The financial crisis is increasingly affecting companies operating in the “real” or corporate sector in the Bank’s countries of operations. A shortage of liquidity within the local banking sector, coupled with a deteriorating business outlook is a damaging combination of conditions.
In order to respond to this situation, the Mid-Sized Corporate Support Facility (“the Facility”) is intended to provide the type of financing that, pre-crisis, had typically been provided by local commercial banks. This should enable existing clients of the Bank to alleviate funding constraints arising from a deteriorating financial and operating environment. By so doing, gains in transition that are underway, or which have already been achieved, can be protected.
One of the Facility’s objectives is to encourage commercial banks to keep their engagement with clients or resume financing. Because it will demonstrate EBRD’s support and confidence in its clients, the Facility could catalyse co-lending. The ultimate objective is for Facility loans to be refinanced by commercial banks as soon as normal conditions return to the credit markets.
The transition impact of sub-projects under this facility comes from reinforcing transition achievements of earlier transactions with EBRD existing clients and assisting them in further implementation of pre-agreed transition objectives. The Bank financing would help clients to overcome difficulties and constraints brought by the financial crisis and worsening availability of external funding.
The Facility will be available to existing clients only, from the corporate sector in all countries of the EBRD operations. Clients are expected to be some 25 private companies, which are fundamentally sound, but negatively affected by the credit-crunch.
The Facility will provide up to EUR 250 million in total financing. The maximum amount per subproject is EUR 20 million, and the Facility is expected to cover some 25 individual transactions. The product offered under the Facility will be short term and medium term loans in foreign or local currency when possible. The loans will be tailored to specific needs:
(i) working capital
(ii) balance sheet consolidation
(iii) completion of existing investment programmes
(iv) small new investments limited to improvements of production facilities or energy efficiency. Where possible co-financing with local banks or other IFIs will be sought.
EUR 250 million.
Sub-projects under the Facility framework will be reviewed, categorised and appraised on a case-by-case basis taking into account the categorisation of the existing project with the borrower and any changes that may have occurred since the project was originally approved. Building on the environment, health and safety due diligence undertaken for the existing project, key areas according the EBRD Environmental and Social Policy (2008) will be reviewed and any additional mitigation measures designed and either integrated into existing action plans or agreed in new action plans. Borrowers will be required to provide the Bank with annual reporting on key environmental and social issues and on the implementation of the agreed action plans.
It is envisaged that TC support could be provided to individual sub-projects under the facility for which such need will be identified. Various sources of TC will be tackled appropriately according to the geographic location and sector of the specific projects.
Concerning details regarding the Facility, please contact EBRD bankers:
Mark Webber, phone no: +44 207 338 6052
Philippe Belot, phone no: +44 207 338 7847
Zdenka Vicarova, phone no: +44 207 338 6491
For business opportunities or procurement, contact the client company.
EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
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Text of the PIP