A multi-bank framework facility for providing senior debt, senior convertible debt and equity capital to local Armenian banks. The first operation under the framework will be a credit line to the Armenian Joint-Stock Agrobank (Armagrobank). The project represents the first EBRD financial sector project in Armenia. Its primary objectives are to support the development of private small and medium-sized enterprises and the banking sector.
The facility will support the banking sector through a combination of debt and equity financing and will promote adherence to good standards of corporate governance, strengthening financial performance and ensuring financial discipline. The technical assistance to be provided under this operation will support the institutional development of the participating banks. In addition, the facility will provide significant support to the small and medium-sized enterprise sector in Armenia by providing access to medium and long-term credit, indirectly contributing to job creation.
Bank clients under the proposed multi-bank framework facility will be Armenian private commercial banks with a satisfactory level of creditworthiness and capable management teams. The first proposed participating bank under the facility is the Armenian Joint-Stock Agrobank (Armagrobank).
An ECU 10 million multi-bank framework facility. The first investment will be a US$ 3.5 million senior debt to Armagrobank.
Participating banks will follow the EBRD's Environmental Procedures for Local Banks in relation to all sub-loans financed through the facility. In implementing these procedures, banks will assess potential environmental issues associated with sub-projects, which are required to comply, at a minimum, with Armenian health, safety, environmental and public consultation requirements.
ECU 750,000 technical assistance package has been approved. The funding has been secured from Japanese funds and the consultants will be selected in December 1998. The technical assistance will include a credit advisor and support for the participating banks’ institution building.
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