MICROCAPITAL BRIEF: Green for Growth Fund, Southeast Europe (GGF) Loans $2m to ACBA Leasing of Armenia to Boost Energy Efficiency for SMEs, Large Companies

The Green for Growth Fund, Southeast Europe (GGF), a Germany-based fund that invests in energy efficiency (EE) and renewable energy sources, recently disbursed a senior loan of USD 2 million to Agricultural Cooperative Bank of Armenia Leasing (ACBA Leasing). ACBA-Credit Agricole Bank (ACBA), a regulated bank in Armenia that is part of the French Credit Agricole group, holds a majority equity stake in ACBA Leasing. The loan is intended to support EE projects in the country that will “yield primary energy savings and emission reductions of 2,250 megawatt-hours and 370 tons of carbon dioxide per annum”[1].

Mr Christopher Knowles, the chairman of GGF, said that “ACBA Leasing has consistently proved a strong partner to the GGF in reaching out to a large customer base that seeks alternative financing for EE measures. In addition, the GGF Technical Assistance Facility further supports ACBA Leasing’s commitment to EE finance by providing valuable assistance with energy audits as well as marketing and awareness-raising campaigns”[1]. Mr Arsen Bazikyan, the general manager of ACBA Leasing, added that “the GGF loan will be used to finance energy efficient equipment required by ACBA Leasing’s clients, i.e. small and medium entrepreneurs as well as larger clients, to enhance the EE sector in Armenia. ACBA Leasing has identified potential levers for EE lending business in financing […], thermal solar systems and power efficient ventilators”[1].

As of September 2014, ACBA Leasing reported total assets of AMD 14 billion (USD 29.4 million) and a net leasing portfolio of AMD 9.2 billion (USD 19.3 million). Movable property leasing contracts offered by ACBA Leasing can last up to 60 months with annual interest rates ranging from 11 percent to 17 percent. GGF reported total assets of EUR 242 million (USD 326 million), a loan portfolio of EUR 170 million (USD 229 million) and profits EUR 430,000 (USD 579,000) as of December 31, 2013.

By Alíz Crowley, Research Associate

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 southeastern Europe. It does this by financing and refinancing energy-efficiency initiatives and investing 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 profits EUR 430,000 (USD 579,000) as of December 31, 2013.

About ACBA Leasing

Established in 2003, Agricultural Cooperative Bank of Armenia (ACBA) Leasing is a subsidiary of ACBA, a regulated bank in Armenia. ACBA Leasing finances the acquisition of assets such as equipment for engineering, agriculture, medical procedures, transportation and service businesses. Movable property leasing contracts can last up to 60 months with annual interest rates ranging from 11 percent to 17 percent. As of September, 2014, ACBA Leasing reported total equity of AMD 3 billion (USD 6.3 million) and total assets of AMD 14 billion (USD 29.4 million). The net leasing portfolio of ACBA Leasing totaled AMD 9.2 billion (USD 19.3 million) as of September 2014.

About ACBA Credit Agricole Bank (ACBA)

ACBA Credit Agricole Bank (ADBA) (formerly known as Agricultural Cooperative Bank of Armenia) was founded by the Agricultural Cooperative Regional Unions of the three Armenian provinces of Shirak, Armavir and Ararat and obtained a full banking license on March 29, 1996. ACBA was initially created to finance small and medium-sized agricultural enterprises and individual farmers. In the next few years the bank began to finance non-agricultural activities. In 2006, Credit Agricole SA France made an investment in ACBA and the bank was reorganized into ACBA Credit Agricole Bank closed joint stock company. As of December 31, 2013, ACBA reported total assets of AMD 267.7 billion (USD 656.4 million), total deposits of AMD 107.8 billion (USD 264.5 million) and a gross loan portfolio of AMD 172.6 billion (USD 423.2 million).

Sources and Additional Resources

[1] GGF, Press Release, GGF and ACBA Leasing Partner to Promote Investment in Energy Efficiency in Armenia

MicroCapital, December 30, 2014, European Fund for Southeast Europe (EFSE), Green for Growth Fund (GGF) Loan $24.2m to Macedonia-based Halkbank AD Skopje to Support Energy Efficiency; Housing; Micro-, Small Enterprises (MSEs)

MicroCapital, December 19, 2014, European Fund for Southeast Europe (EFSE) Loans $4.2m to Agricultural Cooperative Bank of Armenia (ACBA) Leasing for On-lending to Micro-, Small Enterprises

MicroCapital, November 8, 2014, Green for Growth Fund, Southeast Europe (GGF) Lends $5m to Muganbank of Azerbaijan for On-Lending to Micro-, Small and Medium-Sized Enterprises (MSMEs) for Energy Efficiency Projects

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

MicroCapital Universe Profile: ACBA Leasing

MicroCapital Universe Profile: ACBA Credit Agricole Bank (ACBA)

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