World Bank office in Tirana said Tuesday that MIGA has issued five guarantees for €682.5 million ($800 million) for a period of up to 3 years. These guarantees provide coverage on mandatory reserves held by RBI’s subsidiaries in Albania, Belarus, Bosnia and Herzegovina, Kosovo, and Serbia in their respective central banks.

The guarantees are part of the MIGA COVID-19 Response Program, which aims to counter adverse economic impacts arising from the crisis.

MIGA’s capital optimization instrument will provide capital relief to a key lending institution in the Central, Eastern and Southeastern Europe (CESEE) region in support of its continued operations in five of its subsidiaries at a time of severe economic stress and uncertainties due to the pandemic. MIGA’s guarantees reduce the regulatory risk-weighting applied to the mandatory reserves of RBI’s subsidiaries, freeing up capital for lending. In the short term, these guarantees will help RBI navigate the ongoing COVID-19 crisis, build resilience, and support the continued supply of credit into the host countries’ economies. In the longer term, MIGA’s guarantees are expected to lay the foundation for credit growth to sustain both economic activity and employment in the host countries.

“This project will also strengthen small businesses, sustain employment, and aid the post-pandemic green recovery in countries that are vital to the CESEE region. Up to 15% of the freed-up capital from the MIGA guarantees will be allocated by RBI’s subsidiaries towards climate finance and green lending,” said MIGA Executive Vice President Hiroshi Matano.

MIGA was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies by helping mitigate the risks of restrictions on currency conversion and transfer, breach of contract by governments, expropriation, and war & civil disturbance; and offering credit enhancement to private investors and lenders.

Since its creation, MIGA has issued over $59 billion in guarantees across 118 developing countries.

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