Provision of a senior unsecured loan to ACBA bank of up to USD 20 million under the Bank's Resilience Framework (RF). The loan proceeds will used for on-lending to MSMEs and larger companies in line with the Policy Statement of the Resilience Framework.
Similar to many countries, the coronavrius pandemic and efforts to contain it are having a major negative impact on economic activity in Armenia. Against this backdrop, liquidity support to the private sector is pivotal to the country's ability to weather the economic downturn, reduce its vulnerability to internal and external factors and achieve quicker recovery.
With the banking sector accounting for 90% of total financial intermediation in the country, bank loans are the main source of finance for the private sector. However, supply of commercial credit has almost ceased as the banks have shifted their focus on further strengthening their balance sheet buffers.
The proceeds of the Bank's investment will be used to on-lend to private MSMEs and corporates clients in the Covid-19 environment, supporting their funding needs and resilience. EBRD will not only provide funding to ACBA bank, but also provide comfort to other lenders and potentially facilitate attraction of more funding from them by ACBA bank.
ETI score: 70
Resilient: The project will contribute to the financial resilence of ACBA bank by enabling it to continue lending operations despite balance sheet pressures triggered by the economic fallout from the pandemic.
Competitive: The project will help ACBA bank retain its strong position in the market by remaining active and efficient market player through sustained lending operations.
ACBA BANK OJSC
ACBA bank is a long-standing partner bank of EBRD since the first engagement in 2003 and one of the leading banks in Armenia. It is the 4th largest bank in Armenia in terms of total assets with a dominant position in lending to agriculture and MSMEs in rural areas in particular. Its extensive network of 60 branches in all regions of Armenia allows it to reach out to many potential clients country-wide.
The bank belongs to the local shareholder ACBA Federation CJSC (non-profit organization, which consolidates 10 Agri union in Armenia), which currently owns 95% of shares, while Credit Agricole owns the remaining 5%.
EBRD Finance Summary
A senior unsecured loan in the amount of up to USD 20 million equivalent under the Resilience Framework. The loan will be repaid within 2 years through equal semi-annual instalments commencing after a grace period of one year.
Total Project Cost
COVID-19 crisis response: EBRD offers financing in the environment when most of commercial international lenders are scaling back their exposure to developing countries and reluctant to provide new financing even to good clients.
Environmental and Social Summary
Categorised FI (ESP 2019): ACBA bank will be required to continue to comply with PRs 2, 4 & 9, implement the applicable environmental and social procedures and submit annual ennvironmental and social reports to the Bank.
Technical Cooperation and Grant Financing
Company Contact Information
+ 374 10 31 8888
82-84 Aram str. 0002 Yerevan Republic of Armenia
PSD last updated
23 Jul 2020
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Independent Project Accountability Mechanism (IPAM)
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