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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
Porsche Leasing Ukraine/ Porsche Mobility
Project ID
11464
Fiscal year
2014
Status
Active
Guarantee holder
Porsche Corporate Finance GmbH
Investor country
Austria
Host country
Ukraine
Environmental category
C
Sector
Financial Services
Date SPG disclosed
August 05, 2013
Project Board date
September 05, 2013
Gross exposure
 $47.9 million
Project type
Non-SIP

Project description

This summary covers shareholder loans by Porsche Corporate Finance GmbH of Austria to Porsche Mobility TOV (PM) and Porsche Leasing Ukraine TOV (PL), in Ukraine. The investor has applied for a MIGA guarantee of $47.9 million for a period of up to 15 years against the risks of transfer restriction, expropriation, and war and civil disturbance.

The project will refinance the subsidiaries’ activities and support their growth in Ukraine in an environment of limited liquidity. PL and PM provide financial services (automotive leasing and loans) mostly for micro, small, and medium enterprises (MSMEs) and individuals who typically would not otherwise qualify for bank loans or would find them unaffordable.

Environmental Categorization

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

Development Impact

The euro-zone crisis has had a severe impact on domestic banks in Ukraine and the sector is still facing challenges. A high non-performing loan ratio makes access to new financing particularly onerous as high interest rate levels and collateral requirements are especially challenging for MSMEs and individuals to qualify for fresh credit lines. The proposed project supports the development of the private sector in Ukraine by providing affordable finance in the form of leasing and loans to businesses and individuals.

The proposed project is consistent with the World Bank Group’s Country Partnership Strategy for Ukraine, which emphasizes the need to attract FDI to improve productivity and create new jobs in the private sector. It also aims to contribute to the World Bank Group's strategy of providing targeted financing for SME's

 
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