Poslovni Sistem Mercator d.d.

MIGA has provided €8.3 million in reinsurance ($7.64 million) to the Slovene Export Corporation (SEC) for the political risk insurance it has provided to Poslovni Sistem Mercator d.d. (Mercator) of Slovenia for Mercator’s €2.83 million ($2.71 million) equity investment in, and €12.44 million ($11.91 million) shareholder loan to, Mercator Trzni Centar Sarajevo d.o.o (Mercator TC Sarajevo), in Bosnia and Herzegovina (Bosnia). Coverage is being provided against the risks of transfer restriction, expropriation, war and civil disturbance for up to ten years for the equity investment and up to six years for the shareholder loan.

The project involves operating a hypermarket/shopping mall in the center of Sarajevo. Private-sector led growth and employment are considered by the World Bank Group to be a key factor in achieving sustainable growth in Bosnia, and the project addresses this need. Further, since smuggling is a wide-spread problem in Bosnia, causing considerable lost customs and tax revenues, the center, with its wide selection of goods, convenience and competitive prices, is expected to attract customers from the country’s "gray" market, thus channeling more consumer spending through the official sector. Slovenia and Bosnia both benefit from the project as a distributor of goods from both countries, with 50 percent of goods sold coming from Slovenia, and 30 percent to be locally produced. Mercator TC Sarajevo employs 245 staff, and provides ongoing training. The project is expected to generate €8.6 million in taxes, royalties and duties to be paid to the government over the first five years of profitable operation. Finally, MIGA’s reinsurance of SEC in this project will free SEC’s capacity in Bosnia to facilitate future Slovenian investments into the country.