OOO Raiffesisen Leasing, Moscow

MIGA issued a $5.7 million guarantee to Raiffeisenverband Salzburg (RZVS) of Austria for its $6 million shareholder loan to OOO Raiffeisen Leasing, Moscow (RLRU) in the Russian Federation. The guarantee is for a period of five years and provides coverage against the risks of expropriation and transfer restriction.

The project will finance the further expansion of RLRUs operations in the Russian Federation. This is MIGA's second project for RLRU following coverage of a $25 million shareholder loan in 2002. In addition to increasing the availability of medium term-lease financing, it will focus on small and medium-size enterprises (SMEs). The project will also promote further competition in the financial sector and encourage Russian financial institutions to improve their standards.

The expansion project will contribute to numerous employment and macro-economic development impacts in the Russian Federation. The project expects to increase employment with 21 new managerial jobs with significant on- and off-site training. Staff will also receive wages and benefits that are on average 20 percent higher than comparable Russian financial institutions. Furthermore, RLRU will indirectly create additional jobs through new or expanding companies benefiting from the project's leasing operations. Although the project will not directly contribute to export earnings, the leasing activities are expected to generate $5 million annually in foreign exchange earnings.