- EBRD shares risk on partner bank loans worth US$ 38 million to local companies
- Financing provided through the EBRD’s Risk Sharing Framework
- Two new risk-sharing frameworks with banks in Armenia and Moldova
The European Bank for Reconstruction and Development (EBRD) has joined forces with partner banks in Central Asia, eastern Europe and the Western Balkans to boost private-sector finance to local companies.
The Bank is participating in nine loans, worth a total of US$38 million, extended by partner banks through the EBRD’s Risk Sharing Framework (RSF). Under the RSF, the partner banks will channel much-needed funds to and create new growth opportunities for local enterprises. The loans will support the working-capital needs of domestic businesses, help them expand their operations and improve their climate resilience.
The EBRD is sharing the risk on a US$ 2.2 million equivalent loan provided by Kazakhstan’s Bank CenterCredit to Viva Pharm, a manufacturer and distributor of pharmaceuticals, to help expand its production. In another joint transaction with Bank CenterCredit, the EBRD will share up to 50 per cent of the risk on a US$ 1.1 million local-currency equivalent loan to packaging producer Intellpack. It will use the financing to fund capex investments in its production line, enhancing the company’s resource and energy efficiency.
A US$ 1.1 million equivalent loan provided by Bank CenterCredit to KPK Zeta LLP, a furniture producer and distributor, meanwhile, will help the company expand its production operations and launch a new soft furniture factory. The loan is supported by the EBRD’s Resources Efficiency and Transformation (ResET) programme, designed to transfer technology in the area of climate change mitigation and adaptation, financed by the Global Environment Facility Trust Fund. A grant of US$ 174,000 will help the company introduce technologies for energy efficiency.
Uzbekistan’s Hamkor Bank is extending a US$ 2 million loan to tour operator Dolores Travel Services to increase its vehicle fleet, as well as a US$ 0.8 million loan to restaurant chain YaponaMama (Mika Group) to open new restaurants and acquire electric delivery scooters. Mika Group will also benefit from a US$ 51,000 grant provided by the EBRD’s Finance and Technology Transfer Centre for Climate Change Framework (FINTECC). In recognition of Mika Group’s industry leadership, the Bank admitted the company into its flagship Blue Ribbon programme for market-leading enterprises.
Idea Concept Group is a leading retailer in consumer electronics and household appliances, with more than 52 chain stores across Uzbekistan. With the participation of the EBRD, UzPromStroy Bank and Idea Concept Group agreed a US$ 2 million working capital loan to further support its market growth and store expansion.
Other agreements with partner banks are supporting the energy trading operations of GSA in Albania, WeTrade, a key agribusiness player in Moldova, and Artezian, a soft drinks producer from the Kyrgyz Republic.
The Bank has also signed new risk-sharing agreements for €10 million each with Armenia’s inecobank and Moldova’s MAIB.
The EBRD RSF is a flagship product of the EBRD's Small Business Initiative, which supports small and medium-sized enterprises (SMEs) and local firms and helps them grow by facilitating access to finance and business advice. By sharing the risk with its partner banks, the EBRD boosts local banks’ ability to lend to SMEs, which often face difficulty accessing tailored finance. The framework also helps participating banks to enhance their risk-taking capacity, receive capital relief and improve their risk management.
The new loans build on the EBRD’s strong track record to date of participating in 320 RSF sub-loans for a total of €700 million with 37 partner banks.
