The EBRD promotes climate finance and SME lending in Tajikistan.
- The EBRD will provide a $7 million package for Arvand Bank in Tajikistan
- Promotion of green technologies and new opportunities for women-led enterprises
- An agreement on participation in risk sharing to stimulate MPS lending in rural areas
The European Bank for Reconstruction and Development (EBRD) provides fresh funds and creates new opportunities for the growth of local companies in Tajikistan by offering a financial package in the amount of US$ 7 million to one of the largest creditors in the country — Arvand Bank. The signing ceremonies were held in Khorog and Dangar.The package includes a US$ 3 million credit line under the Bank's "Green Economy Financing Mechanism" (GEFF), which will expand access to green technologies for local households and small and medium-sized enterprises (SMEs) in the country. This credit line is accompanied by concession financing in the amount of 0.75 million US dollars provided by the Green Climate Fund (GCF).
GEFF, supported in Tajikistan by GCF and the Republic of Korea, will also use funds from the Tajik Agribusiness Competitiveness Enhancement Program (ECTAP) of the European Union.
The second component of the US$ 1 million financial package is provided within the framework of the EBRD's Women of the Step Program, supported by the Women Entrepreneurs Financing Initiative (We-Fi) and Switzerland through the Small Business Support Fund (SBIF). This component of the financial package will contribute to the development of women's entrepreneurship and business activity, helping to gain access to finance, know-how and technical advice.
The two financial institutions are also signing a risk-sharing agreement worth up to US$ 3 million, under which the EBRD will have to assume up to 50% of the risks on loans issued by Arvand Bank. This will allow the Tajik lender to provide much-needed loans to small businesses in rural and remote areas of the country. Arvand Bank is the third financial institution in the country to sign a similar loan agreement with the EBRD.
The GEFF program is part of the Bank's approach to the "Transition to a Green Economy" (GET). It is implemented through a network consisting of more than 145 local financial institutions in 27 countries, and today, it is supported by EBRD financing in the amount of more than 4.6 billion euros for 190,000 clients. These projects have resulted in an annual reduction of CO2 emissions by more than 8.6 million tons.
To date, the Bank (EBRD) has supported more than 90,000 women in 24 countries through business finance and consulting, training and mentoring projects as part of its Women in Business initiative.
To date, the EBRD has invested 854 million euros in 148 projects in the economy of Tajikistan.
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Author: Anton Usov.