POHJOLA INSURANCE RUSSIA (EQUITY)

Location:

Russia

Project number:

14151

Business sector:

Insurance, Pension, Mutual Funds

Notice type:

Private

Environmental category:

FI

Target board date:

02 Nov 1999

Status:

Completed

PSD disclosed:

21 Dec 2001

Project Description

The EBRD is considering participating in the forthcoming capital increase in Russia Life Investments Limited, a UK holding company, which in turn would allow for an equivalent capital increase in Principal, a Russian insurance company. Participation in the capital increase would allow the EBRD to maintain its stake alongside Pohjola, a Finnish insurance company. This supports the EBRD's previous investment of US$ 325,000 in 2000. The investment will continue to support the development of the Russian non-life insurance market.

Transition Impact

Given the low level of ownership by experienced strategic investors and the early stage of the development of the Russian insurance market, the transition impact of this investment is considered to be strong. Pohjola Insurance Group is one of a very few foreign investors present in the Russian insurance market, and the EBRD’s involvement supports Pohjola’s efforts to develop further sound insurance business in Russia. With a strong shareholder structure, transparent operations and reinsurance support from Pohjola, Principal contributes to the development of the insurance market in Russia.

The Client

Principal is a Russian insurance company writing a range of non-life insurance business. Although the company’s current level of premiums written is small, the outlook for the company’s growth is promising. The EBRD participates in this project alongside Pohjola, Finland’s second largest insurance company, which brings the company additional technical expertise and management support.

EBRD Finance

 Equity investment of US$ 357,500 (€393,250 equivalent). Previous EBRD investment of US$ 325,000 million.

Project Cost

Equity capital increase of US$ 1.1 million (€1.2 million equivalent). Total project cost US$ 2.1 million (€2.3 million equivalent).

Environmental Impact

Principal conducts its insurance and asset management operations in accordance with the EBRD’s Environmental Guidelines for the Insurance Sector.

Technical Cooperation

None.

Company Contact

 

Business opportunities

For business opportunities or procurement, contact the client company.

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Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.