The FINANCIAL — The European Bank for Reconstruction and Development (EBRD) is providing the third credit line under a pioneering financing facility, in partnership with the Pilot Program for Climate Resilience (PPCR), aimed at helping households and businesses cope with the effects of climate change.
The credit line in Tajik somoni to the equivalent of US$ 3 million will be provided to IMON International, the largest microfinance institution in the country. Half of the amount will be provided by the EBRD, and half by PPCR, according to EBRD.
The facility, launched on 1 December as the world’s leaders gathered in Paris for the COP21 climate talks, is the first financing mechanism in the region aimed at projects which help adapt to the effects of climate change. The first country to benefit from this financing facility is Tajikistan.
IMON International will on-lend funds in local currency to MSME clients and households which promote climate resilience through reducing soil erosion and pressure on energy and water resources in business operations and agriculture. In addition to funding, IMON International will receive technical cooperation funded by UK DFID Fund.
Richard Jones, Head of the EBRD Resident Office in Tajikistan, commented: “IMON is one of Tajikistan’s most important financial institutions, with strong and innovative management that sets a benchmark in the sector. We are delighted to work with IMON through this excellent partnership with the PPCR to address the financing needs of businesses in a way that enables them to grow while coping with the impacts of a more variable climate, at a very challenging time for Tajikistan’s economy”.
Sanavbar Sharipova, CEO of IMON International, said: “For IMON International these resources are important for implementation of social and environmental projects in support of small and medium-sized businesses and households. Also, this funding will assist in achieving our common goals of climate resilience and sustainable development. This deal is another confirmation of our success in maintaining strong and fruitful cooperation with EBRD”.
IMON International is the country’s largest provider of micro-loans, with over 107,000 clients and 130 regional branches and outlets. It is a long-standing partner of the EBRD which is also a shareholder in the company.
Earlier this month, Bank Eskhata and MFI Humo became the first two recipients of loans under the new financing facility.
So far in 2015, the EBRD has invested €160 million in Tajikistan – a record year. In total, the Bank invested €600 million in the country.