Armenia Multi-Bank Framework II

complete

The USD 40 million framework aims to support the increase of financial intermediation of Armenian banking system and support the economic progress of the country by making much needed medium-term funding available to Armenian micro and small business via credit lines to selected Armenian commercial banks. Specifically, the new framework will include senior debt facilities for mortgage lending and energy efficiency lending, and leasing. In addition the framework would further expand senior debt facilities for Micro and SME lending, as well as convertible debt and equity investments. This USD 40 million multi-bank framework builds on the positive experience of a previous EUR 10 million framework for the Armenian financial sector. The facility will support the Armenian financial sector through a combination of debt and equity financing and will promote adherence to best practices in corporate governance, strengthen financial performance and financial discipline. In addition, the facility will provide significant support to the micro, small and medium-sized enterprise sector in Armenia by providing access to medium and long-term financing. The technical assistance to be provided under this operation will support the institutional development and micro and small business lending units of the participating banks and leasing companies. Existing and new partner banks as well as leasing companies. The first partner bank under the new facility will be Anelik Bank, an existing client of the Bank. A USD 40 million multi-bank framework facility. The first funding to be provided is proposed to be a USD 2.5 million SME loan to Anelik Bank. Not applicable. The project will comply with EBRD’s Environmental Procedures for Small and Micro Loans and for Intermediated Financing through Local Banks in respect to MSME components. These include compliance with applicable national environmental, health and safety legislation, adherence to the Environmental Exclusion List, submission of Annual Environmental Report to the Bank and nomination of a senior staff member in charge of the environmental issues. In 2005 USAID committed USD 1.5 million in TC funding for MSE credit under the original framework. This amount has been supplemented by USD 360,000 (EUR 300,000) from EBRD's multi-donor ETC fund. The total of USD 1.86 million will be used to support the funding provided for MSE lending under both the original framework and the second framework.