Armenian firms to receive new funds from EBRD and EU
- EBRD providing US$ 25 million financial package to Acba bank for on-lending
- Funds to support MSMEs, women-led firms, partly backed by the EU
- EBRD to increase trade finance line by US$ 8.5 million
The European Bank for Reconstruction and Development is providing a financial package of US$ 25 million to Acba bank to boost lending to micro, small and medium-sized enterprises (MSMEs) and women-led firms across Armenia.
The US$ 25 million financial package was signed by CEO of Acba bank Hakob Andreasyan and EBRD President Odile Renaud-Basso during her visit to the country. The signing ceremony was attended by Frank Hess, Head of Cooperation of the Delegation of the European Union to Armenia.
Acba bank will receive US$ 7 million under the EU4Business-EBRD Credit line, which helps local firms become more competitive by improving their productivity, investing in green technologies and increasing the quality of their goods and services. At least 70 per cent of the loans will finance green investments in accordance with the EBRD Green Economy Transition (GET) approach, and the European Union (EU)’s Green Deal. The EU is complementing the offer by providing incentive grants of up to 15 per cent of the loan amount and free technical assistance under its EU4Business initiative. This investment project contributes to the implementation of the EU’s Economic and Investment Plan (EIP) in the Eastern Partnership countries. One of the key flagship priorities of the EIP for Armenia is to promote a sustainable, innovative and competitive economy by directly supporting up to 30,000 SMEs in the country.
As part of the US$ 25 million financial package, US$ 4 million will fall under the Women in Business (WiB) programme that promotes women’s participation in business by boosting access to finance and know-how. The programme combines financing, technical assistance and risk mitigation in the form of first-loss cover for local financial institutions, supported by the EU. It is the second loan that Acba bank has received under this programme.
The remaining US$ 14 million will support the further development of local MSMEs and help Acba bank expand its lending portfolio. The financing will be available in US dollars and/or Armenian dram, thereby protecting borrowers from foreign currency-related risks.
On top of this financial package, the EBRD is stepping up its support to exporters and importers by increasing Acba bank’s trade finance limit by US$ 8.5 million to US$ 12 million under its Trade Facilitation Programme (TFP). This will accommodate the growing market demand and offer trade financing and risk mitigation for trade transactions.
Acba bank is among the leading banks in Armenia, offering a full range of services to individuals and SMEs. It is the fourth-largest bank in Armenia in terms of assets, with a dominant position in lending to the agricultural sector and MSMEs in rural areas.
The EBRD has invested about €2 billion in 201 projects in Armenia since the start of its operations there in 1992.