European Bank for Reconstruction and Development (EBRD) Council of ministers will review the allocation of $7.5m to the Azerbaijani commercial bank Unibank. This will be the second syndicated credit designed to support small and medium business allocated to the Azerbaijani bank, Trend reports, citing the official EBDR press-release.
The project is a syndicated loan structured in two portions. EBRD will finance an A-portion (up to 3 years maturity) of the loan for up to USD 2.5 million, while a B-portion (1 year maturity extendable for another year on the consent of B-lenders) of the loan of up to USD 5.0 million is expected to be financed by the participating banks.
The project will provide Unibank with access to international markets to raise medium term financing for on-lending to local private enterprises
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The project will play a significant role in mobilization of new sources of funds by bringing foreign capital and new international financiers to the Azerbaijani financial sector. It is also expected that the project will have an impact on strengthening private sector companies' (primarily SMEs) development in Azerbaijan by promoting financial intermediation.
Agreement for the first syndicated loan of $5m with the three year term from EBRD to Unibank was signed on April 8, 2005. EBRD has provided $1.5m of this sum. Austrian Creditanstalt and Anglo-Romanian Bank have also participated in the syndication, they have provided $3.5m.