Azernews.Az

By Gulgiz Dadashova

The European Bank for Reconstruction and Development announced that it will issue $ 9.4 million to Azerbaijan's Bank Respublika, which has wide national coverage and is the country's sixth-largest bank in terms of assets.

The bank reported that a credit line of $ 5.4 million will be used for on-lending to micro, small, and medium-sized enterprises (MSMEs) to finance investments and working capital for local businesses with medium and long-term loans This will help to address the poor access to credit faced by enterprises in the real sector - strategic priority for EBRD in Azerbaijan.

Also, $ 1 million of the loan will be provided by BP and its co-ventures aimed to support MSMEs along the BTC/SCP pipelines as part of the Sustainable Development Initiative Programme in Azerbaijan.

Another credit line of $ 4 million will be used for mortgage lending to private individuals, enabling them to finance the purchase, renovation or construction of homes.

Head of Resident Office Neil McKain said small and medium-sized businesses are crucial for the sustainable development of the non-oil and gas economy in Azerbaijan

"We are pleased that Bank Respublika will be the first financial institution to benefit from this new phase of cooperation with BP and its co-ventures under the Sustainable Development Initiative, which will bring more financing to the MSME sector and improve access to finance," he said.

The EBRD will issue the funds under its Azerbaijan Multi-Bank Framework Financing Facility, within the framework of which it extends loans to partner banks in Azerbaijan for on-lending to individuals and private companies.

Bank Respublika has been an active partner of EBRD since 2004 and was the first bank in Azerbaijan to receive an EBRD mortgage development financing loan in 2008.

The EBRD invests in the enterprise, financial and infrastructure sectors to promote sustainable growth in Azerbaijan.

Since the start of its operations in the country, the EBRD has invested around $ 2 billion in about 137 projects, with over 90 per cent of these projects investing in the development of the private sector. Around 73 transactions with a total value of approximately $ 540 million have been signed with financial institutions in Azerbaijan. In addition to partnering with Bank Respublika the EBRD has signed twelve other projects totaling $ 90.1 million during 2013, all in the private sector.