- EIB provides EUR 50m to the Central Bank of Armenia (CBA) to support access to finance for SMEs and mid-caps
- Approximately 25 enterprises will benefit from this loan and 2 060 jobs are expected to be sustained
- This is the EIB’s third operation with CBA and brings the EIB’s co-financing intermediated through this financial institution to EUR 150m
The European Investment Bank (EIB) is lending EUR 50m to the Central Bank of Armenia to finance projects implemented by small and medium-sized enterprises (SMEs) and mid-caps in this country, particularly in the areas of agri-food processing and tourism. The loan is being provided in the context of the EU4Business initiative targeted at smaller businesses in the Eastern Partnership countries.
The Central Bank of Armenia will channel the EIB funds to beneficiaries (mainly SMEs) through a range of eligible financial intermediaries, like local banks and funds. This loan will target the agri-processing and rural sectors, in particular. Approximately 25 enterprises will benefit from this loan and 2 060 jobs are expected to be sustained. These areas play a strategic role in terms of the development of Armenia, where some 95% of communities are rural and agriculture accounts for approximately three quarters of total employment in rural areas of the country.
EIB Vice-President Vazil Hudák commented: “We are further developing our cooperation with the Central Bank of Armenia, our well-established financing partner institution, for the benefit of smaller businesses that create some 40% of job opportunities and contribute the same share to the generation of GDP in Armenia. This is important for strengthening the middle class, so contributing to the political stability and diversification of Armenia’s economy.”
Chairman of the Central Bank of Armenia Arthur Javadyan commented: “The European Investment Bank is a long-standing, reliable partner for SME-targeted financing programmes in Armenia. EIB-financed programmes play an important role to increase the availability and affordability of financing for SMEs and mid-caps. They also support the green financing culture among Armenian financial institutions.”
This operation is a continuation of the successful cooperation of the EU bank with CBA. Two previous EIB loans signed in 2014 and 2016 have been fully disbursed and allocated to projects promoted by Armenian SMEs and mid-caps, improving access to long-term finance provided on favourable terms.
The EIB finances projects in Armenia on the basis of the EU External Lending Mandate. This provides the EIB with a guarantee covered by the EU budget for projects of significant interest to the EU and its Eastern Neighbours in the areas of social and economic infrastructure, local private sector development and climate action.
EU4Business is an EU initiative that helps SMEs in the six countries of the Eastern Partnership (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) to finance their development and boost economic growth. EU4Business support is delivered by the EIB together with other organisations outside the EU. EU4Business is used to provide technical assistance to improve the way the banking sector functions, and advice to local banks in EaP countries to better address SME clients. In addition, special facilities have been set up to encourage women entrepreneurs and promote SME investments in renewable energy, energy efficiency and the agriculture sector.
In Armenia, EU4Business is supporting 12 ongoing projects to the tune of over EUR 30m in total. These projects provide improved access to finance and new markets, training, coaching and advisory services for small and medium-sized enterprises (SMEs) and innovative start-ups, technology-based enterprise and cluster development, targeted support for women in business, regional development, social entrepreneurship and improvement of the business environment.