|
Minsk, June 24, 2003—
The International Finance Corporation (IFC), the private sector arm of the World Bank Group, signed an agreement to provide a five-year $14 million loan to Priorbank, the largest privately-owned commercial bank in Belarus, for on-lending to private enterprises. This is IFC’s first investment in Belarus’ financial sector.
IFC’s loan will strengthen a leading private sector bank in Belarus by providing it with long-term funding, which is not available in the market from other sources, and help Priorbank meet the increasing demand for term finance from its clients. Additionally, IFC’s loan will support implementation of Priorbank’s expansion strategy a central component of which is increased lending to private companies. “The agreement signed between Priorbank and IFC is a very positive event, which reaffirms the Priorbank’s leadership in the Belarussian financial markets. This investment opens additional opportunities not only for the Bank and its clients, but for the entire Belarussian banking sector,” said Mr. Kostyuchenko, the Chairman of Priorbank’s Board.
IFC’s strategy for Belarus is to foster the private sector development through technical assistance and lending operations. IFC’s Loan to Priorbank represents an important opportunity for IFC to promote the development of the nascent private corporate sector in this state-dominated economy and increase the depth and soundness of financial system in the country. “IFC welcomes the opportunity to provide Priorbank with long-term funding for diversification and expansion of its loan portfolio. The investment in Priorbank is the first financial markets transaction undertaken by IFC in Belarus, and we hope that this investment will lay a solid foundation for our future long-term work together and establish a platform for future investments both in the financial and the corporate sector in the country, which is key for its economic development,” commented Mr. Nassim, IFC’s Director for Central Eastern Europe, at the signing ceremony in Minsk.
Priorbank, originally established in 1989, is currently the third largest commercial bank Belarus, both in terms of assets and equity, with $382 million and $68 million respectively, as of March 31, 2003. The recent acquisition of 50% of Priorbank by Raiffeisen Zentralbank will further strengthen the position of Priorbank as a leading financial institution in the domestic market. Priorbank’s shareholders include the European Bank for Reconstruction and Development which in addition to an equity investment, has provided the bank with access to credit lines and technical assistance.
IFC's mission (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC’s worldwide committed portfolio at the end of FY02 was $15.1 billion for its own account and $6.5 million held for participants in loan syndications.
|
