The Black Sea Trade and Development Bank (BSTDB), which is headquartered in Greece, has officially been notified by the Bank of Greece the Central Bank of the Hellenic Republic that, as a direct result of its recognised status as a multilateral development bank, its loan activities will be exempted from country risk.
This exemption has been extended to BSTDB by a decree that was issued by the governor of the Bank of Greece on
- February 10, 2003. As from this date, financial exposure of Greek banks and other Hellenic financial institutions to the Black Sea Trade and Development Bank are to be treated as exposure to domestic Greek financial institutions for the purpose of reporting to the central bank. This also applies to any project or corporation that will receive financing from Greek banks and will be guaranteed by BSTDB, irrespective of the project venue or the nationality of the end recipient.
This central bank ‘country risk exemption’ will help Greek banks improve their risk profile insofar as they are co-financing with or through BSTDB and will also contribute to lower the costs of doing business through BSTDB with firms in the greater Black Sea Region. In issuing this decree the Bank of Greece places BSTDB in the same reporting category as other multilateral development banks, such as the World Bank Group and the European Investment Bank.
Black Sea Trade and Development Bank is an international financial institution established by Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and Ukraine. With an authorised capital of SDR1bn, the bank supports economic development and regional cooperation by providing financing, guarantees, and equity for projects supporting both public and private enterprises in its member countries. Since the commencement of operations in 1999, BSTDB’s board of directors has approved operations totaling over US$430mn.