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Projects

Summary of proposed guarantee

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. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
Raiffeisen Bank AVAL
Project ID
11740
Fiscal year
2013
Status
Active
Guarantee holder
Raiffeisen Bank International AG
Investor country
Austria
Host country
Ukraine
Environmental category
FI
Sector
Banking
Date SPG disclosed
May 23, 2013
Project Board date
June 11, 2013
Gross exposure
 $142.5 million
Project type
Non-SIP

Project description

This summary covers a loan guarantee by Raiffeisen Bank International AG (RBI) of Austria issued in support of funds raised by its Ukrainian subsidiary Raiffeisen Bank AVAL (RBAV). RBI has applied for a MIGA guarantee of up to $142.5 million for a period of up to eight years against the risks of transfer restriction and expropriation of funds.

MIGA’s coverage would assist RBI in its efforts to continue providing support to its subsidiary without breaching its internal and regulatory country exposure limits.

Environmental Categorization

The project is a category FI under MIGA’s Policy on Social and Environmental Sustainability.

Development Impact

The state of Ukraine’s economy continues to remain delicate in the aftermath of the 2008 financial crisis as a result of spillover effects from its euro-zone neighbors.

The proposed project would bolster the capital base of a systemically important bank, strengthening the banking sector in Ukraine in a difficult macroeconomic environment.

RBAV provides new credit to the economy—in particular to corporates, farms, and small and medium enterprises that create jobs and foster economic activity and growth.

MIGA’s guarantee to the proposed project is fully consistent with the World Bank Group’s Country Partnership Strategy for Ukraine that calls for job creation and the attraction of foreign direct investment to improve productivity and international competitiveness. It is also consistent with the goals of the Vienna 2 Initiative for countries of Central, Eastern and Southeastern Europe—through which MIGA seeks to support Western banks active in the region.

 
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