In its effort to boost energy efficiency in Eastern Europe, the European Bank for Reconstruction and Development (EBRD), a development finance institution headquartered in London, recently signed a memorandum of understanding (MOU) with the government of Bulgaria and loaned EUR 7 million (USD 9.7 million) to BCR Chisinau, a Moldovan commercial bank.
Approximately EUR 200 million (USD 277 million) has been set aside by the government of Bulgaria for sustainable energy initiatives under its program titled “Development of the Competitiveness of the Bulgarian Economy 2007-2013” [1]. By signing the MOU with the government of Bulgaria, EBRD aims to support the design and implementation of government’s program that will provide grants, loans and technical assistance to small and medium-sized enterprises (SMEs) that aim to improve their equipment to achieve energy efficiencies and positive environmental impact.
EBRD’s loan to BCR Chisinau is part of a EUR 20 million (USD 27.7 million) Moldova Sustainable Energy Financing Facility (MoSEFF) that will enable BCR Chisinau to provide loans worth up to EUR 2 million (USD 2.7 million) to private Moldovan companies to undertake energy efficient investments such as the replacement of old production and heating equipment, thermal insulation and solar energy projects. Sorin Andrei, the executive president of BCR Chisinau said, “We are pleased to partner with the EBRD and to support small and medium companies in Moldova with providing the financing for their energy efficiency upgrades. Such investments will help businesses cut their costs and become more environmentally friendly”. It has been reported that the sub-borrowers (companies undertaking energy efficient investments), will benefit from incentives offered by the European Union of up to 10-20 percent of the loan amount on completion of their projects, dependent on the technology used and energy savings achieved [2].
As of 2011, EBRD has committed approximately EUR 2.4 billion (USD 3.3 billion) in Bulgaria and EUR 460 million (USD 638 million) in Moldova across various development projects [1], [2].
As of 2010, BCR Chisinau reported share capital of MDL 562 million (USD 45.9 million), a network of 5 branches and approximately 12,000 customers.
By Medha Ravi, Research Associate
About the European Bank for Reconstruction and Development:
The European Bank for Reconstruction and Development (EBRD) is a development finance institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are both commercially viable and assist development in 29 countries in Eastern Europe and Central Asia. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). Operating assets for fiscal 2009 were EUR 6.1 billion (USD 8 billion).
About BCR Chisinau:
Established in 1998 in Moldova, BCR Chisinau began its operations as a commercial bank with a registered capital of MDL 24 million (USD 1.96 million). The sole shareholder of BCR Chisinau SA is BCR, member of Erste Financial Group, Austria. As of 2010, BCR Chisinau reported share capital of MDL 562 million (USD 45.9 million), a network of 5 branches and approximately 12,000 customers.
Source and Resources:
[1] European Bank for Reconstruction and Development (EBRD) press release, “EBRD and Bulgaria team up to boost energy efficiency”, http://www.ebrd.com/pages/news/press/2011/110302.shtml
[2] European Bank for Reconstruction and Development (EBRD) press release, “New EBRD financing for energy efficiency investments in Moldova”, http://www.ebrd.com/pages/news/press/2011/110222.shtml
MicroCapital.org story, March 1, 2011, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD), Crédit Agricole Serbia Accept Warehouse Receipts as Collateral for $27m in Loans to Agribusinesses https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-credit-agricole-serbia-accept-warehouse-receipts-as-collateral-for-27m-loans-to-agribusinesses/
MicroCapital.org story, February 1, 2011, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Loans $3m to Mol Bulak Finance of the Kyrgyz Republic for On-Lending to Small and Medium Enterprises (SMEs)”, https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-loans-3m-to-mol-bulak-finance-of-the-kyrgyz-republic-for-on-lending-to-small-and-medium-enterprises-smes/
MicroCapital’s Microfinance Universe Profile: European Bank for Reconstruction and Development (EBRD), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29
MicroCapital’s Microfinance Universe Profile: BCR Chisinau, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=BCR+Chisinau
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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