Armenian Multi-Bank Framework II Extension II

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The Armenia Multi-Bank Framework Facility II (AMBFF II), established to provide loans and equity to commercial banks and leasing companies in Armenia, was originally approved by the Board on 8 March 2006 for an amount of $40 million, and then the facility was extended for $80 million on 9 November 2007. The EBRD is now considering a further $100 million extension to AMBFF II (AMBFF II extension II) in order to support increased financial intermediation and the development of the financial sector in Armenia, to contribute to economic development by providing medium to long-term funding to selected Armenian financial intermediaries. The Facility will seek to develop new products for financial institutions, including provision of local currency loans. The AMBFF II extension II builds on the positive experience of the previous $80 million framework provided 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 and support financial performance and stability in partner financial intermediaries. In addition, the facility will provide significant support to the micro, small and medium-sized enterprise sector in Armenia by giving access to medium and long-term financing. The technical assistance to be provided on an as-needed basis will support the institutional development of micro and small business lending units of the participating banks and leasing companies. Existing Partner Bank (PBs) under AMBFF II and new partner financial intermediaries, including banks and other FIs. $100 million. Separate loan and equity agreements to be entered into by the Bank with the existing and new partner FIs, with amounts determined on a case-by-case basis. Not applicable. The participating banks will conduct their business in compliance with the EBRD Performance Requirement 2 Labour and Working Conditions and comply with EBRD’s Performance Requirement 9 Financial Intermediaries in their sub-lending. These include compliance with applicable national environmental, health and safety legislation, adherence to the Environmental Exclusion List, submission of Annual Report on the implementation of PRs 1 and 9 and any environmental and social issues related to sub-lending, and nomination of a senior staff member in charge of the environmental issues. In 2005, $1.86 million of donor TC funding was secured from USAID and EBRD’s ETC Multi-Donor Fund for consultants to assist PBs to build up and maintain a sustainable MSE lending through the Armenian Micro-lending Programme. In 2008, an additional € 0.9 million was provided through the ETC Multi- Donor Fund and Shareholders’ Special Fund to support PBs on a case-by-case basis to improve delivery efficiencies and introduce new products. SME lending in new PBs is currently supported by an institution-building TC component in the amount of € 350,000 from the ETC Multi-Donor Fund. Those commercial banks approved under the Framework for mortgage lines will be supported where necessary by TC funds, in order to train staff and assist in developing and expanding mortgage lending operations. Not applicable.