GCF GEFF Regional - Arvand Bank Loan II

Location:

Tajikistan

Project number:

53454

Business sector:

Financial institutions

Notice type:

Private

Approval date:

01 Mar 2022

Status:

Disbursing

PSD disclosed:

10 Mar 2022

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

The provision of a senior loan of up to US$ 3.0 million to Arvand Bank, of which up to US$ 2.25 million to be provided by the EBRD and up to US$ 0.75 million by the Green Climate Fund (GCF) under the GCF-Green Economy Financing Facility (GEFF) Regional Framework (Tajikistan).

Project Objectives

The proposed operation complies with the GCF GEFF Regional Framework criteria. This is a second loan under GCF GEFF Regional Framework to Arvand which follows the successful utilisation of the first loan signed in early 2021. Proceeds of the loan will be on-lent to private sector sub-borrowers in line with the GEFF Policy Statement. The project objective is to promote investments in efficient climate change mitigation and adaptation technologies. The transaction will support further expansion of Arvand's product offerings with green lending products, in a gender responsive way.

Transition Impact

ETI score: 70

The project supports the Green TI quality through the provision of funding and know-how to financial intermediaries financing private sector investments in high performing climate change mitigation and adaptation technologies. This will support building a green economy in Tajikistan by facilitating the accelerated market penetration of climate technologies, particularly focusing on promotion of climate resilience and resource efficiency technologies applicable to the agricultural sector and rural areas including but not limited to drip irrigation, no till machinery, solar water heaters and solar PV. The project will also benefit from significant knowledge transfer and lessons learned from the previous green facilities with Bank Arvand (TajCREFF and GEFF).

Client Information

ARVAND BANK CJSC

Closed Joint Stock Company "Arvand Bank" (Arvand) operates as a universal commercial bank, offering a full range of banking services, primarily to retail and MSME segments in Tajikistan. 

As of end-February 2022 the bank operated a network of 73 branches and banking service centers and had over 48,000 borrowers with a net loan portfolio exceeding US$ 57m. It has maore than 64,000 individual depositors. 

 

EBRD Finance Summary

USD 2,250,000.00

Total Project Cost

USD 3,000,000.00

A senior loan of up to US$ 3.0 million in two tranches of USD 1.5m each. 75 per cent of each tranche will be financed from the EBRD sources in the synthetic local currency; the remaining 25 per cent of each tranche will be financed by Green Climate Fund in US dollars.

Additionality

Financing structure: the EBRD offers financing that is not available in the market (e.g. a longer 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: the EBRD offers an innovative green finance instrument that integrates aspects such as upfront cost and relatively longer payback period of green technologies, climate and environmental, social and governance standards and/or climate and ESG risks considerations into the financing structure.

Standard-setting: Client seeks the EBRD expertise on higher inclusion and gender standards and/or equal opportunities action plans.

Environmental and Social Summary

Categorised FI (2019 ESP). Bank Arvand is an existing client of the Bank and its environmental and social (E&S) performance has been satisfactory to date as evidenced by annual reporting on environmental and social matters (including the 2021 Annual Environmental & Social Report). Bank Arvand has an E&S Policy and an Exclusion List, as well as a HR Policy and Code of Conduct. There is a system in place  for dealing with public enquiries and concerns.

In the context of this new transactions Arvand will be required to continue to comply with Performance Requirements 2, 4 and 9, and to apply EBRD's E&S Risk Management Procedures for Corporate, SME and Microlending. Arvand should continue to provide annual E&S reporting to the Bank on compliance with the applicable PRs and any other E&S matters arising during the year. All projects under the Green Economy Financing Facility (GEFF) will be required to comply with the national environment, health and safety and labour regulations and standards. The project is consistent with the GET approach, and the GET share is 100%. Any renewable energy sub-projects need to comply with the respective E&S Eligibility Criteria for wind, solar, hydro, geothermal or bioenergy projects, as applicable.

Technical Cooperation and Grant Financing

TC: The project  will benefit from a comprehensive Programme-level TC package of US$ 3 million for project preparation, implementation and verifications, as well as overall monitoring of the Programme and capacity building for the PFIs. TC supports gender activities that aim to enhance women and men's equal opportunity to access finance for green technologies.  Source: Green Climate Fund and the Republic of Korea. 

Non-TC:

I. Grant equivalent of GCF concessional funding in the amount of up to US$ 0.06 million. The GCF's margin and front-end-fee will be discounted at 80 per cdent of the EBRD's in order to support the GEFF's overall pricing. Source: Green Climate Fund.

II. Investment Incentives exclusively provided to sub-borrowers along the agricultural value chains in Tajikistan to adopt GET technologies and services, and to become resilient to the impact of climate change in the amount of up to US$ 0.66 million. Source: EU.

Company Contact Information

Gulnora Yakubova
gulnora.yakubova@arvand.tj
+992 44 600 14 00
www.arvand.tj
CJSC Bank Arvand 1A Somoni Avenue Khujand, 735700, Republic of Tajikistan

Implementation summary


PSD last updated

10 Mar 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

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).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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