EBRD lends US$ 10 million to Araratbank to boost competitiveness and green investments
By Nina Tsintsadze
Armenia’s private sector is set to benefit from fresh funds for green initiatives, thanks to a US$ 10 million (€9.5 million) financial package to Araratbank from the European Bank for Reconstruction and Development (EBRD). The funding is in partnership with the European Union (EU), the Green Climate Fund (GCF) and Climate Initiative Funds (CIF).
Araratbank will on-lend the funds to micro, small and medium-sized businesses (MSMEs) with a view to promoting the private sector’s shift towards competitive, low-carbon and climate-resilient practices.
Of the total financing, US$ 5 million will be allocated through the EU4Business-EBRD Credit Line – a joint programme designed to help MSMEs upgrade their technology and services to meet EU standards. Under the EU4Business initiative, borrowers will have access to EU-funded grants and complementary international advisory services. This support enables firms to boost their competitiveness both locally and globally, while adopting robust health and safety standards and environmentally friendly practices. At least 70 per cent of the funding is earmarked for green technology, and 30 per cent is dedicated to on-lending to women-led businesses, promoting greater economic inclusion and female entrepreneurship.
The EBRD is also using the funding to address the needs of Armenians displaced between 2020 and 2023. To support their sustainable integration into the economy and broader community, the EBRD will provide incentive grants to entrepreneurs and MSMEs, including those led by such displaced individuals, as well as to MSMEs that provide them with employment and training opportunities.
The remaining US$ 5 million will be provided through the Green Economy Financing Facility (GEFF), supported by the GCF and the CIF. This portion of the funding will be available for green investments, with a focus on climate adaptation and mitigation technologies. Eligible investments include solar photovoltaic panels, geothermal heat pumps, electric vehicles and charging infrastructure. Borrowers will also benefit from technical assistance and additional investment incentives to support these projects.
Araratbank, a longstanding partner of the EBRD, is participating in the EU4Business-EBRD Credit Line and GEFF facilities for the first time. The EBRD has invested more than €2.5 billion in 221 projects in Armenia since the start of its operations there in 1992.
