The European Bank for Reconstruction and Development (EBRD) is extending a €20 million loan to support business mortgage lending in Belarus. The loan to the Bank’s long-term partner Belgazprombank (BGPB) will help domestic businesses to obtain mortgages with longer tenor for the acquisition of office, industrial, trading and warehouse space.
This facility will be the first business mortgage financing credit line provided by the EBRD to a Belarusian bank and the proceeds will be on-lent to businesses and individual entrepreneurs. It will help address the problem of local companies being obliged to finance long-term real estate business acquisitions through short-term loans. Currently business mortgages of a longer tenor are either rare or unavailable in Belarus. The facility will thus act as a benchmark for other potential financiers to engage in businesses mortgage financing through local banks.
Francis Delaey, the EBRD’s Head of Office in Belarus, said: “We are pleased to sign this business mortgage financing facility with BGPB, one of our main partner banks in Belarus. This novel product responds to an unmet demand for long-term funding for real estate investments. It constitutes an important step towards creating better conditions for local entrepreneurs.”
Belgazprombank, established in 1990 and controlled by Russia’s Gazprom Group, began its cooperation with the EBRD in 1997. At the end of June 2013, it was ranked the seventh-largest bank in Belarus in terms of assets.