Provision of a five-year senior unsecured loan of up to EUR 15 million to OTP Bank SA (OTP Bank) under the SME Competitiveness Programme in the Eastern Partnership for on-lending to eligible micro, small and medium enterprises (MSMEs). The loan will be available in three tranches of EUR 5 million each. In addition to long-term financing, eligible sub-borrowers will receive technical assistance funded by the European Union and grant support in the form of investment incentives upon the completion of their investment projects.
The SME Competitiveness Programme in the Eastern Partnership is a follow-on facility of the existing FI DCFTA Blended Finance Programme (DCFTA), designed for Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine to support upgrades in micro, small and medium-sized enterprises (MSME) to European Union (EU) standards. The proposed project will enable OTP Bank to extend loans for investment purposes to local SMEs, financing upgrades of technology and equipment necessary to meet EU standards in terms of product quality, health and safety measures and environmental preservation and thus will help businesses to become greener and more competitive.
ETI score: 75
"Competitive": OTP Bank will further expand its MSME portfolio with a focus on financing investments leading to compliance with EU directives, facilitating Moldovan MSMEs increased competitiveness.
"Resilient": OTP Bank will be expected to maintain adequate portfolio quality.
MOBIASBANCA - OTP GROUP SA
OTP Bank is 98.3% owned subsidiary of OTP Bank Nyrt, Hungary, ranked 3rd (out of 11) largest bank in Moldova in terms of total assets (EUR 955m) and market shares of 15% and 16% on loans and deposits, respectively as of September 2022.
EBRD Finance Summary
Total Project Cost
Key sources of additionality under the project are (i) Financing structure (long-term tenor in support of investments by Moldovan MSMES) and (ii) Knowledge, innovation and capacity building (technical assistance under the programme to the banks and MSMEs will support timely realisation of EU-compliant investments in Moldova).
Environmental and Social Summary
Categorized FI (ESP 2019). OTP Bank will be required to continue to comply with Performance Requirements 2, 4 & 9, the EBRD's Environmental and Social Procedures for Corporate Loans, SME and Micro Loans and to continue to submit annual environmental and social reports to the Bank. Mobiasbanca's borrowers will be required to comply with applicable national environmental, health and safety and labour requirements.
The project is consistent with the EBRDs Green Economy Transition (GET) approach, aiming to achieve 70% GET share.
Technical Cooperation and Grant Financing
MSME sub-borrowers will benefit from financial incentives (up to 10-15 per cent of the lower of sub-loan disbursed amount or investment cost) for eligible sub-projects, while OTP Bank will receive technical assistance from dedicated consultants towards investment projects preparation and implementation.
TC and non-TC source: European Union Neighbourhood Investment Platform.
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PSD last updated
05 Dec 2022
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