MICROCAPITAL BRIEF: EBRD Commits Up to $45m to Uzpromstroybank of Uzbekistan for Expansion, Including Green Financing for SMEs

Via its Green Economy Financing Facility (GEFF), the UK-based European Bank for Reconstruction and Development (EBRD) recently committed up to USD 25 million to Uzbekistan-based Uzpromstroybank. Founded in 2019, GEFF delivers funds to 145 financial institutions to on-lend to small and medium-sized enterprises (SMEs) for “green” investments in Eastern Europe, West Asia and the Middle East. Uzpromstroybank recently joined the facility, through which it will access funds for green technologies for SMEs, such as energy-efficient manufacturing systems. The funding from GEFF includes consulting services to help Uzpromstroybank’s end-borrowers transition to these new technologies.

Separately, EBRD has committed up to USD 20 million as a risk-sharing facility to bolster Uzpromstroybank’s lending capacity and commercialization. This facility is supported by two government-backed entities, the Austrian Federal Ministry of Finance and the Taiwan International Cooperation and Development Fund.

Founded in 1922, Uzpromstroybank operates a network of 45 full branches as well as 170 service outlets in rural areas. The bank’s main shareholders are the Ministry of Finance of the Republic of Uzbekistan and the country’s sovereign wealth facility, the Fund for Reconstruction and Development of the Republic of Uzbekistan, which invests in projects such as providing emergency housing following natural disasters. In January 2021, the bank reported total assets of UZS 49 trillion (USD 4.6 billion), a loan portfolio of UZS 39.9 trillion (USD 3.76 billion) and total deposits of UZS 11.3 trillion (USD 1.06 billion).

As of 2021, GEFF has invested EUR 4.6 billion (USD 5.6 billion) in projects to mitigate climate change as part of EBRD’s commitment to becoming a “majority green bank” by 2025. GEFF operates in 27 countries, providing loans to approximately 190,000 customers, reducing annual emissions of carbon dioxide by 8.6 million tons.

Founded in 1991, EBRD seeks to support a “transition to open, market economies, whilst fostering sustainable and inclusive growth” in 38 countries in Central Asia, Eastern Europe and North Africa. It does this by providing business advice, supporting trade finance, and investing debt and equity in funders of microenterprises and SMEs. With a focus on “the promotion of private and entrepreneurial initiative,” the bank disbursed approximately EUR 11 billion (USD 13.3 billion) to 411 projects during 2020. EBRD’s shareholders comprise 69 countries plus the EU.

By Sophie Fiala, Research Associate

Sources and Additional Resources

EBRD press release
https://www.ebrd.com/news/2021/ebrd-provides-us-45-million-to-major-lender-in-uzbekistan.html

EBRD project summary
https://www.ebrd.com/work-with-us/projects/psd/51959.html

Uzpromstroybank homepage
https://sqb.uz/

GEFF homepage
https://ebrdgeff.com/

Austrian Federal Ministry of Finance homepage
https://www.bmf.gv.at/

Taiwan International Cooperation and Development Fund homepage
https://www.icdf.org.tw/

Previous MicroCapital article on EBRD
https://www.microcapital.org/microcapital-brief-ebrd-lends-1-2m-to-erste-groups-sparkasse-leasing-doo-skopje-to-support-small-medium-sized-enterprises-smes-in-north-macedonia/

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