EBRD to support green economy transition in Azerbaijan through private bank

A senior unsecured loan to be provided under the Financial Intermediaries Framework ("FIF") in the amount of up to $ 7.5 million equivalent (6.9 million) in favour of Azerbaijan’s Bank Respublika, the European Bank for Reconstruction and Developmeny (EBRD) said, Report informs.

The proposed loan will support the financing of private MSMEs in Azerbaijan, BR's core business, and enhance the bank's LCY medium-term funding base, addressing the acute gaps as per the priorities identified in the FI Sector Strategy and the Country Strategy for Azerbaijan, including reaching out to underserved segments. Following the successful utilisation of two previous MSME facilities, the new one will be the first ever with the GET (Green Economy Transition) component of 50%.

The project will benefit from the European Fund for Sustainable Development ("EFSD") Plus Programme in the form of a guarantee (17% net first loss risk cover in favor of EBRD).

EBRD offers an innovative green finance instrument that integrates aspects such as climate and environmental, social and governance (ESG) standards and/or climate and ESG risk considerations into the financing structure.

EBRD offers an innovative financing structure (risk sharing) on commercial terms not available from other banks.