MIGA to provide 3 Ukrainian banks with up to $10 mln of trade finance guarantees to EBRD

MOSCOW. March 7 (Interfax) - The Multilateral Investment Guarantee Agency (MIGA), as part of a joint project with the European Bank for Reconstruction and Development (EBRD), will provide state-owned Ukrgasbank, Ukreximbank and Oschadbank with a total of up to $10 million guarantees against the risk of non-payment of their obligations to the EBRD on funds received from it under the Trade Finance Program, according to information on the MIGA website.

The first TFG (Trade Finance Guarantees) under this project will be for up to $10 million for Ukrainian state banks, Ukrainian media reported, citing information on the MIGA website.

Previously, the EBRD noted that the total size of the program of cooperation with MIGA on trade finance in developing countries through the state-owned banks is $200 million and the first project will be in Ukraine, but did not specify its volume.

Guarantees are issued for up to six years with an initial period of three years.

MIGA also announced the launch of the Support for Ukraine's Reconstruction and Economy (SURE) Trust Fund, a new humanitarian initiative to support economic activity and reconstruction in Ukraine, with Japan's first contribution of $23 million.

"The fund, which MIGA expects to grow to $300 million through contributions from additional donors, will allow MIGA to provide trade finance guarantees, insurance on bank reserves during the crisis, and political risk insurance to support reconstruction after it," the agency said in a statement.

MIGA emphasized that this tool, in addition to grants and loans to the Ukrainian government, would allow the private sector to invest in infrastructure reconstruction and economic activity.

MIGA was established in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies, helping to reduce the risks of currency conversion and transfer restrictions, government breaches of contracts, expropriation, etc.

Since its foundation, MIGA has provided almost $70 billion in guarantees in 122 developing countries in support of nearly 1,000 projects.

Earlier this year, MIGA has already provided one-year guarantees of up to 100 million euros for Raiffeisen Bank International AG's (RBI) investment in the capital of its Ukrainian subsidiary, Raiffeisen Bank.