ARMENIA ECONOMIC RESILIENCE FACILITY

Promoter – Financial Intermediary

CENTRAL BANK OF THE REPUBLIC OF ARMENIA

Location

• Armenia

Description

Intermediated facility with the Central Bank of the Republic of Armenia ("CBA") to support the economic recovery and resilience of the country by enhancing the access to financing for micro, small, medium-sized enterprises (MSMEs) and mid-caps.

Additionality and Impact

The operation aims to facilitate the access finance of the MSMEs in Armenia. The proposed credit line features a double-intermediation model addressing the fragmentation of the Armenian banking sector, its insufficient access to longer term funding and the scarcity of local currency debt instruments. The operation would be targeted at companies operating in areas outside Yerevan, female entrepreneurs with priority given to green projects. The proposed operation is part of a comprehensive set of measures to support the financially underserved MSMEs in Armenia in line with the priorities of the Joint Communication on the Eastern Partnership policy beyond 2020 which puts a strong emphasis on the access to finance with a view to achieve inclusive and fair economy for all. Furthermore, the proposed operation is a core element of Flagship 1 under the Economic and Investment Plan outlining the priority areas for the Armenian government concerning its cooperation with EU.

Objectives

The operation aims to contribute to the economic recovery and resilience of Armenia by enhancing the access to financing for MSMEs and mid-caps. The facility would support the investment and/or working capital needs of the final beneficiaries with a specific focus on companies operating in areas outside the capital city of Yerevan, female entrepreneurs and green projects.

Sector(s)

• Credit lines - Credit lines

Under Global Europe NDICI guarantee

Under EFSD+ Guarantee

Proposed EIB finance (Approximate amount)

EUR 70 million

Total cost (Approximate amount)

not applicable

Environmental aspects

The Bank will require the intermediary institution to take all the requisite measures to ensure that the procedures, including procurement procedures carried out by the final beneficiaries for the sub-projects receiving Bank financing, will comply with national legislation and the ElB's Environmental and Social Standards as well as international treaties and conventions signed and ratified by or otherwise applicable and binding in the country.

Procurement

The Bank will require the intermediary institution to take all requisite measures to ensure that any procurement procedures carried out by final beneficiaries for the sub-projects that the Bank finances are in accordance with the Bank's Guide to Procurement.

Status

Signed - 27/12/2022