main navigation menu miga logo
World Bank building

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

Young woman bending down to tending to her outside chores

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

Hyundai building

Explore global projects that support economic growth, reduce poverty and improves people’s lives.

Hands husking peas into a basket full of peas

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

Subscribe to Our Monthly Newsletter
x

About Dropdown Description

World Bank building

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

Our Impact Dropdown Description

Hands husking peas into a basket full of peas

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

Our Products Dropdown Description

Young woman bending down to tending to her outside chores

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

Projects Dropdown Descriptions

Hyundai building

Explore global projects that support economic growth, reduce poverty and improves people’s lives.

Bosnia and Herzegovina

RBI Central Bank Reserves Coverage

€180 million
Banking
Project Brief
Not Active
twitteremail

Project Description

On December 30, 2022, MIGA issued additional guarantees of up to EUR180.0 million covering equity investments by Raiffeisen Bank International AG (RBI) in its subsidiary in Bosnia and Herzegovina, Raiffeisen Bank d.d. Bosna i Hercegovina (RBBH) for a period of up to three years under the existing RBI Central Bank Reserves Program in Bosnia and Herzegovina.[1]

Vienna-based RBI is a universal banking group that has operated for over 30 years in Central, Eastern and Southeastern Europe (CEE), with subsidiary banks in 12 CEE markets. RBI’s subsidiary banks are required to maintain reserves at the central banks in their respective jurisdictions, generally based on the volume of customer deposits that these subsidiaries have. This exposure leads to higher risk weights on assets at the consolidated level, resulting in increased capital allocation for country risk exposure. At the consolidated level, the risk weighting determines the amount of equity required to maintain a specified capital adequacy ratio in accordance with European banking regulations.

Environmental Categorization

RBBH has been a MIGA client since 2015. RBBH, part of the RBI universal banking group, is a commercial bank providing loans to corporates, SMEs and retail clients in Bosnia. The project will support all of RBBH’s lending activities. RBBH supports SME and corporate clients in sectors mostly considered medium-risk sectors; the environmental and social (E&S) risks and impacts associated with these sectors are considered limited and can be addressed through mitigation measures. The project is thus categorized as FI-2 under MIGA’s Policy on Environmental and Social Sustainability (2013).

As an existing client, the bank has an E&S officer and has implemented an Environmental and Social Management System (ESMS) which is in line with the requirements of MIGA Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts. The ESMS applies to all lending and includes all applicable E&S requirements defined as the MIGA Exclusion List, compliance with national laws and regulations, and application of the Performance Standards. Transactions are screened against the applicable E&S requirements and E&S action plans are developed to address identified gaps where required. RBBH has developed a set of human resources policies and procedures, that are in line with requirements of the national legislation and all the applicable requirements of MIGA Performance Standards 2: Labor and Working Conditions.

RBBH will continue to report periodically to MIGA on the implementation of the ESMS and application of the Performance Standards.

Development Impact

MIGA’s guarantee will support RBI’s overall business strategy in Bosnia and Herzegovina. MIGA’s guarantee allows RBI to achieve RWA relief at the group consolidated level and provide the enabling conditions to the parent bank to pass the benefits of this support to its operating subsidiaries. As reserves, held at each respective central bank, attract lower risk weights because of MIGA, assets in Bosnia and Herzegovina can be deployed more productively, thereby either accelerating the pace of leveraging (i.e. expansion of loans to customers) or slowing down the pace of deleveraging (i.e. retention of loans to customers).

MIGA’s guarantee helps RBI reduce the risk of some of its assets, which lead to a reduction in the group’s RWA on a consolidated basis, thus supporting access to finance in the host country. The RWA capacity that is freed up is expected to be used by RBI to support lending operations in Bosnia and Herzegovina, including to SMEs, gender and climate finance activities.

 

 

------------------------------------------------------------------

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

E-mail: cao-compliance@ifc.org

 

[1] The guarantee was terminated on December 30, 2023.

twitteremail