MIGA Lends Support to Crisis-Hit Ukraine

MIGA Lends Support to Crisis-Hit Ukraine

( Ukranian )

WASHINGTON, DC, December 2, 2008?The Multilateral Investment Guarantee Agency (MIGA), the political risk insurance arm of the World Bank Group, said today it has issued its fourth guarantee in support of the banking sector in Ukraine. The $247 million guarantee is covering a shareholder loan from UniCredit Bank Austria AG to Joint Stock Commercial Bank for Social Development Ukrsotsbank?Ukraine’s fourth largest bank.

Ukraine is among the Eastern European countries hardest hit by the global financial turmoil. Economic growth averaged  above 7 percent in the country between 2000 and 2007, but the global downturn has seen investors and lenders withdraw. The country’s stocks, banks and currency have all suffered.

The World Bank Group is working with countries, other international institutions and global partners to deploy the full range of its resources?loans, credits, grants, equity investments, guarantees, advice?to help countries like Ukraine strengthen their economies, bolster financial systems, maintain growth and protect the most vulnerable. 

“Banking systems in many emerging markets and transition economies face a serious threat from the ongoing financial crisis, and this presents new challenges for the World Bank Group,” said Shigeo Katsu, World Bank Vice President for Europe and Central Asia. “The guarantees issued by MIGA in support of the banking sector in Ukraine are part of the Bank Group’s efforts to help crisis-hit countries cope with the turmoil in the global financial markets.”

MIGA’s guarantees help mitigate noncommercial risks to investments, encouraging lenders and investors to invest in emerging markets and transition economies and inject much-needed liquidity in these markets. 

“MIGA stands ready to provide effective and timely assistance to countries affected by the financial crisis,” said James Bond, Acting Executive Vice President and Chief Operating Officer of MIGA. “We hope that our participation will help bolster confidence in the banking system in Ukraine, and ensure that the significant gains in living standards recorded over the past decade in the country are not lost.” 

In 2008 MIGA provided four guarantees to promote investments in Ukraine, including one in the manufacturing sector. Over the last two decades, MIGA has issued guarantees in support of nine projects in the country. To find out more about the projects, visit www.miga.org .

For information:

Mallory Saleson, msaleson@worldbank.org , 202.473.0844

Farah Hussain, fhussain@worldbank.org  202.473.2540