Provision of a senior unsecured loan of up to EUR 2 million to NLB Banka a.d. Podgorica ("NLBP") for on-lending to the residential sector in Montenegro. The loan will have two equal tranches. The second tranche is uncommitted and the commitment is EBRD's absolute discretion. The loan is envisaged under the Western Balkans Green Economy Financing Facility II ("WB GEFF II"). This will be the first WB GEFF II loan to NLBP and will enable the bank to promote green economy investments in the country.
The loan will support investments in high-performance green technologies, materials and solutions undertaken in privately-owned residential dwellings or buildings. 100 per cent of the use of the proceeds will be eligible to Green Economy Transition ("GET") investments.
ETI score: 80
The project contributes to the overall objectives of WB GEFF II, supporting the Green and Competitive TI qualities.
Green: The project will contribute towards building a green economy by facilitating the expansion of lending for investments into high performance residential green economy technologies. The innovative lines of finance available through local financial institutions will help address the entrenched behaviour and demonstrate a business case for investing in higher performance technologies to end-beneficiaries, partner financial institutions and other market participants, thus creating green investment demand. The allocation to New Dwelling Window will be capped at 30% of the WB GEFF II framework.
Competitive: The project will contribute towards building a more competitive financial sector by strengthening the capacity of NLBP for financing green economy projects. Furthermore, the introduction of lending products based on green economy requirements going beyond prevailing standards will stimulate the development of the market for and supply of high performance green technologies, materials and services.
NLB BANKA AD PODGORICA
NLB banka AD Podgorica (NLBP) is the second largest universal bank in Montenegro with total assets of EUR 772 mln as of 1H 2022 (market share of 14.1%) owned by NLB dd Ljubljana. In November 2021, NLBP completed the process of merging with Komercijalna banka Podgorica (KBP).
EBRD Finance Summary
Total Project Cost
Additionality is achieved by combining the necessary long-term financing with TC and investment incentives into a package that promotes residential green economy investments in Montenegro. EBRD remains an only international financial institution in the Western Balkans which supports the green transition of the residential sector through intermediary finance in a comprehensive manner.
Environmental and Social Summary
Categorised FI (2019 ESP). NLBP will be required to implement the Environmental and Social Risk Management Procedures for Micro, SME and Corporate Lending; comply with the EBRD's Performance Requirements (PRs) 2, 4 and 9 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. All sub-loans will be required to comply with national environmental, health, safety and labour (EHSL) requirements. Investments into renewable energy will be required to following the appropriate EBRD Guidelines on renewables. Additionally, should the use of proceeds from EBRD investment be allocated to future solar sub-projects, the project will need to comply with the EBRD Solar Supply Chain Risk Management Approach.
Technical Cooperation and Grant Financing
TC: up to €2.965 million have been set for TC support at the facility level to support both PFIs and sub-borrowers (including individuals, housing collectives, suppliers and vendors of green technologies, and service providers). The objective of the TC is to transfer know-how and raise awareness about investment in modern energy efficiency technologies in the residential building sector to support a green economy transition in the WB. The TC is essential to supporting the preparation, implementation and monitoring of the facility. The TC fund for the proposed transaction is sourced from the SSF and the Government of Austria via HIPCA.
Non-TC: EUR 409,000 for investment incentives to sub-borrowers for the implementation of eligible sub-projects in line with the Policy Statement. The funds are sourced from the EU through the Western Balkans Investment Framework ("WBIF").
Company Contact Information
+382 20 402 225
+382 20 402 061
Stanka Dragojevića 46 81000 Podgorica Montenegro
PSD last updated
09 Dec 2022
Further information regarding the EBRD’s approach to measuring transition impact is available here.
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