MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Loans Kyrgyz Investment and Credit Bank (KICB) $5m; Demir Kyrgyz International Bank (DKIB) $4m for On-lending to Fund Energy Efficiency Improvement Projects

The European Bank for Reconstruction and Development (EBRD), a multilateral institution headquartered in London, has approved the disbursement of a loan of USD 5 million to Kyrgyz Investment and Credit Bank (KICB), a commercial bank in Kyrgyzstan. EBRD also approved a loan of USD 4 million to be disbursed to Demir Kyrgyz International Bank (DKIB), a commercial bank headquartered in Kyrgyzstan. Both loans are to be used for on-lending to local companies and households to finance “energy efficiency improvements”[1] including modernization of energy-related equipment, insulation and small-scale renewable energy projects.

Both loans will be made under EBRD’s “Kyrgyz Sustainable Energy Financing Facility” (KyrSEFF), a framework backed by the European Union’s Investment Facility for Central Asia. KyrSEFF offers credit lines and technical assistance to support the energy financing operations of banks in Central Asia.

Mr Kwang Young Choi, CEO of KICB, stated that “this is the second credit facility under the KyrSEFF programme, which demonstrates our commitment to promote energy efficiency initiatives in the Kyrgyz Republic”[1]. Mr Sevki Sarilar, the General Manager of DKIB, said that “KyrSEFF is one of our most important products, which we implemented in Kyrgyzstan with the support of our good partner and shareholder, the EBRD. KyrSEFF brings benefits not only for companies but also for individuals and households and of course the economy as a whole”[1].

KICB specializes in providing “medium- to long-term financing” to private-sector businesses. As of December 31, 2011, KICB reported total assets of USD 168.8 million and total loans to customers of USD 88.2 million. More recent financial details on KICB are available in Russian at the KICB website. DKIB reported total assets of KGS 11.0 billion (USD 213.3 million) and net loans to customers of KGS 5.1 billion (USD 99.0 million) as of March 31, 2014. EBRD holds equity stakes of 17 percent in KICB and 15 percent in DKIB as of 2014.

EBRD provides loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs) in Eastern Europe, Central Asia and North Africa. In 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.

By Alíz Crowley, Research Associate

About Kyrgyz Investment and Credit Bank (KICB)

Kyrgyz Investment and Credit Bank (KICB) is a commercial bank in Kyrgyzstan that was established in 2000. KICB’s shareholders include Switzerland-based nonprofit Aga Khan Fund for Economic Development (21 percent), Pakistani commercial bank Habib Bank Limited (18 percent), the UK-based financial institution European Bank for Reconstruction and Development (17 percent), the US-based World Bank Group’s private investment arm International Financial Corporation (17 percent), German development finance institution Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) (17 percent) and the Kyrgyz Government (10 percent). KICB specializes in providing “medium to long-term financing” to private sector businesses. As of December 31, 2011, KICB reported total assets of USD 168.8 million and total loans to customers of USD 88.2 million. More recent financial details on KICB are available in Russian at the KICB website.

About Demir Kyrgyz International Bank (DKIB)

Demir Kyrgyz International Bank (DKIB) was founded in 1997 in Bishkek, the capital city of Kyrgyzstan. The bank offers retail and corporate banking services. The shareholders of DKIB are Dr Halit Cingillioglu, a Turkish businessman (70 percent); the UK-based financial institution European Bank for Reconstruction and Development (15 percent); and the US-based World Bank Group’s private-investment arm, the International Financial Corporation (15 percent). DKIB reported total assets of KGS 11.0 billion (USD 213.3 million) and net loans to customers of KGS 5.1 billion (USD 99.0 million) as of March 31, 2014.

About European Bank for Reconstruction and Development (EBRD)

The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London, England. The bank began operations in 1991 upon the agreement of 40 countries, and it is owned by 64 countries as well as the European Investment Bank and the European Union as of 2014. It aims to finance operations that are both commercially viable and assist development 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 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.

Sources and Additional Resources

[1] EBRD, July 2014, EBRD Lends KICB US$ 5m for Energy Efficiency Projects in Kyrgyz Republic

[2] EBRD, July 2014, EBRD Lends Demir Kyrgyz International Bank US$ 4m for Energy Efficiency Projects

[3] Kyrgyz Investment and Credit Bank Website, About us

[4] Demir Kyrgyz International Bank, About our bank

MicroCapital, July 3, 2014, European Bank for Reconstruction and Development (EBRD), International Cooperation and Development Fund of Taiwan (TaiwanICDF) Loan Tunisie Leasing $14m to Fund Micro-, Small, Medium-sized Enterprises (MSEs) in Tunisia

MicroCapital, July 2, 2014, European Bank for Reconstruction and Development (EBRD) Likely to Loan Mongolian XacBank $5m for On-lending to Micro?, Small, Medium-Sized Enterprises (MSMEs); $10m for Sustainable Energy

MicroCapital, June 4, 2014, European Bank for Reconstruction and Development (EBRD) Likely to Loan Azeri DemirBank $50m for On-lending to Micro-, Small, Medium-Sized Enterprises (MSMEs); $5m to Promote Residential, Business Energy Efficiency

MicroCapital Universe Profile: Kyrgyz Investment and Credit Bank

MicroCapital Universe Profile: Demir Kyrgyz International Bank

MicroCapital Universe Profile: European Bank for Reconstruction and Development (EBRD)

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

Similar Posts: