Uzbek Leasing International Capital Increase

complete

US$ 300,000 equity investment/capital increase and US$ 2 million loan for an existing leasing firm in Uzbekistan targeting private small and medium-sized enterprises (SMEs). The present financing follows on an investment approved by the Board in June 1995. The aim of the project is to continue to support UL by providing key policy guidance through participation in the shareholders Assembly and Supervisory Board and to allow UL to expand its portfolio of SME leases for private enterprises in Uzbekistan. The project will: (i) address shortcomings in the environment for leasing to SMEs; (ii) strengthen the institutional capabilities and business practices of UL; (iii) support the development of a private sector financial institution, which offers alternative financial products for SMEs; and (iv) introduce financial discipline on lessees. Uzbek Leasing International A.O., a private leasing company formed in 1995. The company’s shareholders are Malayan Banking Berhad (Maybank), National Bank for Foreign Economic Activity of Uzbekistan (NBU), International Finance Corporation and the EBRD, which will collectively provide an additional US$ 2 million of equity, on top of the US$ 4 million provided in 1995/96. All shareholders will then contribute to a term loan, of up to US$ 10 million, which will allow Uzbek Leasing (UL) to leverage its equity and expand leases to SMEs. EBRD financing would consist of a US$ 300,000 (EUR 309,000) equity increase and a US$ 2 million (EUR 2.06 million) loan. US$ 2 million of equity and up to US$ 10 million of debt. UL is required to carry out environmental due diligence on its leasing transactions to assess any potential environmental issues associated with leases, such as compliance of leased assets with local/national environmental and health and safety regulations and product standards. Leased machinery/equipment may not be used in relation to activities listed in the Bank's Environmental Exclusion List or for purposes likely to lead to significant environmental degradation. Uzbek credit officers have been trained under a EBRD-funded TC programme and are applying the Bank’s environmental guidelines, including the Bank’s Environmental Exclusion List. None.