A senior unsecured AZN loan to be provided under the Financial Intermediaries Framework ("FIF") in the amount of up to USD 9.5 mln equivalent (EUR 7.96 mln) in favour of Bank Respublika.
The project is implemented under Financial Institutions Framework with proceeds to be used for on-lending to private agricultural micro-, small and medium sized enterprises (MSMEs) in Azerbaijan in accordance with the FIF Policy Statement. The transaction will support the leading private bank in Azerbaijan through (i) diversification of its funding structure with medium-term LCY resources and (ii) support of its MSME portfolio growth in the agricultural sector.
ETI score: 60
The project contributes to the objectives of the FIF, supporting the Competitive and Resilient transition qualities.
Competitive: The project will support BR in growing its MSME portfolio and expanding access to LCY finance to sub-borrowers, with a focus on reaching regional clients and attracting new borrowers.
Resilient: The project aims to ensure prudent lending practices and good portfolio quality.
BANK RESPUBLIKA OJSC
Bank Respublika ('BR') is a private Joint Stock Commercial Bank established in 1992. Today, it is a medium-sized bank in Azerbaijan ranking 4th out of 19 private banks (or 5th out of all 26 banks) by assets and by deposits with market shares of 3.2% and 3.3%, respectively, as of YE 2020. BR is headquartered in Baku, has a network of 24 branches and employs 1160 people. It is rated B3 (Positive) by Moody's (April 2021).
EBRD started to cooperate with BR in 2004 and, since then, has extended 14 loans to the bank, including MSME, MCFF and Mortgage lines.
EBRD Finance Summary
Total Project Cost
The loan's additionality would stem from:
Financing structure: EBRD offers financing that is not readily available in the market from commercial sources on reasonable terms and conditions (e.g., grace period and local currency).
Standard-setting: clearly defined eligibility criteria for sub-borrowers as well as compliance with EBRD environmental and social standards, covenants and reporting requirements, going far beyond current market standards, thus contributing to competitiveness and resilience of the financial sector as intended under the FIF.
Environmental and Social Summary
Categorised FI (ESP 2019). BR is an existing client of EBRD and has been satisfactorily implementing EBRD's environmental and social requirements under existing exposures. BR will be required to continue to comply with PRs 2, 4 & 9 and further comply with the EBRD's E&S Procedures for Corporate Loans, SME and Micro Loans, and will be required to submit annual environmental and social reports to the Bank.
Technical Cooperation and Grant Financing
Non-TC: (i) the FLRC of 12.5% under SME LCY Programme provided by SME LCY Special Fund in favour of EBRD; (ii) the FLRC of 10% provided by EBRD Shareholder Special Fund in favour of PFI with a cap of 75% for any single sub-loan.
Company Contact Information
+994 (12) 598 08 00
Khagani str., 21, AZ1000, Baku, Azerbaijan
PSD last updated
14 Aug 2021
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Independent Project Accountability Mechanism (IPAM)
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