The European Bank for Reconstruction and Development (EBRD) and Citadele Bank signed a cooperation agreement giving Latvian, Lithuanian and Estonian businesses the opportunity to receive an EBRD guarantee of up to 50% of the loan amount from Citadele Bank.
This means that Baltic business owners will be able to receive bank financing under more favorable conditions, for example, a smaller cost to the business itself.
Under the agreement signed in Riga today by EBRD First Vice President Jurgen Rigterink and Chairman of the Management Board of Citadele Bank Guntis Belavskis, the EBRD will guarantee up to 50% of each individual sub-loan provided by Citadele Bank to eligible clients.
Businesses in Latvia, Estonia and Lithuania will benefit from better access to finance under an unfunded risk-sharing facility of up to 35 mln euros provided by the EBRD to Citadele Bank, the bank informs.
The EBRD Risk Sharing Framework (RSF) is one of the three core financing frameworks of the Bank’s Small Business Initiative, a strategic program dedicated to supporting and developing local private companies in the countries where it invests. The facility is designed to allow the EBRD to share partner banks’ exposures to local enterprises through either funded or unfunded risk participation.
EBRD First Vice President Jurgen Rigterink welcomed the agreement and said: “We share with Citadele Bank the focus on the private sector, the most vibrant sector of the local economy. We are proud to introduce our risk-sharing facility as an innovative solution to the Baltic market and are confident that it will help the businesses with access to finance.”
The EBRD has been investing in the Baltic states since they regained their independence in 1991. To date, total investment stands at more than 2 bln euros through almost 250 projects (Estonia: 626 mln euros / 85 projects; Latvia: 667 mln euros / 80 projects; Lithuania: 793 mln euros / 84 projects).
