MICROCAPITAL BRIEF: EBRD Loans $50m to QNB Alahli of Egypt to Boost Green Lending to Individuals, SMEs

Qatar National Bank (QNB) Alahli, an Egyptian member of the QNB Group, recently accepted a loan of USD 50 million from the multilateral European Bank for Reconstruction and Development (EBRD) to fund on-lending to individual borrowers as well as small and medium-sized enterprises (SMEs) performing “green, energy efficiency, water efficiency, renewable energy and resource efficiency projects.” The loan is part of the second Green Climate Fund (GCF) Green Economy Financing Facility designated for Egypt. It also includes concessional financing of USD 7.5 million from GCF, which was founded by 194 countries to mitigate the negative effects of climate change. The SME portion of the loan is targeted at “the residential, agribusiness, industrial, commercial and service sectors.” The EU is supporting the loan with technical assistance plus EUR 5.1 million (USD 6.1 million) for incentive payments to end-borrowers successfully completing their projects.

QNB Alahli serves 1.3 million retail and corporate customers through a network of 231 branches. As of December 2020, it reported total assets of EGP 290 billion (USD 18.5 billion), customer deposits of EGP 233 billion (USD 14.8 billion) and total loans of EGP 173 billion (USD 11 billion). For the year 2020, it generated return on average assets of 2.7 percent and return on average equity of 20 percent.

QNB Group is a Qatar-based entity with operations in 31 countries in Africa, Asia and Europe. Its members deliver financial services to approximately 20 million people via 1,000 locations. As of 2020, QNB Group reported total assets of QAR 1 trillion (USD 280 billion), customer deposits of QAR 738 billion (USD 203 billion), total loans of QAR 724 billion (USD 199 billion) and one-year return on equity of 15.4 percent.

Founded in 1991 and based in the UK, 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 microenterprise 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 Arin Atluri, Research Associate

Sources and Additional Resources

EBRD press release
https://www.ebrd.com/news/2021/ebrd-donors-and-qnb-alahli-boost-green-investments-in-egypt.html

QNB Alahli homepage
https://www.qnbalahli.com/

QNB Alahli 2020 financials
https://www.qnbalahli.com/sites/qnb/qnbegypt/document/en/enQ42020PressRelease

Green Climate Fund
https://www.greenclimate.fund/

GCF GEFF II
https://www.ebrd.com/work-with-us/projects/psd/52401.html

QNB Group profile
https://www.qnb.com/sites/qnb/qnbglobal/page/en/enqnbprofile.html

QNB Group 2020 annual report
https://www.qnb.com/sites/qnb/qnbegypt/page/en/enannualreport.html

EBRD homepage
https://www.ebrd.com/

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