The European Bank for Reconstruction and Development (EBRD) is continuing to strengthen financial intermediation in the Armenian private sector with a particular focus on micro, small and medium-sized enterprises (MSMEs). The Bank is also promoting energy efficiency in the country by helping private sector entities and residents to invest in energy efficient projects.
The EBRD is providing ACBA with a US$ 9 million loan equivalent in local currency for on-lending to MSMEs, and a further US$ 3.5 million equivalent in local currency for energy efficiency loans. The EBRD’s funds will help ACBA to continue supporting viable MSMEs, whose access to finance, especially in local currency, remains limited. This will be the first energy efficiency credit line to ACBA, and is aimed to be on-lent to the residential sector as well as to MSMEs, in order to improve energy efficiency through investments in best performing technology.
Mark Davies, Head of the EBRD’s Yerevan Resident Office, said: “This is the third energy efficiency loan signed in Armenia and the first such loan to ACBA, under the Caucasus Energy Efficiency Program (CEEP). The three-year facility is dedicated to financing energy efficiency and rational energy utilisation investments for ACBA’s retail and MSME clients. The EBRD continues to support MSME lending in the country, and has, to date, signed just over US$ 103 million in 19 projects under the Armenian Multi-Bank Financing Framework II.”
Commented Stepan Gishyan, CEO of ACBA: “We are pleased to continue our successful relationship with the EBRD. The new energy efficiency credit line will allow us to introduce the new product to our customers and encourage our retail and MSME clients to make better use of Armenia’s energy resources. Additionally, the local currency MSME facility provides funding for our core customers – micro, small and medium-sized businesses, and will help to further strengthen our position in the MSME segment.”
ACBA-Credit Agricole is the second-largest bank in Armenia by total assets, and the largest by capital, as of the first half of 2013. It is a leading provider of finance to farmers and agribusinesses in the country, and a significant player in the MSME segment, with a well-established branch network and franchise.
The EBRD has been active in Armenia since the country’s independence in 1991, and has, to date, invested over €652 million in 123 investment projects. The Bank is focused on supporting the development of the financial sector, with the aim of improving access to finance for local enterprises, especially those operating in the rural regions of Armenia. In 2013 the EBRD signed seven projects in Armenia, for a total of approximately US$ 44 million.