Guarantees will Support Lending to Real Economy
Washington, DC, June 25, 2015—The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance and credit enhancement arm of the World Bank Group, announced that it is providing guarantees to support ongoing lending to the real economy by Raffeisen Bank International’s (RBI) subsidiaries in Albania, Belarus, Bosnia and Herzegovina, Kosovo, and Serbia.
MIGA is providing guarantees of €457 million to RBI, the second largest financial group doing business in Central, Eastern, and Southeastern Europe. MIGA’s coverage will reduce the risk profile of RBI’s operations in these countries, enabling the bank to maintain local lending, stimulating economic growth, employment creation, and poverty reduction.
Through MIGA’s involvement, the subsidiary banks will be required to develop and implement environmental and social management systems commensurate with the risks in their portfolio. This additional capacity is expected to help improve the overall sustainability of the subsidiaries’ corporate clients and investment projects.
“MIGA’s guarantees are an important tool in managing our risk profile as we seek to concentrate on the promising markets where we can play a sustainable role in providing access to finance. We are quite proud to be the first Austrian banking group to implement this product,” says Karl Sevelda, CEO of Raiffeisen Bank International AG.
“We remain committed to supporting the economies that were disrupted by the global financial crisis,” says Keiko Honda, MIGA CEO and Executive Vice President. “In particular, our support to the financial sector in these countries can help deepen credit markets, which benefit both businesses and consumers.”
MIGA’s support to RBI builds on the crucial role the agency played in supporting the “Joint IFI Action Plan” implemented by the World Bank Group, the European Bank for Reconstruction and Development, and the European Investment Bank in response to the global financial crisis. MIGA delivered $1.9 billion of signed guarantees under the initiative to support the economies of Eastern Europe.
MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment into emerging economies to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfills this mandate by offering political risk insurance and credit enhancement to investors and lenders.