JSCB Raiffeisenbank Ukraine

MIGA issued a $19 million guarantee to Raiffeisen Zentralbank Osterreich AG, of Austria, to cover its $20 million shareholder loan to JSCB Raiffeisenbank Ukraine, a Kiev-based bank. The coverage is against the risks of transfer restriction and expropriation, and extends for up to seven years.

The project is part of an overall World Bank Group strategy for Ukraine that lists private sector development among its primary goals. A properly functioning financial sector is critical to private sector development and economic growth. The bank currently directs its lending to companies engaged in trade, metallurgy and mining, food and beverages, printing and publishing. The loan will allow the bank to expand operations and continue lending to these sectors, as well as provide additional funds to finance privatizations and small- and medium-sized enterprises. The bank also specializes in pre-export finance and, as such, should help stimulate Ukrainian exports. The provision of funds for short- and medium term lending should assist the country's financial sector. The bank, which follows the parent company's corporate governance standards, is expected to have a positive effect on other banks. It will provide staff with ongoing training.