YEREVAN, November 16, / ARKA /. The Green for Growth Fund (GGF) and Armenian Araratbank signed today a $5 million loan agreement to expand the bank’s lending capacity to energy efficiency projects. The agreement was signed by Araratbank CEO Ashot Osipyan and GGF Board member Mikhail  Morshel.

"The agreement consists of three components. The funds will be used to provide loans to individuals (households) to implement energy-saving programs, to Armenian enterprises for purchase of energy-efficient equipment, as well as to companies operating in the field of alternative energy, " Osipyan said.

According to him, about 25% of the fresh funding will be allocated to individuals,  45-50%  to  small and medium businesses, and the rest to alternative energy companies.

"Loans repayment period is up to 5 years, interest rates will range from 11% to 14%. As experience shows the maximum amount of loans in this sector does not exceed more than $ 20,000, however, the agreement provides for a $50,000 limit," Osipyan said.

Mikhail  Morshel said the loan will enable Araratbank to  develop a new product, which will expand its customer base.

"The agreement also provides for technical support to the bank. GGF support team together with Araratbank will develop a lending strategy for energy efficiency projects, as well as a range of specialized products," he said.

Morshel also said that providing Araratbank with loans for  energy saving projects will allow to cut  by at least  20%   energy consumption and emissions of carbon dioxide into the atmosphere.

Araratbank, the successor of Haykap bank, was established in 1991. Its capital as of September 30, 2012 amounted to 14.9 billion drams, liabilities to 84 billion drams. Its assets at the end of third quarter 2012 stood at  98.9 billion drams, the credit portfolio at 48.7 billion drams, and individual term deposits at 17.3 billion drams. Its net profit in the third quarter amounted to 2.9 billion drams. The bank runs 43 branches in the capital and regions. Some 64.18 percent of the bank is owned by Barsegh Beglaryan, 25 percent by EBRD and 10 percent  by Belgian  Incofin Investment Management.  -0-