10:47, 4 October 2023
YEREVAN, OCTOBER 4, ARMENPRESS. The European Investment Bank (EIB), the lending arm of the European Union, will provide a loan of €70 million to the Central Bank of Armenia to increase access to financing for small and medium-sized enterprises (SMEs) and mid-caps in Armenia, the Central Bank said in a press release.
This initiative is part of the EIB’s Armenian Economic Resilience Programme, with backing from the European Fund for Sustainable Development Plus (EFSD+). The programme is designed to facilitate access to financing for businesses in Armenia, contributing to economic growth and resilience.
The funds, channelled through the Central Bank of Armenia, will be directed to eligible companies via commercial banks and universal credit organisations, ensuring a streamlined approach to financing. Like its predecessors, the Programme, will be implemented by the German-Armenian Fund, and will support an estimated 1 200 enterprises and sustain 1 500 jobs. Eight partner financial institutions are already confirmed to take part in the Programme.
This strategic partnership underscores the European Union's commitment to promoting economic growth, resilience and sustainable development in Armenia, fostering a brighter future for its SMEs and mid-caps. It also emphasises the support for a sustainable, innovative and competitive economy, as one of the five main pillars for Armenia under the European Union’s Economic and Investment Plan for the Eastern Partnership.
The loan is complemented by technical assistance financed by the Eastern Partnership Technical Assistance Trust Fund (EPTATF). The EIB’s advisory services will help businesses implement green projects, further social inclusion and pursue digitalisation.
Head of the EU Delegation to Armenia Ambassador Vasillis Maragos added, “This loan reaffirms the EU's commitment to Armenia's resilient economic growth. It is an initiative that decisively contributes to the EU's Economic and Investment Plan target of mobilising €500 million in investments for Armenia's private sector and supporting 30 000 SMEs. Let us remember, though, that this initiative is much more than mere numbers. It is about real impact. We are prioritising balanced regional growth, empowering women entrepreneurs and promoting green projects, all in line with EU values and a steadfast commitment to supporting Armenia as it builds a sustainable, innovative and competitive economy – and most importantly, we stand with Armenia in difficult times.”
The Deputy Prime-Minister of the Republic of Armenia Mher Grigoryan, said: “The development of small and medium-sized enterprises has a critical role for inclusive and sustainable economic development, boosting innovation, improving economic resilience as well as structure of the economy. Taking into account the current complicated developments in the region, it is especially critical today to do the utmost to provide with all necessary prerequisites for sustainable and continuous development of the private sector. The Program designed with joint efforts serves the goal to support the Armenian small and medium-sized enterprises to have easy access to local currency financing.”
EIB Vice-President Teresa Czerwińska, responsible for operations in Armenia, remarked, “Today, amid a challenging period for the country, with the support from the European Union, we are extending further financing to the Central Bank of Armenia, a well-established partner of the EIB. This fourth EIB loan will boost economic resilience through the smooth flow of funds to small businesses, with a particular focus on women entrepreneurs and green projects in line with the EU Economic and Investment Plan for the Eastern Partnership for Armenia. Supporting underserved SMEs, it will contribute to an inclusive and sustainable Armenian economy.”
Martin Galstyan, Governor of the Central Bank of Armenia, explained, “Financial cooperation between the EIB and CBA started in 2014, and has been very successful. It has greatly enhanced the development of Armenia’s private sector through financial institutions and, due to the programme requirements, has dramatically improved SMEs and brought international best standards to financial institutions and the private sector as a whole. Within the scope of the cooperation many important and impactful projects have been financed. With the new loan facility of €70 million, ambitious targets have been set to support SMEs and mid-caps as they invest in green projects, empower women and promote digitalisation.”
With this loan, the EIB and CBA are continuing their cooperation, building on three previous successfully intermediated loans totalling €150 million. This model has allowed many smaller financial institutions to participate in the programme and channel EIB funding to SMEs, improving these companies’ access to long-term finance in local currency on favourable terms. The previous EIB loans provided to the Central Bank of Armenia supported more than 1 300 enterprises, and created 2 000 jobs in the third phase alone, particularly in the agri-processing and tourism sectors.
Background information
About the Economic and Investment Plan for the Eastern Partnership
In 2021, the European Union launched the Economic and Investment Plan for the Eastern Partnership countries — aimed at supporting, among others, the development of resilient, sustainable and integrated economies in the region.
The plan contains a set of flagship initiatives for each of the partner countries. These are concrete priority projects with tangible results, identified jointly with the partner countries and taking into account their priorities, needs and ambitions.
The Armenian Economic Resilience Programme supports a sustainable, innovative and competitive economy as one of the five flagship initiatives for Armenia under the European Union’s Economic and Investment Plan for the Eastern Partnership.