MICROCAPITAL BRIEF: EBRD Loans $5.9m in Local Currency to Erste Bank ad Novi Sad to Support Household Energy Efficiency in Serbia

The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral institution, recently loaned RSD 600 million (USD 5.9 million) to Erste Bank ad Nova Sad (Erste Bank Serbia), a commercial banking subsidiary of the Austria-based Erste Group. Erste Bank ad Nova Sad is to distribute the proceeds to Serbian homeowners and housing associations to finance projects that improve the energy efficiency of homes. For example, borrowers may install solar panels or upgrade heating equipment, insulation, windows, doors or lighting.

The EBRD loan is the first disbursal from its Green Economy Financing Facility for the Western Balkans, through which it plans to disburse EUR 50 million (USD 58 million) to lenders in Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro, and Serbia.

Founded in 1864 under the name Novosadska Banka, Erste Bank ad Nova Sad is a commercial bank that provides deposit, lending, insurance, payment-card and electronic banking services via 46 branches. In 2005, the bank was acquired by the Austria-based Erste Bank Group and rebranded under its current name. As of December 2017, it reports total assets of RSD 162 billion (USD 1.6 billion), customer deposits of RSD 92 billion (USD 928 million), and loans and other receivables from customers of RSD 104 billion (USD 1.1 billion).

Founded in Austria in 1819, Erste Group has been publicly traded since 1997. It serves approximately 16.1 million customers via 2,577 branches operated by entities in Austria, Croatia, the Czech Republic, Hungary, Moldova, Montenegro, Romania, Serbia and Slovakia. As of December 2017, Erste Group reports total assets of EUR 221 billion (USD 264 billion), customer deposits of EUR 151 billion (USD 181 billion), and loans and other receivables from customers of EUR 140 billion (USD 167 billion). For the year ending 2017, it reported return on equity of 10.2 percent.

EBRD was founded in 1991 and has 66 shareholding countries – plus the EU and the European Investment Bank – as of 2018. During 2017, with a focus on “the promotion of private and entrepreneurial initiative,” it invested EUR 9.7 billion (USD 11.2 billion) in companies in 36 countries in Eastern Europe, Central Asia, North Africa and the Middle East. As of 2018, EBRD has invested EUR 4.7 billion (USD 5.4 billion) in 200 projects in Serbia.

By Nicholas Galimberti, Research Associate

Sources and Additional Resources

EBRD press release
https://www.ebrd.com/news/2018/ebrd-partners-with-erste-bank-serbia-to-finance-energysaving-home-improvements-.html

Green Economy Financing Facility for the Western Balkans background
https://ebrdgeff.com/ba/the-programme/the-facility/

Erste Bank Serbia background
https://www.erstebank.rs/en/about-us/about-erste-bank-ad-novi-sad

Erste Bank Serbia financials
https://www.erstebank.rs/en/about-us/financial-statements

Erste Group annual report
http://www.erste-bank.at/20180525_GB17_Online/EN/iframes.html

MicroCapital Brief; December 15, 2009; MICROCAPITAL BRIEF: Erste Bank Group of Austria Launches Microfinance Fund
https://www.microcapital.org/microcapital-brief-erste-bank-group-of-austria-launches-microfinance-fund/

MicroCapital Brief; May 29, 2009; MICROCAPITAL BRIEF: EBRD Loans $59m in Local Currency to ProCredit Bank of Bulgaria for On-lending to SMEs
https://www.microcapital.org/microcapital-brief-ebrd-loans-59m-in-local-currency-to-procredit-bank-of-bulgaria-for-on-lending-to-smes/

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