Monday, October 8 2012 22:02
GGF and Inecobank sign USD 10 Million energy efficiency loan agreement
ArmInfo. The Green for Growth Fund, Southeast Europe (GGF, the Fund) and Inecobank CJSC (Inecobank, the Bank) in Yerevan, Armenia, signed a USD 10 million loan agreement to expand the Bank's lending capacity for energy efficiency (EE) projects at the retail and small and medium enterprise (SME) level.
The press service of GGF reports that the loan is instrumental in supporting Inecobank's strategy to evolve into a green bank. This is the GGF's first energy efficiency loan to a financial institution in the European Neighborhood region (ENR) after the Fund's decision in summer 2012 to expand investment activities into this geographic area of dynamic growth.
The loan is dedicated to financing mainly standard EE measures. Such projects include the installation of energy efficient windows and doors, the upgrading of thermal insulation in walls, of lighting and heating systems in case of retail clients and the upgrading and/or acquisition of EE systems and equipment in case of corporate and SME clients. Inecobank's portfolio of EE subloans to be funded by the GGF's USD 10 million loan is projected to achieve minimum 20% in primary energy savings. This will ultimately translate in annual energy savings exceeding 36,000 MWh and CO2 reductions of over 8,200 tons per year. To illustrate the green benefits: it would take about 82 hectares of additional forest ten years to absorb the 8,200 tons of CO2 generated in one year.*
The loan will be accompanied by comprehensive support – provided by the GGF Technical Assistance Facility – in developing and implementing an EE lending strategy and products complemented by extensive staff training programs.
Inecobank is a universal bank with a strategic focus on the micro, small and medium enterprise (MSME) sector, strongly committed to expanding the EE lending activities. Its excellent customer relations are instrumental in spreading GGF financing to a wide range of loan customers throughout Armenia. With a market share of 4.4 percent as at June 2012, Inecobank ranks 11th in the Armenian banking sector by assets.
"The GGF is delighted to announce this cooperation with Inecobank, a solid financial institution with a strong commitment to energy efficiency lending. This loan agreement also marks the GGF's first step in expanding its activities into the European Neighborhood region. It is by working with sound institutions like Inecobank that we can maximize the Fund's outreach, while effectively contributing towards a reduction of Armenia's energy consumption," said Christopher Knowles, Chairman of the Green for Growth Fund, Southeast Europe.
"We feel confident that our newly established partnership with Green for Growth Fund is a good start for a long-term effective cooperation aimed at promotion of energy efficient lending throughout Armenia. Being a socially responsible organization, Inecobank views this project as a first step towards ensuring reduction of energy consumption not only among local enterprises but also in households via tailor-made banking services." said Avetis Baloyan, Chief Executive Officer of Inecobank CJSC.
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