MICROCAPITAL BRIEF: AccessBank Azerbaijan Receives $15m Loan from Green for Growth Fund for Financing Energy-Efficient Projects

AccessBank Azerbaijan, a microfinance bank (MFB) in Azerbaijan, has borrowed USD 15 million from the Green for Growth Fund, Southeast Europe (GGF), a European public-private partnership that focuses on improving energy efficiency and promoting renewable energy sources in Southeastern Europe, with the aim of increasing AccessBank’s financing of energy-efficient projects. AccessBank is planning to use the GGF loan for on-lending to micro-, small and medium-sized enterprises (MSMEs), which Kenan Agayev, the executive director of Accessbank for SME lending/corporate services, states the businesses will use for “equipment and machinery investment” to reduce carbon emissions. These investments are expected to lead to energy savings of approximately 43,500 megawatt hours of electricity and carbon dioxide emission reductions of 21,000 tons.

Christopher Knowles, chairman of GGF, expressed his support for the loan, stating, “AccessBank is clearly focused on this sector, this investment will quickly have an impact on the energy consumption of this country.”

As of 2014, AccessBank reports deposits of USD 279 million in 332,000 accounts, a gross loan portfolio of USD 664 million outstanding to 167,000 active borrowers and total assets of USD 834 million. AccessBank is associated with Germany’s Access Microfinance Holding, which also holds stakes in MFBs in Liberia, Madagascar, Nigeria, Tanzania and Tajikistan. As of December 31, 2013, GGF reported total assets of EUR 242 million (USD 326 million), a loan portfolio of EUR 170 million (USD 229 million) and a profit of EUR 430,000 (USD 579,000).

By Benjamin Krupp, Research Associate

About AccessBank Azerbaijan

AccessBank Azerbaijan was founded in 2002 to provide credit and financial services to Azerbaijan’s small businesses and low-income families. AccessBank is owned by the following six shareholders: the Black Sea Trade and Development Bank, a Greece-based financial institution (20% ownership); the European Bank for Reconstruction and Development, a London-based multilateral financial institution (20% ownership); the International Finance Corporation, the World Bank Group’s private-investment arm (20% ownership); Kreditanstalt für Wiederaufbau (KfW), a German development bank (20% ownership); Access Microfinance Holding, an investor in microfinance (16.5% ownership) and LFS Financial Systems, a German consulting company that manages Access Microfinance Holding (3.5% ownership). As of 2014, AccessBank reported to the US-based nonprofit Microfinance Information Exchange (MIX) deposits of USD 279 million in 332,000 accounts, a gross loan portfolio of USD 664 million outstanding to 167,000 active borrowers and total assets of USD 834 million. As of 2013, AccessBank reported return on assets of 3.8 percent and return on equity of 22.3 percent.

About Green for Growth Fund, Southeast Europe (GGF)

Luxembourg-based Green for Growth Fund, Southeast Europe (GGF) focuses on expanding the use of renewable energy sources and enhancing energy efficiency in Southeast Europe. GGF finances and refinances energy-efficiency initiatives and invests in small to medium-scale renewable energy projects. Furthermore, GGF offers technical support and funding to local financial institutions. GGF was established in 2009 by Germany’s Kreditanstalt für Wiederaufbau (KfW) and the Luxembourg-based European Investment Bank (EIB) with the financial support of the following organizations: EU’s European Commission, the German Federal Ministry for Economic Cooperation and Development (also known by its German acronym BMZ), and the European Bank for Reconstruction and Development (EBRD). As of 2014, GGF operates in 13 countries: Albania, Armenia, Azerbaijan, Bosnia and Herzegovina, Croatia, Former Yugoslav Republic of Macedonia, Georgia, Kosovo, Moldova, Montenegro, Serbia, Turkey and Ukraine. GGF reported total assets of EUR 242 million (USD 326 million), a loan portfolio of EUR 170 million (USD 229 million) and a profit of EUR 430,000 (USD 579,000) as of December 31, 2013.

About Access Microfinance Holding AG (AccessHolding)

Access Microfinance Holding AG (AccessHolding) is a commercial microfinance holding company that was established in 2006 in Germany by LFS Financial Systems GmbH (LFS). It invests in microfinance institutions (MFIs) and as of December 2012, Access owns a controlling share in six financial institutions. AccessHolding aims to develop its investments through equity finance, holding services, and management services rendered by LFS, which acts as its technical partner. AccessHolding establishes new MFIs together with external partners and transforms existing non-bank microlending institutions into microfinance banks that offer a wider range of services such as deposits. AccessHolding is a joint-stock company with committed capital of EUR 26.4 million (USD 37 million). As of December 2012, AccessHolding has investments in AccesBanque Madagascar (55.2-percent share); AccessBank Azerbaijan (16.5-percent share); AccessBank Tanzania (52.7-percent share); AB Microfinance Bank Nigeria Limited (50.1-percent share); AccessBank Liberia (55.6-percent share); and AccessBank Tajikistan (52-percent share). As of 2014, AccessHolding Group assets were reported at EUR 984 million (USD 1.33 billion).

Sources and Additional Resources

[1] Information provided to MicroCapital by AccessBank Azerbaijan, July 24, 2014

MicroCapital, July 14, 2014: Grameen Credit Agricole Microfinance Foundation (GCAMF) Loans $3m to Indonesia’s Mitra Bisnis Keluarga Ventura (MBK), $1m to Azerbaijan’s Finance for Development (FinDev)

MicroCapital, June 6, 2014: Absolute Portfolio Management’s Vision Microfinance Funds Loan $5m to Microfinance Institutions (MFIs) in Azerbaijan, El Salvador, Tajikistan

MicroCapital, May 21, 2014: Partner Microcredit Foundation (PMCF) of Bosnia and Herzegovina Borrows $5.5m from Green for Growth Fund (GGF) for Energy Efficiency Financing

MicroCapital Universe Profile: AccessBank Azerbaijan

MicroCapital Universe Profile: Green for Growth Fund, Southeast Europe (GGF)

MicroCapital Universe Profile: Access Microfinance Holding AG (AccessHolding)

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