Azerbaijan: EIB Global increases support for MSMEs with additional financing for Bank Respublika

• The European Investment Bank (EIB Global) signs a €2 million top-up to its existing €10 million loan to Bank Respublika.
• The financing will expand access to local currency funding for micro, small and medium-sized enterprises
• The operation coincides with Bank Respublika’s pilot use of a new local currency hedging mechanism introduced by the Central Bank of Azerbaijan.

The European Investment Bank’s international partnerships and development arm, EIB Global, has signed a €2 million top-up to the outstanding €10 million loan to Bank Respublika, reinforcing the European Union’s commitment to expanding access to finance for micro, small and medium-sized enterprises in Azerbaijan. The additional financing builds on the success of the original operation signed in 2024.

The new funding will enable Bank Respublika to further scale up lending to Azerbaijani businesses, particularly by increasing the availability of loans in Azerbaijani manat, helping local enterprises access more stable and affordable financing.

MSMEs play a central role in Azerbaijan’s economic diversification and employment. Strengthening their access to finance is therefore essential to supporting private sector development, entrepreneurship and sustainable economic growth

The top-up comes at a strategic moment as Bank Respublika prepares to pilot the innovative local currency hedging mechanism introduced by the Central Bank of Azerbaijan. This facility will allow the bank to hedge foreign exchange exposures more effectively, helping create a more stable environment for MSME lending in the country. By enabling the expansion of local currency lending while managing risks efficiently, the operation supports a practical and timely application of this new financial instrument.

This continued cooperation reflects the strong partnership between EIB Global and Bank Respublika, one of Azerbaijan’s leading financial institutions and a committed supporter of MSMEs

EIB Vice-President Karl Nehammer, who oversees the Bank’s operations in the Eastern Partnership region, said:

“Micro, small and medium-sized enterprises are at the heart of Azerbaijan’s economy. Through the successful partnership with Bank Respublika, EIB Global is helping local businesses access the funding they need to grow, create jobs and innovate. Providing financing in local currency is especially important, as it supports the resilience of businesses and strengthens the country’s private sector.”

The Ambassador of the European Union to the Republic of Azerbaijan, Marijana KUJUNDŽIĆ said“Developing deeper and more resilient financial markets is key to supporting Azerbaijan’s economic transformation. The Central Bank’s new local currency hedging mechanism is an important innovation that can help banks better manage exchange rate risks and expand lending in local currency. Initiatives like this, combined with partnerships with institutions such as the EIB, contribute to a stronger environment for private sector growth.”

Chairman of the Management Board of Bank Respublika, Tariyel Ismayilov, noted:

“We highly value the trust of EIB Global, which considers Bank Respublika one of its key partners in Azerbaijan. I would also like to highlight the Central Bank’s modern, flexible and proactive approach to market needs. The introduction of the currency risk hedging mechanism expands opportunities for international financing and strengthens lending to businesses in national currency.”