GGF and ARARATbank boost energy efficiency financing with usd 5 million loan facility26. November 2012. / SEE Energy News
The Green for Growth Fund, Southeast Europe (GGF, the Fund) and Araratbank OJSC (Araratbank, the Bank) signed a USD 5 million loan agreement to strengthen the Bank’s lending capacity for energy efficiency (EE) projects at the retail and micro, small and medium enterprise (MSME) level. The loan will bolster Araratbank’s strategy to position itself as a key player in the green energy finance in Armenia.
The loan facility is dedicated to provide financing to private households and business customers for financing energy efficiency solutions. On the retail side, these include installation of energy efficient windows and doors, thermal wall insulation and replacement of lighting and heating systems among others. For business clients, Araratbank will be able to offer attractive EE loans for upgrading and/or acquiring of EE systems and equipment, replacement of heating and air conditioning systems, of ventilating and refrigerating systems and other energy saving measures.
Araratbank’s portfolio of EE subloans funded by the GGF’s USD 5 million loan is projected to achieve a minimum of 20% in primary energy savings. This will ultimately translate into annual energy savings exceeding 19,580 MWh and CO2 reductions of over 4,392 tons per year. To illustrate the green benefits: it would take about 440 hectares of additional forest to absorb 4,392 tons of CO2 generated in one year.*
The loan comes with comprehensive support by the GGF Technical Assistance Facility, which will work together with Araratbank in developing and implementing an EE lending strategy, and designing dedicated products. On the demand side, the Fund’s technical assistance arm will help maximize impact through proactive marketing and awareness-raising campaigns. Extensive staff training programs will also be part of the capacity building support provided by the GGF Technical Assistance Facility.
Araratbank offers a full range of banking products and services to micro, small and medium-sized enterprises, corporations and retail customers. With a market share of 5 percent as at September 2012, Araratbank ranks 9th in the Armenian banking sector by assets. The Bank is strongly committed to develop EE lending activities in the future.
“The GGF is delighted to announce this cooperation with Araratbank, a solid financial institution dedicated to green finance. The GGF loan boosts its ability to provide a broad customer base with sustainable long term financing for EE projects. Araratbank’s strong regional presence also enables us to maximize the Fund’s outreach while making strides in lowering Armenia’s energy consumption,” said Christopher Knowles, Chairman of the Green for Growth Fund, Southeast Europe.
Ashot Osipyan, Chief Executive Officer of ARARATBANK OJSC, emphasizing that the energy efficiency sector is the strategic sector of the Armenian economy, strongly believes that this constructive cooperation will greatly contribute to the development of the energy efficiency and renewable energy sector. “Within the framework of cooperation with GGF the bank will get a technical assistance, which will enable us to act on the Armenian market with new lending technologies and tools”, said Ashot Osipyan.
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