MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) to Loan $6.9m to Elana Agrocredit of Bulgaria to Expand Land Lease Financing

The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral development bank, recently announced that it will extend a loan of EUR 5 million (USD 6.9 million) to Elana Agrocredit, a Bulgaria-based financial institution that provides lease financing to agricultural producers for farmland purchases. The loan, which will be used to expand the company’s land lease financing activity in the country, will be channeled through EBRD’s Local Enterprise Facility, a EUR 405 million (USD 559 million) investment vehicle that makes equity, quasi-equity and debt investments in small and medium-sized enterprises in the Balkans and the Southern and Eastern Mediterranean regions. The financial terms of the loan have not been disclosed.

According to Daniel Berg, EBRD country director for Bulgaria, the loan will help Elana Agrocredit “…play an essential role in strengthening an important sector of the country’s economy…[by] overcoming land fragmentation and giving farmers greater opportunities to own and develop their own land….”

Elana Agrocredit operates approximately 70 regional “agents” in Bulgaria through which it provides its services. The company is a subsidiary of Elana Group, a Bulgarian financial services holding company that provides commercial and investment banking services to retail and business clients through its network of subsidiaries. Financial data for the two companies are not available. In 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.

By A’kos Szebeni, Research Associate

About Elana Agrocredit

Elana Agrocredit is a registered financial institution based in Bulgaria that provides leasing services to agricultural producers for farmland purchases. The company is an operating subsidiary of Elana Group, a Bulgarian financial services holding company that provides commercial and investment banking services to retail and business clients through its subsidiaries. Elana Agrocredit operates approximately 70 regional “agents” in the country through which it provides its services. Financial data for the company are not available.

About Elana Group

Elana Group is a Bulgarian financial services holding company that provides commercial and investment banking services to retail and business clients through its network of subsidiaries including its brokerage and investment banking arm, Elana Trading; its asset management arm, Elana Fund Management; its project finance arm, Elana Investment; and Elana Holding, a holding company that in turn owns majority stakes in Elana Energy Management and Elana Agrocredit. Financial data for the company are not available.

About European Bank for Reconstruction and Development (EBRD)

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 it is owned by 61 countries as well as the European Investment Bank and the European Union as of 2012. It aims to finance operations that are both commercially viable and assist development in 34 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 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.

Sources and Additional Resources:

European Bank for Reconstruction and Development (EBRD), “Helping Bulgarian farmers to become landowners,” http://www.ebrd.com/pages/news/press/2014/140417c.shtml

MicroCapital, January 18, 2014, “European Bank for Reconstruction and Development (EBRD) to Loan $2m to FINCA Jordan for On-Lending to Micro-, Small Enterprises (MSEs),”
https://www.microcapital.org/european-bank-for-reconstruction-and-development-ebrd-to-loan-2m-to-finca-jordan-for-on-lending-to-micro-small-enterprises-mses/

MicroCapital, May 7, 2013, “European Bank for Reconstruction and Development (EBRD) Opens $112m in Credit Lines to Société Générale Expressbank, Sogelease Bulgaria for On-lending, Leasing to Small, Medium-Sized Enterprises,”
https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-opens-112m-in-credit-lines-to-societe-generale-expressbank-sogelease-bulgaria-for-on-lending-leasing-to-small-medium-siz/

MicroCapital, April 25, 2013, “ProCredit Bank Bulgaria Launches Home Loan Program,” https://www.microcapital.org/microcapital-brief-procredit-bank-bulgaria-launches-home-loan-program/

MicroCapital, January 24, 2012, “Mikrofond, Microfinance Centre, Citi Foundation Collaborate on Financial Education Project in Bulgaria,” https://www.microcapital.org/microcapital-brief-mikrofond-microfinance-centre-citi-foundation-collaborate-on-financial-education-project-in-bulgaria/

MicroCapital, April 8, 2011, “European Fund for Southeast Europe (EFSE) Loans $21m to Microfinance Institution (MFI) ProCredit Bank Bulgaria,” https://www.microcapital.org/microcapital-brief-european-fund-for-southeast-europe-efse-loans-21m-to-microfinance-institution-mfi-procredit-bank-bulgaria/

MicroCapital, March 8, 2011, “European Bank for Reconstruction and Development (EBRD) to Promote Energy Efficiency Through Memorandum of Understanding (MOU) with Government of Bulgaria, $9.7m Loan to Moldovan Bank BCR Chisinau,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-to-promote-energy-efficiency-through-memorandum-of-understanding-mou-with-government-of-bulgaria-9-7m-loan-to-moldovan-b/

MicroCapital Universe Profile: Elana Agrocredit, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Elana+Agrocredit

MicroCapital Universe Profile: Elana Group, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Elana+Group

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

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