Export Development Canada (EDC), the European Bank for Reconstruction and Development (EBRD), and Raiffeisen Leasing (Russia) have signed an agreement for an innovative US$45mn leasing programme designed to facilitate purchases of equipment by small-to-mid-sized buyers in Russia from vendors located in Canada and other EBRD member countries.
The agreement was signed by EBRD president and CEO Jean Lemierre and EDC president Eric Siegel. Siegel and. Lemierre underlined the broad advantages of the programme that will offer the unique opportunities of leasing in the Russian market and the strong market position of Raiffeisen Leasing, one of Russia’s leading leasing companies.
“Russian mid-tier markets are experiencing explosive growth, but are constrained by lack of access to capital,” said Siegel. “At the same time, exporters from Canada and elsewhere have been looking for a lease financing mechanism that can help them serve this market. We tailored the program to this specific market and scenario, and we believe that it will greatly help develop opportunities for vendors.”
Lemierre says that this unique framework had allowed the EBRD and its partners to jointly assume the risk of direct lending to medium and small-sized Russian clients, using leasing as a highly efficient financing vehicle. “EDC and EBRD designed this framework together. We at the EBRD look forward to working with the EDC and other lenders in the coming months and years,” he added.
Transactions under the program will be financed jointly by EBRD and EDC (or, in the case of non-Canadian transactions, a third financial institution), with each lending 45%.
Raiffeisen Leasing will hold 10% of the risk. Among the aspects of the framework are expedited processing times for lease proposals, standardized due diligence, and non-recourse of the lenders to the borrower and the lessor (Raiffeisen Leasing).