Provision of a senior unsecured loan to ACBA bank of up to USD 20 million under the Bank's Resilience Framework (RF). The loan proceeds will used for on-lending to MSMEs and larger companies in line with the Policy Statement of the Resilience Framework.
Similar to many countries, the coronavrius pandemic and efforts to contain it are having a major negative impact on economic activity in Armenia. Against this backdrop, liquidity support to the private sector is pivotal to the country's ability to weather the economic downturn, reduce its vulnerability to internal and external factors and achieve quicker recovery.
With the banking sector accounting for 90% of total financial intermediation in the country, bank loans are the main source of finance for the private sector. However, supply of commercial credit has almost ceased as the banks have shifted their focus on further strengthening their balance sheet buffers.
The proceeds of the Bank's investment will be used to on-lend to private MSMEs and corporates clients in the Covid-19 environment, supporting their funding needs and resilience. EBRD will not only provide funding to ACBA bank, but also provide comfort to other lenders and potentially facilitate attraction of more funding from them by ACBA bank.
ETI score: 70
Resilient: The project will contribute to the financial resilence of ACBA bank by enabling it to continue lending operations despite balance sheet pressures triggered by the economic fallout from the pandemic.
Competitive: The project will help ACBA bank retain its strong position in the market by remaining active and efficient market player through sustained lending operations.
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. It is the 4th largest bank in Armenia in terms of total assets with a dominant position in lending to agriculture and MSMEs in rural areas in particular. Its extensive network of 60 branches in all regions of Armenia allows it to reach out to many potential clients country-wide.
The bank belongs to the local shareholder ACBA Federation CJSC (non-profit organization, which consolidates 10 Agri union in Armenia), which currently owns 95% of shares, while Credit Agricole owns the remaining 5%.
EBRD Finance Summary
A senior unsecured loan in the amount of up to USD 20 million equivalent under the Resilience Framework. The loan will be repaid within 2 years through equal semi-annual instalments commencing after a grace period of one year.
Total Project Cost
COVID-19 crisis response: EBRD offers financing in the environment when most of commercial international lenders are scaling back their exposure to developing countries and reluctant to provide new financing even to good clients.
Environmental and Social Summary
Categorised FI (ESP 2019): ACBA bank will be required to continue to comply with PRs 2, 4 & 9, implement the applicable environmental and social procedures and submit annual ennvironmental and social reports to the Bank.
Technical Cooperation and Grant Financing
Company Contact Information
+ 374 10 31 8888
82-84 Aram str. 0002 Yerevan Republic of Armenia
PSD last updated
23 Jul 2020
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Environmental and Social Policy (ESP)
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More information on the EBRD’s practices in this regard is set out in the ESP.
Integrity and Compliance
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OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to email@example.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.
Access to Information Policy (AIP)
The AIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.
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Independent Project Accountability Mechanism (IPAM)
If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).
IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.
Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requesters’ identities may be kept confidential, upon request.