Provision of a senior loan of up to US$ 2.0 million (€1.6 million equivalent) to Arvand Bank under GEFF Tajikistan. The financing will promote investments in climate change mitigation and adaptation technologies
The proposed operation complies with the GCF GEFF Regional Framework criteria. 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 and to contribute to Tajikistan's transition to an environmentally sustainable and climate-resilient economy.
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 renewable energy/energy efficiency/climate resilient technologies.
ARVAND BANK CJSC
Arvand was transformed from an MFI into bank in September 2019 and currently operates as a fully-fledged universal commercial bank, offering a full range of banking services, primarily to retail segment.
As of end 2020 Arvand Bank was the seventh-largest bank by assets and fifth in terms of loan book in Tajikistan. Arvand bank is a longstanding EBRD partner bank serving around 39,000 borrowers and 49,000 deposit customers through 8 branches and 63 customer service outlets across Tajikistan as of end 2020. The relationship between EBRD and Arvand began in 2006, and since then comprised 11 projects in the total amount of USD 13.5m. The bank successfully took part in number of EBRD`s programmes (TAFF, MSE, ClimAdapt, WiB and RF) and currently developing its business under EBRD TFP programme.
EBRD Finance Summary
Total Project Cost
A senior loan of up to US$ 2.0 million (€ 1.6 million equivalent) in two tranches of USD 1.0m each. 75% of each tranche will be financed from the EBRD sources in the synthetic local currency; the remaining 25% of each tranche will be financed by Green Climate Fund in US dollars.
Financing structure: 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: 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.
Gender additionality: Gender additionality will be achieved by ensuring that gender considerations are reflected in the implementation of the transaction through enhancing PFIs' standards of business conduct/training of PFI staff, awareness raising campaigns to target both female and male sub-borrowers of green financing.
Environmental and Social Summary
Bank 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 and SME loans. 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.
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 Republic of Korea.
I. Grant equivalent of GCF concessional funding in the amount of up to US$ 0.04 million. The GCF's margin and front-end-fee will be discounted at 80% of the EBRD's in order to support the GEFF's overall pricing. Source: Green Climate Fund.
II. Investment Incentives helping to stimulate the demand for incipient or high performing technologies in the amount of up to US$ 0.44 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
05 Mar 2021
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Independent Project Accountability Mechanism (IPAM)
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