EBRD issues $3 mln to Muganbank for energy efficiency projects
By Aynur Jafarova
The European Bank for Reconstruction and Development (EBRD) has allocated a loan worth $3 million to Azerbaijan's Muganbank to finance energy efficiency projects in the country.
The facility is provided for on-lending to qualifying corporate and individual customers, and will be used for energy efficiency and renewable energy projects, EBRD said on October 1.
The facility will allow Muganbank to help local entrepreneurs and households to acquire and install more energy efficient equipment, appliances and materials, including but not limited to modern production facilities, double-glazed windows, insulation, gas boilers, solar water heaters and rooftop solar panels.
The funds will ultimately help those clients to reduce their energy bills and make their businesses and homes more cost-effective.
The loan is part of the EBRD's Caucasus Energy Efficiency Program (CEEP), which provides loans to local financial institutions to support industrial and residential energy efficiency improvements and renewable energy projects.
Muganbank will be the EBRD's third partner institution in Azerbaijan to secure an energy efficiency facility under CEEP.
The loan will be supported by grant funding from the European Union Neighborhood Investment Facility, the EBRD Shareholder Special Fund and the Austrian Federal Ministry of Finance. The grants will be used for technical assistance and investment incentives for households.
The EBRD has engaged consultants to provide financial institutions, firms and households with technical advice for energy efficiency investments. This support enables industrial clients and homeowners to make the transition from substandard equipment and materials towards more energy efficient and better performing facilities, which will deliver greater results over their lifetime.
Established in 1992Muganbank has a diversified customer base and a strong regional presence. It is a medium-sized bank - ranking 16th among Azerbaijani banks in terms of total assets - which offers a broad range of traditional commercial banking services for its corporate and retail clients.
"The EBRD has been working with Muganbank since 2006 to support financing of the real sector of the economy. This credit facility is a new product for Muganbank, as well as for the market in general and therefore will mark a new phase in our longstanding relationship. We are delighted to support Muganbank further with this credit facility that will help us reach diverse sectors and customers," EBRD's Head of Office in Baku, Neil McKain, said.
The EBRD has been active in Azerbaijan since the country's independence. To date the bank has invested in 146 projects with over $2.5 billion across various sectors of the Azerbaijani economy.
One of the EBRD's priorities in the country is to support the growth of the non-oil private sector by investing in dynamic small and medium-sized enterprises.