The EBRD is extending a US$3mn working capital facility to Armenian Copper Programme (ACP), a private Armenian company operating the only copper smelter in the Caucasus region, to secure its supply of raw materials and improve operational efficiency. The loan was signed within days of two other EBRD deals in Armenia to strengthen a local bank and to extend a programme that promotes foreign trade.
The ACP facility will be used to increase the production of copper and build up reserves of raw materials. It will also free up the company’s resources to permit further spending on environmental-protection measures.
It is the EBRD’s first industrial project with a local Armenian sponsor. Olivier Descamps, the bank’s business group director for Southern and Eastern Europe and the Caucasus, says Armenian Copper Programme plays a vital role in the Armenian economy, not only as an important player in the copper industry but as the largest employer in one of the poorer regions of Armenia.
Valery Medzhlumyan, ACP’s chairman, adds that the bank’s support was vital to enable the company to make full use of its production capacity and to prepare for a reconstruction of the existing smelter aimed at environmentally friendly copper production.
At the same time, the Armenian financial sector is getting a boost from the EBRD. To support micro, small and medium enterprises, the Bank is extending a US$1mn loan to Anelik Bank. The funding is made available under the Multi-Bank Framework Facility established in July 1999 to provide equity and senior debt to commercial banks in Armenia . The proceeds will be on-lent to Armenian entrepreneurs, who will be able to borrow up to US$100,000 each. There is no minimum loan size under the facility, which aims to promote grass-roots entrepreneurship. The loan is the second under the facility, following an agreement with Armeconombank in September 2000.
Moreover, the EBRD is extending a US$500,000 guarantee facility to Armeconombank under the EBRD Regional Trade Facilitation Programme, which aims to promote foreign trade with central and eastern Europe and the CIS by providing guarantees for trade transactions to international confirming banks. The governments of Switzerland , the Netherlands (through FMO and Ministry of Foreign Affairs), Norway , Austria and Germany (via KfW) provide financial support to the Trade Facilitation Programme.