Opec Fund signs $30m loan deal to support Armenia's private sector

Agreement will help businesses gain access to funds, create jobs and boost green energy projects

The Opec Fund loan will help boost Armenia's economic resilience. Bloomberg

The Opec Fund for International Development and Ameriabank, the largest universal bank in Armenia, signed a $30 million long-term senior loan agreement to support private-sector development in the West Asian country.

About 50 per cent of the Opec Fund’s loan will be directed at financing small and medium-sized enterprises, providing access to finance and allowing businesses to receive the necessary funds to grow their businesses and to retain and create jobs.

The other half will be dedicated to supporting green projects, increasing energy efficiency and reducing carbon emissions.

“We are happy to continue our successful co-operation with Ameriabank with a new facility to finance SMEs, energy efficiency and renewable energy projects in Armenia,” Tareq Alnassar, the Opec Fund's assistant director general for private sector and trade finance operations, said in a statement on Friday.

“Our new loan will help to provide working capital for SMEs, promote sustainable energy and contribute to economic resilience.”

The Opec Fund and Ameriabank have been co-operating since 2015, contributing to the Armenian economy through SME financing and trade finance facilities.

The first financing of $20m supported SMEs across a diverse range of sectors including wholesale trade, material production, food production and the hotel industry. The second loan worth $25m helped fund the expansion of Ameriabank’s international trade portfolio.

The two facilities have supported over 130 businesses in Armenia.

The financing is also in line with the partners’ commitment to the UN's Sustainable Development Goals of less expensive clean energy as well as decent work and economic growth.

“SME financing has been our strategic focus and we are happy to be joining efforts again to offer long-term financing to our small business clients,” said Artak Hanesyan, chief executive of Ameriabank.

“In line with our green strategy, the funds will be primarily directed to energy efficiency projects, improving Ameriabank’s environmental footprint further.”

The Opec Fund is the development finance arm of the Organisation of the Petroleum Exporting Countries. In April, it pledged $1 billion to help developing economies cope with the economic fallout of the coronavirus pandemic.

Ameriabank is the largest bank in Armenia by key indicators, rapidly growing its business with a special focus on green financing. Since 2009, it has financed more than $250m in renewable energy projects including solar photovoltaic and wind power.

Masdar, Abu Dhabi's clean energy company, announced on Friday that it had signed an agreement with the government of Armenia to develop a 200-megawatt solar photovoltaic plant, which will be the West Asian nation's largest utility-scale solar facility.