Monday, July 14 2014 18:19
EBRD and HSBC Bank Armenia sign an agreement for a US$ 10 million loan to be directed to industrial and residential renewable energy sectors
ArmInfo. HSBC clients in Armenia can now benefit from funding for green energy projects. On 4 July 2014 an agreement was signed between the European Bank for Reconstruction and Development (EBRD) and HSBC Bank Armenia CJSC for a US$ 10 million loan to be directed to the industrial and residential renewable energy sectors. The EBRD reports that the funds will allow HSBC Armenia to support its borrowing clients in their energy efficiency and renewable energy investments.
These funds will be lent to companies willing to make capital investments in their equipment, machinery and other fixed assets aimed at achieving overall energy efficiency and reductions of over 20 per cent in their energy consumption. The maximum tenor of the loans is five years. This facility falls under the EBRD's Caucasus Energy Efficiency Programme (CEEP), which has been developed to encourage firms to make better use of their country's energy resources.
This initiative aims to help Armenia reduce the energy intensity of its economy and promote energy efficiency investments in various sectors, such as power and energy, industry, agriculture, municipal and environmental infrastructure, property and the residential sector.
CEEP is complemented by grants including ?4.6 million for technical assistance provided by the Austrian Ministry of Finance, EUR4.7 million from the European Union Neighborhood Investment Facility and EUR1.2 million from the EBRD Shareholder Special Fund (SSF). Eligible projects under CEEP may receive investment incentives of up to 15 per cent of the eligible loan amount.
The deal highlights the growing partnership between the EBRD and HSBC in identifying business opportunities and deepening relationships with established, high-performing clients.
According to the Financial Rating of Armenian banks prepared by the Agency of Rating Marketing Information (ArmInfo), in Q1 2014 HSBC Bank Armenia's loan book totaled $415 mln, including $333 mln lending to economy. Over the past few years the Bank has held leading positions among the TOP-5 banks in Armenia. HSBC Bank Armenia took the lead in construction lending (over 10% of its loan book). About 27% of the loan book fell on the industrial sector and about 27% - on the SME lending (2nd and 5th positions, respectively). The Bank lent over 24% of its loan book to trade finance (3rd position in absolute terms). The share of lending in the Bank's assets is 68%. In Q1 2014 HSBC Bank Armenia increased its net profit by 17% to $4.6 mln (1st position).
The EBRD has been one of the largest investors in Armenia since the country's independence. The Bank has invested over EUR688 million in 129 projects in the country's financial, corporate, energy and infrastructure sectors.
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