On 21 December, the European Bank for Reconstruction and Development (EBRD) and the European Union (EU)  provided over €250 million in credit lines to local financial institutions in the Eastern Partnership countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) to make businesses more competitive across the regions where the EBRD operates, reported the EBRD.

The loans will help small- and medium sized enterprises (SMEs) to benefit from the opportunities brought about by the Deep and Comprehensive Free Trade Areas (DCFTA) as well as other EU Partnerships Agreements, such as the EU-Armenia Comprehensive and Enhanced Partnership Agreement. Meanwhile, the EU is providing €67.6 million in grants to support these investments through technical assistance, which will raise awareness of green technologies with high market potential and encourage sub-borrowers to adopt them by providing investment incentives. The EU is also supporting local currency financing.

Since 2016 the EU4Business-EBRD credit line has supported more than 250 enterprises, ranging from furniture producers and agribusinesses to tourism operators and businesses active in most sectors of the economy. “This is a flagship project for the EBRD and our key partner, the EU, in the region,” said Pierre Heilbronn, EBRD Vice President, Policy and Partnerships. “We work together to improve people’s lives and build sustainable and integrated economies. It underlines the success and positive impact of our joint work that we are now in a position to extend our credit line to more countries.”

Christian Danielsson, Director – General for Neighbourhood and Enlargement Negotiations at the European Commission, said: “The EU is proud to extend its support to SMEs across the Eastern Partnership making the region closer to the EU through trade opportunities, providing access to finance in local currency and progressing on the green agenda together with partner countries”.

The EBRD is a leading institutional investor in Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine. To date, the Bank has invested close to €27 billion in the six countries in over 1,200 projects. The European Union’s EU4Business initiative is an umbrella initiative that covers all EU activities supporting SMEs in the Eastern Partnership countries. The EU believes that small and medium-sized enterprises (SMEs) are indeed a key ingredient of economic life. According to EU data, in the Eastern Partnership region, SMEs represent between 83% and 99% of all firms, and account for 50% of all jobs according to the OECD in 2017. This, however, still lags behind EU countries, where SMEs account for over two-thirds of employment, and 85% of new jobs created in the past five years. Across the six Eastern Partnership (EaP) countries EU4Business provides: access to finance, access to markets and access to knowledge. SMEs in countries that have signed an Association Agreement, including a Deep and Comprehensive Free Trade Area with the EU, get additional support from the DCFTA Facility for SMEs. More than €1.96 billion of loans have been granted by partner banks to SMEs in the region under the EU4Business initiative. Through this programme, the EU has so far supported the creation of over 28,000 jobs, while more than 66,000 SMEs have benefited from EU support and 11,000 people have received training.