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Slovak private sector benefits from EBRD financing
A two-tranche ECU 15 million credit facility from the European Bank for Reconstruction and Development (EBRD) to Priemyselna Banka A.S. Kosice (PBK) should help to meet the demand for term-financing from small and medium-sized enterprises (SMEs) in the Slovak private sector as well as supporting the development of energy efficiency projects in the country.
David Hexter, Deputy Vice President of the EBRD, said: "By improving PBK's access to long-term funding, the EBRD's facility will support the development of private sector SMEs, which are the prime source of economic growth in the Slovak Republic. The project will also ensure a sound institutional strengthening of PBK while fostering competition in the banking sector."
An initial tranche of ECU 7.5 million will be made available to PBK and could be followed by a second tranche in the amount of ECU 7.5 million at the discretion of the EBRD. Both tranches will be denominated in Deutschmarks. The facility will be used by PBK to finance specific investments for the modernisation, expansion or diversification of its clients. It is expected that PBK will use approximately half of the total amount of the facility for co-financing energy efficiency investments with interest-free funds from a separate EU PHARE facility of ECU 3.8 million.
Bernard Jamet, the EBRD's Director of the Energy Efficiency Team, added: "Supported by PHARE, the facility will transfer energy efficiency project finance know-how to PBK and increase general awareness for demand-side energy conservation projects. By financing such investments, the project will significantly reduce energy demand and, consequently, environmental pollution related to energy generation."
Established in December 1991 by the Confederation of Industry of the Slovak Republic, PBK started its operations in 1992. The Slovak Government has no direct shareholding in PBK but 45.60 per cent of the bank's capital is owned by state-owned entities. Since its establishment, PBK has focused its activities on providing corporate banking services, in particular short and medium-term loans to its local clients. PBK's main objective is to become one of the leading private medium-sized banks in the central eastern part of the country and to focus on supporting exports and imports to and from other east European markets.
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