Provision of a subordinated loan to Bank al Etihad of up to USD 35 million equivalent in JOD, including; (i) up to USD 25 million, to support eligible businesses and individuals in Jordan (Tranche A), and (ii) up to USD 10 million for on-lending to women-led SMEs (Tranche B).
The project will support Bank al Etihad in its on-lending activity to (i) eligible businesses and individuals; and (ii) eligible private local women-led SMEs; piloting EBRD's Women in Business programme in Jordan. The loan will allow Bank al Etihad to strengthen its Tier two capital and optimize its capital structure. Also, the bank will develop a transition plan as defined in the EBRD's Paris alignment methodology for indirect finance.
ETI score: 73 (Tranche A), 70 (Tranche B)
For Tranche A; the project supports (i) the Well-Governed TI quality whereby Bank al Etihad commits to develop an institutional transition plan, aiming to progressively align its business practices with the goals of the Paris Agreement and (ii) the Resilient TI quality as the subordinated loan will strengthen its capitalization and provide capital to fund growth.
For Tranche B; the project supports (iii) the Inclusive TI quality whereby Bank al Etihad starts adopting lending practices and business models that are more gender responsive as well as (iv) the Competitive TI quality as the project will support the expansion of lending activities to MSMEs in Jordan, with a focus on women-led MSMEs.
Bank al Etihad was incorporated in 1978 and has since grown to become one of the leading banking groups in Jordan. It ranks third in Jordan in terms of customer deposits and facilities, and fourth in terms of total assets.
EBRD Finance Summary
Up to USD35 million provided by EBRD in JOD equivalent (JOD24.8 million).
Total Project Cost
Up to USD35 million in JOD equivalent (JOD24.8 million).
The project offers an innovative financing structure through Bank al Etihad's commitment to a transition plan with specific milestones. Moreover, this will be the first project in Jordan to follow EBRD WiB approach and will offer Bank al Etihad capacity building through technical assistance material to the timely realization of the project's objectives.
Environmental and Social Summary
Categorised FI (ESP 2019): Bank al Etihad is an existing client of EBRD and performance on environmental and social (E&S) issues to date has been satisfactory and complies with the EBRD's Performance Requirements (PRs) 2, 4 and 9 under existing exposures. For this transaction, BAE is required to continue to comply with PRs 2, 4 & 9, adhere to the EBRD's E&S requirements and submit AESRs to the Bank. The project requires BAE to apply the E&S Exclusion List, which was amended for the 2019 policy, and also apply the Referral List as per PR9.
Technical Cooperation and Grant Financing
Bank al Etihad will benefit from Technical Cooperation (TC) funds under the EBRD's Corporate Climate Governance (CCG) Client Support Facility, supported by the EBRD Shareholders Special Fund. This TC will help BAE develop an institutional transition plan, which will aim to progressively align its business practices and financial flows with the goals of the Paris Agreement. Moreover, BAE will also benefit from TC funds, supported by the EBRD Shareholder Special Fund to help BAE in strengthening its lending capacity to women, including for improved market understanding, product development, risk management, and marketing.
Company Contact Information
+962 6 560 7011
PSD last updated
20 Jan 2023
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