On June 24, 2013, MIGA issued a guarantee of $142.5 million covering a loan guarantee by Raiffeisen Bank International AG (RBI) of Austria in support of funds raised by its Ukrainian subsidiary Raiffeisen Bank AVAL (RBAV). The coverage is for a period of up to seven years against the risks of transfer restriction and expropriation of funds.
The state of Ukraine’s economy continues to remain delicate in the aftermath of the 2008 financial crisis as a result of spillover effects from its euro-zone neighbors.
The project will continue to bolster the capital base of a systemically important bank, strengthening the banking sector in Ukraine in a difficult macroeconomic environment.
RBAV provides new credit to the economy—in particular to corporates, farms, and small and medium enterprises that create jobs and foster economic activity and growth.
MIGA’s guarantee to the project is fully consistent with the World Bank Group’s Country Partnership Strategy for Ukraine that calls for job creation and the attraction of foreign direct investment to improve productivity and international competitiveness. It is also consistent with the goals of the Vienna 2 Initiative for countries of Central, Eastern and Southeastern Europe—through which MIGA seeks to support Western banks active in the region.