The project will support PCH to meet growing client demand for green financing in SEE and provide much needed funding to finance the continued growth of the its green loan portfolio (CAGR of 34% over 2016 - 2019). As will be mandated under the Policy Statement, EBRD funding will be used by PC Serbia and PC Romania to extend loans to local SMEs in line with the objectives of the FIF.
Senior unsecured term loan of up to EUR 20 million to PCH for on-lending to eligible Sub-borrowers by ProCredit Serbia ("PC Serbia") and ProCredit Romania ("PC Romania"). The Borrower will undertake to ensure that the amount of this facility (i.e. EUR 20 million) will be on-lent by PC Serbia and PC Romania to eligible sub-borrowers within a two-year period, in line with the eligibility criteria under PS. The financing will be aligned with the ProCredit Holding Green Bond framework as well as with the EBRD GET approach. The EBRD investment will support business development and SME lending in Serbia and Romania in line with the objectives of the Financial Intermediaries Framework ("FIF").
ETI score: 60
The project contributes to the objectives of the FIF, supporting the Competitive and Resilient transition qualities. FIF seeks to:
(i) Foster SME competitiveness by increasing availability of financing; and contribute to the competitiveness of financial institutions by enabling innovation in strategy, products, processes and marketing related to SME lending.
(ii) By ensuring that banks and other financial institutions have adequate underwriting and risk management practices in place, the FIF also seeks to encourage sustainable lending practices, supporting the resilience of the financial system.
PROCREDIT HOLDING AG & CO KGAA
ProCredit Holding AG & Co. KGaA (the "Company", "PCH"), a partnership limited by shares incorporated in Germany. PCH is a banking group focusing on financing SMEs, with diversified operations via 12 banking subsidiaries, out of which 93% of loan portfolio is located in South-Eastern Europe (70%) ("SEE Region") and Eastern Europe (23%) - coinciding with 10 EBRD countries of operations. The rest of operations are in South America i ProCredit Bank Ecuador (6%) and Germany (1%).
EBRD Finance Summary
Total Project Cost
The Bank is additional because of its Terms: (i) the Bank's support is considered instrumental in successfully meeting PCH's growing client demand for green financing, and (ii) in providing adequate financial resources for PCH to expand its SME lending operations. Attributes: EBRD has significant experience in supporting the SME lending and is an experienced participant in GET-eligible financing of financial institutions; Conditionalities: EBRD's proceeds will be channelled towards financing SMEs in the SEE Countries.
Environmental and Social Summary
Categorised FI (2014 ESP). ProCredit is an existing client to the Bank and will continue to comply with EBRD's Performance Requirements 2, 4 and 9, including the application of an adequate environmental and social risk management system (ESMS), adherence to the E&S Risk Management Procedure for Micro, SME and Corporate Lending, as well as EBRD's Environmental and Social Eligibility Criteria for Wind, Solar, Biomass, Hydro and Geothermal Energy, as applicable. The ESMS has been implemented at each subsidiary and covers 3 pillars: internal environmental management, management of environmental and social risks in lending and green finance. ProCredit's current Green project portfolio is app. EUR 874 million and has grown 34% CAGR in 2016-2019 and further 10% in 1H2020. The Agreement between ProCredit and EBRD will include a commitment to allocate the EBRD investment amount to the SEE Countries to extend new loans to local SMEs. The project is consistent with the GET approach and the GET share is 100%.
Technical Cooperation and Grant Financing
Company Contact Information
+ 49 (0)69 951 437 160
+ 49 (0)69 951 437 168
ProCredit Holding AG & Co. KGaA Rohmerplatz 33 - 37 60486 Frankfurt am Main, Germany
PSD last updated
14 Oct 2020
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