IFC develops activity in Armenia

PanARMENIAN.Net - IFC investments in Armenia increased from $5 million in 2009 to $35 million as of June 30, 2010. “It is a considerable growth, given the fact that we had been providing consultative assistance rather than financial until recent times,” Mr. Thunell said.

During the visit, he met with Armenian President Serzh Sargsyan and Prime Minister Tigran Sargsyan.

Mr. Thunell also visited Ameriabank to meet with the bank management. He was accompanied by a group of IFC officials.

Mr. Thunell has advanced growth of IFC's business and its mission to create opportunities in emerging markets and improve people's lives. As part of his visit to Armenia, Mr. Thunell visited Ameriabank to be presented with an account of how IFC funds are being spent under the bank’s lending projects, including how they are being utilized by end-borrowers. The partners also discussed options for further cooperation.

The attendees highlighted that Ameriabank has on-lent the IFC funds successfully and in a time-efficient manner. The IFC facilities provided to Ameriabank include a 10 million US dollar credit limit for international trade finance and a $15 million renewable energy (small hydro power plant) loan.

The trade finance facility enabled Ameriabank to promote clients’ foreign trade transactions in Armenia. Ameriabank joined the IFC Global Trade Finance Program (GTFP) as an issuing bank to secure clients’ import and export operations. This program covers, among others, small and medium enterprises. Participation in GTFP makes the bank eligible to cooperate with over 300 other GTFP member banks worldwide.

Highlighting the importance of promoting the renewable energy sector for overall economic development, Ameriabank is actively engaged in its financing through various programs, the press service of Ameriabank reported.

The IFC $15 million facility is being utilized to provide long-term funding for 8 small hydro power plant projects in Vayots Dzor, Gegharkunik and Lori regions of Armenia with overall installed power of 26.08 MWt and expected output of 80.6 mln KWtph.

The small hydro power plant financing project will enhance local power generation capacities and diversify power supply sources by reducing CO¬¬2 emissions and shifting from dependence on imported fuel. The program of the meeting also featured a short video film on the progress of Jermuk-2 small hydro power plant project mostly funded by Ameriabank under IFC renewable energy facilities.

Both parties expect this cooperation between Ameriabank and IFC to expand and aid future progress of Armenia’s economy.

Besides, IFC signed an agreement with Inecobank to further expand access to trade finance for small and medium enterprises in Armenia.

Under the agreement, IFC, through its Global Trade Finance Program, will guarantee individual trade transactions financed by Inecobank.

“Trade is a cornerstone of economic development,” Thunell said at the signing ceremony. “As long-term partners and shareholders, we are very pleased to make support for trade finance yet another stage in our cooperation with Inecobank. Both the bank and its clients, including small and medium size companies, will benefit.”

IFC’s relationship with Inecobank began in 2006. Since then, IFC has provided multiple rounds of financing. Earlier this year, IFC helped the bank increase its microfinance capacity through a performance-based grants program that will enable the provision of more than 71,000 new micro loans to individuals and small entrepreneurs, mostly in rural areas of Armenia, during a three year period.

“We are grateful to IFC for its strong partnership and continuous support,” Baloyan said at the ceremony. “IFC’s Global Trade Finance Program will help us to further develop our trade finance activities, offering our clients more competitive terms, and expanding our international contacts through the program’s global network of participating partner banks.”