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MIGA’s goal is to promote foreign direct investment into developing countries to support economic growth and more.

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Learn about the progress MIGA is making in its mission to support economic growth, reduce poverty and improve people’s lives.

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Explore different types of political risk insurance guarantees provided to investors and lenders.

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Mandatory Reserves – Komercijalna banka a.d. Beograd

€252.13 million
Summary of Proposed Guarantee

Project description

This summary describes equity investments (including retained earnings) by Nova Ljubljanska banka d.d., Ljubljana (NLB) for the banking operations in Serbia of its recently acquired subsidiary Komercijalna banka a.d. Beograd (KB), excluding KB subsidiaries in Bosnia & Herzegovina and Montenegro. The MIGA guarantee is expected to provide regulatory capital relief to NLB on a consolidated level by reducing the amount of Risk-Weighted Assets (RWAs). The tenor of the guarantee is expected to be up to 7 years.

NLB is the largest banking and financial services group in Slovenia with operations across southeastern Europe. NLB’s banking subsidiaries outside of Slovenia are required to maintain mandatory reserves at their respective central banks based on the volume of customer deposits. Mandatory reserves affect NLB’s overall RWAs at the consolidated level, resulting in less headroom for other assets at a given level of capital.


Environmental Categorization

This Project is categorized as FI-2 under MIGA’s Policy on Environmental and Social Sustainability (2013). KB provides retail and corporate banking. The MIGA guarantee will provide regulatory capital relief as such, the Project will support the bank’s general lending activities and will be underwritten as part of MIGA’s COVID-19 Program (Pillar 2B). The applicable E&S requirements for this Project are: (i) MIGA’s Exclusion List; (ii) applicable national environmental and social laws and regulations; and (iii) applicable MIGA Performance Standards; all as to be agreed in the MIGA guarantee.

NLB, a MIGA client (2020)[i], acquired KB in December 2020 and NLB is in the process of integrating KB into NLB Group’s operations.

Based on MIGA standards the main Environmental and Social (E&S) risks of this Project are associated with KB’s capacity to identify, assess, and manage the E&S risks of its lending activities and the management of labor matters at KB. MIGA analyzed KB’s portfolio for types of transactions, tenor, size, industry sectors, and exposure to MIGA’s Exclusion List. MIGA also analyzed KB’s E&S risk management procedures in line with the requirements of Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts (PS1), and KB’s labor practices in line with the requirements of Performance Standard 2: Labor and Working Conditions (PS2).

As of December 2020, retail lending represented the largest segment of KB’s portfolio; the other segments covered include corporate, SME, microfinance, and financial institutions. The main sectors financed by KB include, wholesale and retail trade, electricity/utilities, construction, finance and insurance, agriculture, real estate, transportation, mining, and manufacturing. These sectors are mostly medium-risk sectors, and KB has a limited number of long-term loans in potentially high-risk sectors. KB has minimal exposures to activities in MIGA’s Exclusion List. KB’s overall portfolio is considered to have limited E&S risks and impacts; the Project has thus been categorized as FI-2.   

KB has an Environmental and Social Management Systems (ESMS) which meets the E&S requirements of this Project. KB has an E&S team and KB’s ESMS includes a detailed procedure for identifying, assessing, and managing the E&S risks and impacts associated with the activities of its clients. Transactions are screened against the applicable E&S requirements as part of KB’s credit approval process and E&S action plans are developed to address identified gaps where required. In addition, KB monitors the compliance of its clients with its E&S requirements. MIGA also assessed KB’s emergency response procedures and KB’s procedures were found to be in line with the requirements of PS1. In response to COVID-19, the bank has implemented workplace hygiene and social-distancing measures to minimize the risk of exposure for its employees and clients.

In relation to PS2, MIGA’s assessment revealed that KB’s labor policies are in line with the requirements of PS2 and national labor laws in Serbia.  KB’s policies and procedures cover terms of employment, grievance management and discipline, safety, equal opportunities, harassment, training and development, and performance management.

As part of the process of integrating KB into the NLB Group, KB will gradually transition to NLB’s relevant policies and procedures which are in line with MIGA’s E&S requirements. The E&S action plan for this Project will reflect  the transition to these policies and procedures. KB/NLB will report periodically to MIGA on the application of both their E&S procedures and the Performance Standards.


Development Impact

MIGA’s proposed guarantee will help NLB reduce RWAs on a consolidated basis. The RWA capacity that is freed up is expected to be used by NLB to support the operations of KB in Serbia, and consequently support NLB’s overall business strategy in the host country. The Project aligns with MIGA’s COVID response initiative to help international banks cope with the medium to long-term effects of the COVID crisis.



MIGA supports its clients (as defined in MIGA Policy on Environmental and Social Sustainability) in addressing environmental and social issues arising from their business activities by requiring direct investment clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities. MIGA support to Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations as per the requirements of Performance Standards 1. 
In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for MIGA. The CAO is mandated to address complaints from people affected by MIGA-guaranteed business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of MIGA.
Independent of MIGA management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of MIGA’s environmental and social performance through its compliance arm.
Complaints may relate to any aspect of MIGA-guaranteed business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of a MIGA-guaranteed business activity. Complaints can be submitted to the CAO in writing to the address below:

Compliance Advisor/Ombudsman

International Finance Corporation

2121 Pennsylvania Avenue NW

Room F11K-232

Washington, DC 20433 USA

Tel: 1 202 458 1973

Fax: 1 202 522 7400



[i] NLB is an existing MIGA client; MIGA currently provides coverage for NLB’s investments in its six subsidiaries in Bosnia and Herzegovina , Kosovo, Montenegro, North Macedonia, and Serbia.