Companies and households in Tajikistan will have better access to green technologies and climate adaptation measures thanks to a new financing program approved by the European Bank for Reconstruction and Development (EBRD) for one of the country’s leading banks, the First Microfinance Bank (FMFB), which operates a nationwide network of 7 branches and 40 banking service centres in all regions of Tajikistan. The funds will also be used to stimulate the development of businesses owned or led by youth or women entrepreneurs, the EBRD said.
A financing package consisting of three loans of totalling US$ 10 million (€ 9.2 million) was signed at a ceremony attended by EBRD Managing Director Financial Institutions, Francis Malige and FMFB CEO, Mirzosafar Safarov.
The first loan of up to US$ 4 million (€ 3.7 million) comes under the Tajikistan Green Economy Financing Facility II (GEFF II) and will encourage residential and commercial borrowers to invest in green and innovative solutions that promote the efficient use of water and the sustainable management of land. GEFF II was launched by the EBRD and the Green Climate Fund (GCF) and is supported by donor funding from South Korea, Austria and the GCF.
The second loan of up to US$ 3 million (€2.7 million) comes under the EBRD’s Youth in Business programme (YiB) in Central Asia targeting micro, small and medium-sized enterprises (MSMEs) led or owned by young individuals under the age of 35. Eligible borrowers will also benefit from grants and concessional co-financing designed to stimulate inclusive lending and youth entrepreneurship.
The third loan of up to US$ 3 million (€2.7 million) is provided under the EBRD’s Women in Business (WiB) programme for Central Asia, which is supported by the Women Entrepreneurs Finance Initiative.
The two banks have also signed a mandate letter under which FMFB will receive the remaining US$ 10 million (€ 9.2 million). Similar-sized loans of up to US$ 5 million (€ 4.6 million) each will be provided under GEFF II and YiB at a later stage. $20 million financing package are the largest offerings to a financial intermediary in Tajikistan to date.
