EBRD and Inecobank to fund green building in Armenia

• EBRD and Inecobank to support green residential project in Yerevan
• Loan to support urban development and private-sector growth
• Promoting green building standards and urban regeneration in Armenia

The European Bank for Reconstruction and Development (EBRD) and Inecobank CJSC are supporting the development of a green mixed-use residential complex in the Armenian capital, Yerevan, with a senior secured loan of up to US$ 30 million (€26 million) under their risk-sharing facility.

The loan will be extended to Nuovo Velodromo LLC, a newly established special purpose vehicle co-owned by Renco Group S.P.A., a leading Italian construction company, and its local partner, the Adamium group of companies. The funds will go towards financing the construction of a mixed-use residential complex with a total area of approximately 47,000 square metres.

The total cost of the project is estimated at around US$ 92 million (€79 million), with the remaining financing to be covered by equity contributions from the sponsors and proceeds from apartment pre-sales.

The development will be the only mixed-use residential property in Armenia designed to achieve internationally recognised green building certification, distinguished by high construction quality and strong energy efficiency performance.

The project targets LEED “Gold” certification and, as a result, 100 per cent of the EBRD funding qualifies as Green Economy Transition (GET) financing.

The transaction is aligned with the EBRD’s country strategy for Armenia, in particular, its priority of enhancing private-sector competitiveness through capacity building, strengthened corporate transparency and a more conducive business environment.

The project is the fourth deal signed under the Bank’s risk-sharing facility with Inecobank. The facility is one of the core financing frameworks of the EBRD’s Small Business Initiative, a programme dedicated to supporting and developing the local private sector. A popular funding instrument, it is designed to allow the EBRD to share partner banks’ exposures to local enterprises through either funded or unfunded risk participation.

The EBRD is one of the leading institutional investors in Armenia. Since the beginning of its operations there, it has invested almost €3 billion in 243 projects, supporting private-sector development and the energy, infrastructure, telecommunications and financial sectors.