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).
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.
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).
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
Total Project Cost
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.
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.
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
+992 44 600 14 00
CJSC Bank Arvand 1A Somoni Avenue Khujand, 735700, Republic of Tajikistan
PSD last updated
10 Mar 2022
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