Provision of a senior unsecured loan of up to EUR 5m to be provided in two tranches of EUR 3m and EUR 2m under the Go Digital Pilot in BiH programme (the "Programme"). The second tranche of EUR 2m will be uncommitted and its commitment will be at EBRD's sole discretion. This will be the first transaction under the Programme. The loan will be fully guaranteed by the sole shareholder, ProCredit Holding AG & Co. KGaA. The Programme is supported with donor funds in the total amount of EUR 9m from the European Union.
The Project supports the aim of the Programme to: (i) improve SMEs' access to finance in order to invest additional resources to introduce EU standards through the provision of financing and investment incentives; (ii) pilot an approach to supporting SMEs that invest in automation and digitalisation, (iii) support transition to a green economy ("GET technologies"), by targeting a GET-eligible share of at least 60%, and (iv) increase the awareness and knowledge of SMEs in BiH through the Advice for Small Business ("ASB") services with a focus on automation and digitalisation projects.
ETI score: 65
The Project contributes to the overall objectives of the Go Digital Pilot in BiH Programme, supporting the Competitive and Green TI qualities.
Competitive: The Project will be encouraging the competitiveness of SMEs in Bosnia and Herzegovina, by (i) supporting SMEs in accessing finance towards EU standards investments; (ii) by targeting the financing of a significant share of automation and digitalisation among those investments; and (iii) by offering potential and participating sub-borrowers advice and know-how for overall greater competitiveness of SMEs with a focus of introducing and implementing automation and digitalisation investments.
Green: The Project will also contribute to the green transition impact quality by addressing energy efficiency as part of the eligible activities of investments of SMEs in BiH. The project will contribute to building a green economy in the country by facilitating the expansion of climate change mitigation investments and sharing the positive demonstration effect through on-lending to SMEs.
PROCREDIT BANK DD
ProCredit Bank dd BiH ("PCBiH") is an SME oriented commercial bank in Bosnia and Herzegovina with 2.0% market share in terms of assets, 2.4% market share in terms of gross loans and 1.6% in terms of deposits as of 31 Dec 2021.
EBRD Finance Summary
Total Project Cost
Additionality is achieved by combining the necessary long-term financing via PCBiH with TC and investment incentives into a package that promotes automation and digitalisation as well as green lending in Bosnia and Herzegovina.
Environmental and Social Summary
Categorised FI (ESP 2019): PCBiH is an existing client of the Bank and will be required to continue to comply with PRs 2, 4 & 9, and further, implement and comply with EBRD's Environmental & Social (E&S) risk management procedures for Micro, SME and Corporate Lending including adherence to the expanded EBRD E&S Exclusion List and Referral List introduced with ESP 2019 and submit annual E&S reports to the Bank. The Project's use of proceeds or allocated multiple may include solar sub-projects. Such sub-projects will be managed in line with 'The Proposed Management Approach for Solar Supply Chain Risk Management' (CS/FO/21-35) and any subsequent guidance developed under that approach. Sub-projects under this framework (OpID 53186) will be reviewed on a case-by-case basis by ESD, with the expected GET-share of 60%.
Technical Cooperation and Grant Financing
The Go Digital in BiH Programme is supported with grant funds from the European Union for financing of (i) Investment Incentive payments to sub-borrowers ("Non-TC") of total EUR 6,000,000, and (ii) Technical Cooperation of total EUR 1,600,500.
Non-TC: Grant funds are provided for investment incentives to sub-borrowers for the implementation of eligible investments in line with the Go Digital Pilot in BiH Policy Statement.
TC: The TC includes support for a Project Consultant that will assist with the implementation and monitoring of the entire Programme and a separate Verification Consultant that will verify the technical implementation of the investments by the sub-borrowers before the incentive payment is released. Additionally, ASB, with a total of EUR 994,500 grant from the European Union, will support SMEs (that could be potential or participating sub-borrowers under the Programme) with direct advice, training and other outreach activities with a focus on automation and digitalisation priority areas. These funds will be spent according to ASB policies of co-payment.
Company Contact Information
Franca Lehara bb, 71000 Sarajevo, Bosnia and Herzegovina
PSD last updated
23 Jun 2022
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