The European Bank for Reconstruction and Development (EBRD) and the European Union are providing €10 million in new financing for Moldova-Agroindbank (MAIB) and Victoriabank, following steps by Moldova’s key lenders to achieve transparency of ownership and to restore corporate governance.
The loans worth €5 million each are provided through the EU4Business-EBRD credit line and are accompanied by EU grant-based funding which is part of the EU4Business initiative.
The funds are available for investments to improve both production processes and product quality of Moldovan businesses and to strengthen their potential to succeed on the EU market. Exporters can use the funds to make investments that aim to achieve EU standards in the areas of environmental protection, health and safety and product quality and safety.
The Association Agreement between Moldova and the EU provides Moldovan businesses with easy access to the EU’s single market.
With financing from the EU4Business-EBRD credit line, which is available in Moldova, Georgia and Ukraine, the EBRD and the EU are supporting efforts by companies to become more competitive and to trade more successfully on the EU market.
With the latest financing, the programme in Moldova has provided a total of €55 million in loans to five partner banks and €8.25 million in EU grants which help expand the range of financing opportunities for local companies.
The EBRD financing to Victoriabank and MAIB follows a turn-around in corporate governance of these two lenders. In October 2018, the EBRD and two equity firms, Horizon and Invalda, acquired a majority stake in MAIB. Earlier last year Banca Transilvania took ownership control of Victoriabank where the EBRD holds a minority stake.
Henry Russell, the EBRD’s Financial Institutions Director for Western Balkans, Belarus, Moldova and Ukraine, welcomed Moldova’s progress in the banking sector: “As corporate governance and ownership transparency has been restored in MAIB and Victoriabank, we have now resumed lending to these key local lenders in order to expand access to finance for Moldovan businesses.”
Peter Michalko, Ambassador of the European Union to the Republic of Moldova, added: “I would like to highlight EU’s commitment to support the SMEs, as a key element for inclusive economic development. This objective is also highlighted in the Eastern Partnership 20 deliverables for 2020, as stronger economy brings improved living conditions for the citizens of the Republic of Moldova.”
Serghei Cebotari, Chairman of the Executive Committee of MAIB, said: “Access to finance from EU4Business funds opens up new opportunities for Moldova Agroindbank to support the national economy, in particular SMEs. I am fully confident that with loans issued by MAIB from EU4Business resources, local SMEs will improve the quality of their goods and services, thus ensuring their access to the EU market. With the signing of this agreement, MAIB is playing an even greater role in the development of the national economy.”
Bogdan Plesuvescu, CEO Victoriabank added: “With this all important loan, Victoriabank will be able to diversify its credit products by providing customers with access to grant funding and technical advice and also tailor its lending both to SMEs and also larger firms.”
The EBRD is the largest institutional investor in Moldova. Since the start of its operations in the country, the Bank has invested €1.2 billion in more than 125 projects in Moldova’s financial, agribusiness, energy, infrastructure and manufacturing sectors.