Provision of a senior loan to InecoBank of up to USD 5 million under the SME Competitiveness Programme in Eastern Partnership ('EaP SMEC' ) established by the EBRD in cooperation with the EU to help finance investments in micro-, small and medium sized enterprises ('MSMEs') to support sustainable investments in technologies, meeting best standards in the field of product quality, occupational health and safety, environmental protection, and promoting the use of green technologies, thereby enhancing MSMEs' competitiveness locally and regionally.
The project will enable InecoBank to finance long-term investments of Armenian MSMEs in upgrading their technology and equipment necessary to meet EU standards in terms of product quality, health and safety measures and environmental preservation. At least 70 per cent of all financed sub-loans are expected to be compliant with EBRD Green Economy Transition (GET) approach. In addition to long-term financing, eligible sub-borrowers will receive technical assistance and grant support in the form of investment incentives upon the completion of their investment projects.
ETI score: 75
Competitive: InecoBank will expand its MSME loan portfolio with a specific focus on financing priority investments complying with EU directive(s), ultimately facilitating competitiveness of Armenian MSMEs; and
Resilient: InecoBank is expected to maintain adequate loan portfolio quality.
InecoBank CJSC is a long-standing partner bank of EBRD. It is the 5th largest bank in Armenia in terms of total assets, with 5.8% market share as of YE 2020. InecoBank is one of the best performing banks in Armenia as per the results of 2020, exhibiting strong liquidity and capital positions.
EBRD Finance Summary
Total Project Cost
Financing structure: EBRD offers financing that is not available in the market (e.g. a longer grace period and tenor than the market average) from commercial sources on reasonable terms and conditions, which are necessary to structure the project.
Innovative financing structures and/or instruments: EBRD offers an innovative green finance instrument that integrates aspects such as climate and environmental, social and governance (ESG) standards and/or climate and ESG risk considerations into the financing structure. For instance, adjusting loan pricing and/or level of concessionality to reflect level of climate risk and/or positive climate benefits, such as GHG reductions, climate resilience benefits.
Knowledge, innovation and capacity building: EBRD provides expertise, innovation, knowledge and/or capabilities that are material to the timely realisation of the project's objectives, including support to strengthen the capacity of the client.
Environmental and Social Summary
Categorised FI (2019 ESP). IB's past performance and annual environmental and social (E&S) reporting to date for the existing exposures has been satisfactory. IB will need to comply with PRs 2, 4 & 9 and further comply with the EBRD's Environmental and Social Procedures for Corporate Loans, SME and Micro Loans, and TFP Environmental and Social Procedures, and will be required to submit annual environmental and social reports to EBRD.
Technical Cooperation and Grant Financing
TC: A project consultant under the EaP SMEC Programme will assist InecoBank with the implementation of the facility. A verification consultant will be engaged to verify the technical implementation of sub-projects before investment incentives are released to relevant MSMEs.
Non-TC: The project is supported by EUR 677,903 investment incentives to SME sub-borrowers funded by the EU.
Company Contact Information
PSD last updated
28 Oct 2022
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
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