Auro Banka dd

MIGA issued two guarantees to Hypo-Alpe-Adria Bank for an equity investment in, and shareholder loan to, Auro Banka in Bosnia and Herzegovina. The equity investment will be covered against the risks of expropriation, and war and civil disturbance; the shareholder loan will be covered against transfer restriction, expropriation of funds, and war and civil disturbance. MIGA's exposure totals $21.9 million. The European Investment Trust Fund will also cover up to $1.8 million. With this project, Auro Banka intends to expand and diversify its services, which include trade, corporate finance, and retail banking in 26 branches throughout the Federation of Bosnia and Herzegovina and the Republika Srpska.

The project will contribute to restructuring the country's financial sector by improving the quality and diversity of financial products and by increasing the number of Western European banks in the region. Such an expansion will be conducive to a greater degree of regional integration. Specifically, SMEs in the agriculture and construction sectors will gain access to lower-cost financing. In addition, Auro Banka will contribute an estimated $0.5 million in annual tax revenues and provide extensive training programs for approximately 15 new staff each year over the next three years.