Unibank A/B loan - II

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The proposed project consists of a USD 7.5 million syndicated loan to an Azerbaijani private bank, Unibank. The project will provide Unibank with access to international markets to raise medium term financing for on-lending to local private enterprises. The project will play a significant role in mobilisation of new sources of funds by bringing foreign capital and new international financiers to the Azerbaijani financial sector. This will be the second syndicated loan arranged by EBRD to an Azerbaijani bank, as private banks in Azerbaijan have very limited access to such types of funding. At present, IFIs are the only potential providers of medium and long term financing and the local capital market remains non-existent. It is also expected that the project will have an impact on strengthening private sector companies' (primarily SMEs) development in Azerbaijan by promoting financial intermediation. Unibank Commercial Bank, an open joint-stock company, is one of the leading private banking institutions in Azerbaijan, that was incorporated in 2002 as a result of a merger between M-Bank and Promtechbank. EBRD is a 15% shareholder in Unibank. The project is a syndicated loan structured in two portions. EBRD will finance an A-portion (up to 3 years maturity) of the loan for up to USD 2.5 million, while a B-portion (1 year maturity extendable for another year on the consent of B-lenders) of the loan of up to USD 5.0 million is expected to be financed by the participating banks. USD 7.5 million. Unibank will be required to carry out its operations in accordance with EBRD's Environmental Procedures for Local Banks. In implementing these procedures, the bank will require its borrowers to comply, at a minimum, with national and/or local health, safety, environmental and public consultantion requirements. Not associated with this operation, but Unibank has been benefiting from two projects on the technical assistance: (i) assistance of consultants helping Unibank to establish proper credit approval procedures and processes, and (ii) assistance of consultants focusing on the issues of institutional building. Mr. Faig Huseynov, Chairman of the Management Board Tel: +994 12 598 22 44/45