Senior unsecured loan in the amount of up to USD 14 million to ACBA Bank for on-lending to local private micro, small and medium enterprises ("MSMEs").
The project will support ACBA to expand lending to local SME segment. The loan will enable ACBA to increase outreach and meet unsatisfied demand for longer term LCY funding from SMEs.
ETI score: 60
Competitive: The project supports ACBA's lending to private SMEs in Armenia, where the gaps are Medium, by a multiple of EBRD's funding. The project focuses on regional outreach and attraction of new SME clients.
Resilient: Requirements to comply with financial covenants and portfolio quality ratios will contribute to the resilience of the institution.
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. ACBA is the 4th largest bank by total assets with a dominant position in lending to agriculture and MSMEs in rural areas in particular.
ACBA's shareholders are:
- ACBA Federation CJSC, non-profit organization, which consolidates 10 Agri unions in Armenia- 83.80%;
- Credit Agricole S.A. through its subsidiary Sacam International SJSC - 4.55%;
- more than 5,000 shareholders, including legal entities and individuals - 11.65% (shares are listed on Armenia Securities Exchange).
EBRD Finance Summary
Total Project Cost
Financing Structure: EBRD offers a tenor, which is above the market average and is necessary to structure the project.
Standard-setting: The project will benefit from EBRD expertise on higher financial standards, including through financial covenants.
Environmental and Social Summary
Categorised FI (2019 ESP). ACBA is a long-standing client of the EBRD an ACBA's past performance and annual environmental and social (E&S) reporting to date for the existing exposures has been satisfactory. ACBA will need to continue 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; adhere to the updated EBRD's Environmental and Social Exclusion List as well as Referral List introduced with ESP 2019 and submit Annual E&S Reports to the Bank. ACBA's borrowers will be required to comply with applicable national environmental, health and safety and labour requirements. If any EBRD funds will be utilised to fund solar sub projects, such sub-projects should be managed in line with 'The Proposed Management Approach for Solar Supply Chain Risk Management' (CS/FO/21-35), (CS/FO/21-35 (Add 2)) and any subsequent guidance developed under that approach.
Technical Cooperation and Grant Financing
EBRD will provide a tailor-made Technical Cooperation programme to strengthen the corporate lending procedures at ACBA bank. The expected donor funding source is EBRD SSF. ACBA will provide a client contribution, in the form of cash, equivalent to 20% of the overall TC amount.
The loan will also benefit from FLRC of 12.5% under the SME LCY Programme.
Company Contact Information
+ 374 10 31 8888
82-84 Aram str. / 0002 Yerevan / Republic of Armenia
PSD last updated
31 Aug 2022
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