MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD), European Union Commit $25m to Kyrgyz Sustainable Energy Financing Facility (KyrSEFF)

The UK-based European Bank for Reconstruction and Development (EBRD) recently launched the Kyrgyz Sustainable Energy Financing Facility (KyrSEFF), a USD 20 million credit line supporting energy efficiency projects for households and private enterprises in the Kyrgyz Republic. KyrSEFF loans will be provided to end-borrowers by commercial banks DemirBank, a Turkey-based bank, and Kyrgyz Investment and Credit Bank (KICB), which is minority-held by the Kyrgyz government, in amounts ranging from a few hundred US dollars to USD 1 million. As of 2011, the Kyrgyz arm of DemirBank reported total assets of KGS 6.3 billion (USD 131 million) and deposits of KGS 5.4 billion (USD 112 million). For the same year, KICB reported total assets of USD 169 million. Data on KICB deposits are not available. EBRD holds a 70-percent stake in Demirbank Kyrgyz.

The European Union (EU) Investment Facility for Central Asia (IFCA) will support KyrSEFF loans with partial grant funding and technical assistance of EUR 3.8 million (USD 5 million) over the next four years. Grant funding up to 35 percent of the loan amount will be available to make projects more affordable for homeowners, housing associations, energy service companies, developers and housing management companies. Eligible projects include the installation of insulation as well as energy efficient windows, boilers, biomass-fueled room heaters, solar water systems and heat pumps. For commercial borrowers, IFCA will provide technical assistance and up to 20 percent of the amount borrowed for purchases of new machinery for enhancing production processes or retrofitting company buildings and facilities.

Sustainable Energy Financing Facilities (SEFFs) have been created in 16 countries as a component of the Sustainable Energy Initiative, which was launched by ERBD in 2006 with the goal of addressing issues of energy efficiency and climate change by promoting sustainable energy investments.

By Jennifer Young, Research Associate

About European Bank for Reconstruction and Development
The European Bank for Reconstruction and Development (EBRD) is a multilateral 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, Central Asia and North Africa. 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). In 2011, EBRD disbursed a total of EUR 6.7 billion (USD 8.3 billion).

About DemirBank Kyrgyz
Founded in 1997, DemirBank is a Turkey-based commercial bank operating in Kazakhstan, Kyrgyz Republic and Romania. As of 2013, the UK-based European Bank for Reconstruction and Development (EBRD) holds 70-percent stake in DemirBank Kyrgyz, and the US-based International Finance Corporation (IFC) and private investor Dr. Halit Cingillioglu of Turkey each hold 15 percent of the bank’s stock. As of 2011, DemirBank Kyrgyz reported total assets of KGS 6.3 billion (USD 130.7 million) and deposits of KGS 5.4 billion (USD 112.3 million).

About Kyrgyz Investment and Credit Bank (KICB)
The Kyrgyz Investment and Credit Bank (KICB) was established in 2000 by institutions including Aga Khan Fund for Economic Development (AKFED), the European Bank for Reconstruction and Development (EBRD), International Financial Corporation (IFC), Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) and the Kyrgyz government. The bank specializes in providing medium- to long-term financing to private-sector businesses. As of 2011, KICB reported total assets of USD 168.9 million.

Sources and Additional Resources

[1] European Bank for Reconstruction and Development Story: “EBRD Launches a Credit Line for Energy Efficiency Projects in Kyrgyz Republic”
http://www.ebrd.com/pages/news/press/2013/130425b.shtml

[2] Kyrgyz Sustainable Energy Financing Facilities (KyrSEFF) Website: http://www.kyrseff.kg

[3] Hurriyet Daily News Story: “Demirbank Sets Up Bank in Kyrgyzstan”
http://www.hurriyetdailynews.com/demirbank-sets-up-bank-in-kyrgyzstan.aspx?pageID=438&n=demirbank-sets-up-bank-in-kyrgyzstan-1997-04-26

[4] The Business History Conference Report: “Demirbank: The History of a Small Commercial Turkish  Bank”
http://www.thebhc.org/publications/BEHprint/v028n1/p0125-p0132.pdf

MicroCapital Story: “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Launches $100m Credit Line for Russian Residential Energy Efficiency Improvements, Center-Invest Bank Borrows $24m,” May 2, 2013.
https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-launches-100m-credit-line-for-russian-residential-energy-efficiency-improvements-center-invest-bank-borrows-24m/

MicroCapital Story: “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development Loans $197m to Turkey’s Isbank to Support Small, Medium-sized Enterprises, $350m to Turkish Banks for Energy Efficiency,” April 17, 2013.
https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-loans-197m-to-turkeys-isbank-to-support-small-medium-sized-enterprises-350m-to-turkish-banks-for-energy-efficiency/

MicroCapital Story: “MICROCAPITAL BRIEF: EBRD Plans $200m to Expand Turkish Sustainable Energy Finance Facility (TurSEFF) for Small and Medium-sized Enterprises, Private Households”, March 8, 2013.
https://www.microcapital.org/microcapital-brief-ebrd-plans-200m-to-expand-turkish-sustainable-energy-finance-facility-turseff-for-small-and-medium-sized-enterprises-private-households/

MicroCapital Story: “MICROCAPITAL BRIEF: Minsk Transit Bank, Belgazprombank of Belarus Access $50m Facility for SME Energy Efficiency from European Bank for Reconstruction and Development,” February 25, 2013.
https://www.microcapital.org/microcapital-brief-minsk-transit-bank-belgazprombank-of-belarus-access-50m-facility-for-sme-energy-efficiency-from-european-bank-for-reconstruction-and-development-erbd/

MicroCapital Story: “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Lends $70m to Garanti Bank of Turkey, Hipotekarna Banka of Montenegro, Bai Tushum of Kyrgyz Republic,” November 14, 2012.
https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-lends-70m-to-garanti-bank-of-turkey-hipotekarna-banka-of-montenegro-bai-tushum-of-kyrgyz-republic-2/

MicroCapital Story: “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),” February 1, 2011.
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 Universe Profile: European Bank for Reconstruction and Development (EBRD)
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29

MicroCapital Universe Profile: KICB
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Kyrgyz+Investment+and+Credit+Bank+(KICB)

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