OREANDA-NEWS. October 25, 2011. The Netherlands Development Finance Company (FMO) arranged a USD 25 million loan to Azerbaijan’s oldest bank DemirBank. Signing ceremony took place within the framework of Azerbaijan-Austrian Business Forum held in Baku, reported the press-centre of DemirBank.

USD 12.5 million is provided by FMO, USD 7.5 million by the Development Bank of Austria (OeEB) and further loans amounting to a total of USD 5 million are syndicated to three commercial financial institutions: Raiffeisen Bank International AG, DemirHalk Bank N.V. and Atlantic Forfaitierungs AG.

This transaction is the third syndicated loan received by DemirBank, which constitutes the largest borrowing for DemirBank since the bank’s inception and will help DemirBank to enhance its lending activity to micro, small and medium-sized businesses in Azerbaijan.

A relevant feature of this transaction is the maturity, which is considerably longer than what is currently available for Azerbaijani banks for a similar facility. The FMO and OeEB portions of the loan have a tenor of 5 years. Azerbaijani borrowers normally have access to syndicated loans with a maximum maturity of three years.

“Received funding in combination with existing capacities will help the bank to contribute more to private entrepreneurship, particularly to the small and medium business segment”, mentioned Roman Amirjanov, Chairman of the Board at DemirBank. “Also, success of this transaction will further facilitate access to the international commercial debt markets and extend partnerships between DemirBank and numerous International Financial Institutions in the future”.

"At FMO we value entrepreneurship as one of the main drivers for economic development," said Nanno Kleiterp, CEO of FMO. "This long-term commitment to Demirbank will help to further increase access to finance for SMEs and micro-sized Azerbaijani businesses, boosting entrepreneurship in Azerbaijan. FMO is proud to have syndicated three commercial participants in this loan."

“Supporting small and medium enterprises is key for further development of the private sector in Azerbaijan,” said Andrea Hagmann, Member of the Executive Board of OeEB. The loan for DemirBank will strongly contribute to economic growth and open new possibilities for cooperation between Azeri and Austrian companies.”

About DemirBank: DemirBank (former Azerdemiryolbank) established in 1989 is 25%+1 share owned by the European Bank for Reconstruction and Development (EBRD) and 10% owned by Netherlands Development Finance Company (FMO).

About FMO: FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. With an investment portfolio of EUR 5 billion, FMO is one of the largest bilateral private sector development banks.

About OeEB: Oesterreichische Entwicklungsbank AG (OeEB) has been operating as the official Development Bank of Austria since March 2008. It is specialized in the provision of long-term finance for the implementation of private sector projects in developing countries which create sustainable development.