Project Description

The provision of a senior unsecured loan of US$ 25 million in KZT equivalent to JSC Home Credit Bank, Kazakhstan, (HCBK) under the Kazakhstan Green Economy Financing Facility II (KazGEFF II).The proceeds of the loan will be used to on-lend to eligible retail (and potentially SME) sub-borrowers, selected according to the technical, financial and environmental eligibility criteria in a gender responsive way.

Project Objectives

The project will facilitate the expansion of green investments, providing positive demonstration effects of such investments, through gender-responsive on-lending to the private sector in Kazakhstan. It will also help develop the internal capacity of HCBK to finance Green Economy Transition (GET) projects and identify and fund advanced systems. Furthermore, it will support the accelerated market penetration of green technologies, which go beyond prevailing standards. The EBRD will engage with HCBK and assist the bank with implementation of the ESG disclosure regulations and guidelines to be launched by the local regulator.

Transition Impact

ETI score: 70The proposed GEFF loan to HCBK will be provided under the KazGEFF II (OpID 53502) and contribute to the Green TI quality in line with the Green TI assessment methodology, with 100 per cent of the use of proceeds allocated to GET activities.

Client Information

HOME CREDIT BANK KAZAKHSTAN JSCHCBK is the 13th largest bank in Kazakhstan (out of 21) with total assets of US$ 1.2 billion, equity of US$ 307 million and market shares of 1.3 per cent in total assets, 1.9 per cent in customer loans and 0.9 per cent in deposits as of 1Q2023. The bank has one million active clients and operates 17 branches and 49 offices across the country. HCBK is currently rated BB-/stable by Fitch.

EBRD Finance Summary

USD 25,000,000.00

Total Project Cost

USD 25,000,000.00

Additionality

Financing structure:(i) The EBRD offers local currency financing on terms not readily available in the market.(ii) The EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions.Innovative financing structures and/or instruments:The EBRD offers an innovative green finance instrument that integrates aspects such as climate and environmental, social and governance (ESG) standards and/or climate and ESG risk considerations into the financing structure.Knowledge, innovation, and capacity building:EBRD provides expertise, innovation, knowledge and/or capabilities that are material to the timely realisation of the project's objectives, including support to strengthen the capacity of the client. This includes support to better integrate gender considerations into HCBK's lending strategies and practices.

Environmental and Social Summary

Categorised FI (ESP 2019): HCBK will be required to comply with PRs 2, 4 & 9, and further, implement and comply with the relevant EBRD's Environmental & Social (E&S) Procedures. The client has completed and returned the E&S due diligence questionnaire and ESD has engaged directly with client management to discuss the implementation of the PRs. The E&S risks posed by the client's operations are typically low but they will implement an appropriate risk management system as required by PR9. The client will require to ensure that training is provided to relevant staff either through the on-line courses provided by EBRD or in-person. The client will be supported by the GEFF consultant who will also ensure that all relevant EBRD Guidance will be followed. All FI clients will be required to submit annual environmental and social reports to the Bank.

Technical Cooperation and Grant Financing

HCBK will benefit from direct TC support of up to € 500,000 for dedicated capacity building and project origination support. The total TC package under the KazGEFF II amounts to € 2.7 million. The TC will help (i) increase financial intermediation for GET investments in Kazakhstan, ii) improve the skills of PFIs, including HCBK, in appraisal of a broad set of eligible technologies, iii) raise awareness and build the capacity of the private sector to prioritise their investments in green technologies and services, and (iv) mainstream gender perspective into operations, including awareness raising activities. The TC funds will be provided by the Climate Investment Fund ("CIF") and the EBRD Shareholder Special Fund ("SSF").

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.