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EBRD and BARC Versicherungs-Holding AG to develop central Europe's insurance sector
To help meet growing demand for insurance services in central Europe, a US$ 20 million (ECU 18.8 million) multi-project facility agreement has been signed by the European Bank for Reconstruction and Development (EBRD) and BARC Versicherungs-Holding AG (BARC), the leading Austrian insurance group. Under the terms of the partnership, the EBRD will invest alongside BARC in Croatia, the Czech Republic, Hungary, Slovenia and the Slovak Republic, in projects structured and developed by BARC in the insurance sector.
"This major programme builds on the EBRD's significant experience in the insurance sector," said Serge Desprat, Senior Banker and Head of the EBRD's Insurance Unit in the Financial Institutions Team. "The multi-project facility has proved to be a popular and effective financing instrument, highly suited to develop the private insurance and pensions sectors in the region. Ultimately this will benefit the local capital markets, which will be strengthened by increased activity in this sector, furthering transition in these countries."
The facility will support BARC's investment programme in life, non-life and health insurance. Herbert Schimetschek, Chairman of the Board of BARC, commented: "The present agreement will strengthen BARC group's existing activities in Central Europe and, at the same time, will allow us to enter new markets. The EBRD's possible participation in the group's existing companies in the Czech and Slovak Republics as well as new joint projects in other countries such as Croatia will create far-reaching opportunities in these emerging markets."
BARC was created in early 1997 when Bundesländer-Versicherungs AG and Austria- Collegialität Versicherung AG merged to form Austria's largest insurance group. Bundesländer already has two subsidiaries operating in the Czech and Slovak Republics.
Multi-project facilities are framework agreements between the EBRD and industrial partners. They enable a large number of sub-projects, too small for the EBRD to participate in directly, to be financed in accordance with principles jointly agreed at the outset with the partner.
The EBRD was set up in 1991 following the collapse of communism, to aid the transition from centrally planned to market economies in central and eastern Europe and the CIS. The EBRD is owned by 60 shareholders: 58 countries, the European Investment Bank and the European Community, and operates with ECU 20 billion in capital. The EBRD has already signed 12 investment projects in the insurance sector, including equity stakes in life and non-life insurance and pension companies.
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