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EBRD signs ECU 15 million co-financing agreement with Slovak bank
Following the acquisition in 1993 of a 20 per cent stake in Pol'nobanka, the fifth largest Slovak bank, the European Bank for Reconstruction and Development (EBRD) has extended a co-financing facility for ECU 15 million, aimed at supporting the development of the Slovak agribusiness sector.
Hans-Christian Jacobsen, Director of the EBRD's Agribusiness Team, said: "The Slovak agribusiness sector, as in so many countries in the region, requires considerable investment to restructure and meet the challenges of a market economy. Many of these funding requirements, however, are for relatively small amounts, which the EBRD is unable to service directly. The co-financing facility is an ideal mechanism to address these needs, working in conjunction with a local partner like Pol'nobanka whose focus and experience in the sector will be essential to the successful operation of the facility."
L'udovit Posa, Chief Executive Officer of Pol'nobanka, said: "The co-financing facility will enable us to provide our traditional clients with the medium to long-term funding needed to meet their development requirements in the current economic climate."
The ECU 15 million facility will provide funding for investment projects to small and medium-sized food and beverage processing companies in the private sector. The co-financed loans will range from ECU 1 - 6 million, of which the EBRD will provide up to 50 per cent in hard currency alongside Pol'nobanka's Slovak crown commitments.
Agribusiness accounts for more than 14 per cent of GDP within the Slovak Republic and employs approximately 13 per cent of the total labour force. Following the dismantling of the former state monopolies and privatisation of individual enterprises, the sector is also highly fragmented; hence there is a need for investment to restructure the sector and to ensure its long-term international competitiveness.
Pol'nobanka (previously known as Slovenska Pol'Nohospodarska Banka) was formed in 1990 to support the transformation and privatisation of the agribusiness sector within the Slovak Republic. With shareholders' equity at year end 1994 of approximately ECU 27 million, Pol'nobanka has grown rapidly since its inception into a full-service commercial bank with customers from a wide range of industrial sectors, covered by its network of 16 branches and 13 sub-branches across the country.
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