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Project Brief

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 Leasing Aval LLC
Project ID
Fiscal year
Guarantee holder
Raiffeisen Zentralbank Österreich AG
Investor country
Host country
Environmental category
Date SPG disclosed
October 10, 2008
Project Board date
October 28, 2008
Gross exposure
 $142.5 million
Project type

View Summary of Proposed Guarantee

MIGA has issued a guarantee of $142.5 million covering Raiffeisen Zentralbank Österreich AG’s (RZB) $150 million shareholder loan to its leasing subsidiary in Ukraine, Raiffeisen Leasing Aval LLC (RLAV). The coverage is for a period of up to seven years against the risks of transfer restriction and expropriation of funds.

RZB’s shareholder loan will enable RLAV to respond to rapidly growing demand for leasing products in Ukraine. RLAV will use the proceeds of the shareholder loan to  support its leasing portfolio of equipment and machinery to Ukrainian enterprises across various sectors. A substantial part of this funding is expected to benefit small and medium-sized enterprises (SMEs) and support investments in agriculture. The SME sector is an underserved segment of the Ukrainian market as they often do not qualify for bank financing and lack the capital to purchase fixed assets to grow their businesses. RZB’s shareholder loan is also expected to help RLAV to support  the share of long-term leases in its portfolio. This is MIGA’s second guarantee in support of RLAV.

Ukraine is among the countries in the region hardest hit by the global economic crisis. Until September 2008, it was one of Europe's fastest-growing economies, with annual growth of more than 7 percent for eight years. The crisis has dried up foreign loans, crippled banks with defaults, and triggered massive layoffs.

The World Bank Group’s country partnership strategy for Ukraine emphasizes the need to support the development of non-bank financial institutions, including leasing companies, to deepen the financial sector, broaden the availability of financial instruments to Ukrainian enterprises, and support private investment. This investment fits well with the country partnership strategy. First, it promotes the involvement of strategic foreign investors, such as RZB, that are playing an important role in the development of the leasing industry in Ukraine in these difficult times. Second, this project is expected to support investments in the agribusiness sector, an important area for job creation and development of local industries.

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