačka Banka d.d. (ZABA) in Croatia. UBA has applied for a MIGA guarantee of up to $266 million for a period of up to eight years against the risks of transfer restriction, expropriation, and war and civil disturbance.
The shareholder loan is intended to improve ZABA’s asset-liability management by matching assets and funding of similar maturities. Consequently, the loan is designed to boost the structural liquidity ratio of ZABA’s balance sheet. The loan is part of a broader funding strategy of the UniCredit Group to refinance its subsidiaries and is particularly important in view of the current turmoil in financial markets worldwide, including Croatia.
The project is a Category FI under MIGA’s environmental review procedures.
MIGA supports this project in conjunction with the World Bank Group’s financial sector initiative framework as part of a coordinated international response to the ongoing global financial crisis. Croatia, like many other countries in the Europe and Central Asia region, is currently facing difficult fiscal adjustments along with the need for external financing. MIGA’s proposed support to the project would help Croatia’s financial sector by injecting liquidity into ZABA, boosting confidence in Croatia’s financial sector, and contributing to the improvement of the country’s financial stability.
One of the main objectives of the World Bank Group’s country partnership strategy for Croatia for 2009-2012 is strengthening the private sector led growth and accelerating convergence with the European Union. The proposed project is fully consistent with this objective.