This PSD pertains to a historical Bank project that was approved several years ago. It does not signify a new approval or the allocation of fresh funds. The disclosure of this PSD was postponed in accordance with the transparency framework at that time. However, due to an administrative oversight, it was not subsequently disclosed.
Unveiling the Details of a Historical Bank Project
Project Description
In February 2010, the EBRD approved a financing package consisting of three senior loans with a total amount of up to EUR 100 million. These loans were signed with three subsidiaries of the Intesa Sanpaolo (ISP) Group. The purpose was to support a systemically important banking group in the EBRD's operating countries such as Hungary, Serbia, and Bosnia and Herzegovina. This financing package was part of the EBRD's crisis response within the context of the Joint IFI Action Plan to address the impact of the 2008 global financial crisis on the availability of funding from banks, especially for the real economy and SMEs.The historical Bank project and the EBRD's financing package played a crucial role in providing medium and long-term debt to support SME financing in these three countries. It enhanced the ability of ISP subsidiaries to continue lending to the real economy and dedicated funding specifically to the SME sector, which was severely affected by the global financial crisis and faced a shortage of funds.Project Objectives
The main objective of the financial package was to offer medium and long-term debt to facilitate SME financing in Hungary, Serbia, and Bosnia and Herzegovina. By doing so, it aimed to improve the access of the SME sector to finance and contribute to the economic recovery. This support was essential as the SME sector was one of the most affected parts of the economy during the crisis.The EBRD's efforts through this financial package demonstrated its commitment to addressing the challenges faced by the real economy and SMEs. It provided a much-needed lifeline to these businesses, helping them to continue their operations and contribute to the growth of the local economies.Transition Impact
The project had a significant impact on market expansion. By providing long-term funding to ISP subsidiaries with a strong market presence, it created a good platform for the channelling of funds to the real economy. This led to an increase in the SME sector's access to finance, which was crucial for their growth and development.Moreover, the project also contributed to increased business conduct standards. The three ISP network banks were required to inform their customers of the risks related to borrowing in foreign currency and make them fully aware of these risks through appropriate disclosures. This enhanced transparency and helped to protect the interests of both the banks and their customers.Additionality
During the period of the financial crisis when medium-to-longer financing tenors were not readily available in the market, the Bank's lending was additional to this financial package. The use of local currency loans to SMEs and the agreement by client banks to provide FX risk information disclosures for FX loans to SMEs or eliminate FX loans from their product range to SMEs further enhanced the additionality of the Bank's support.This additional support was crucial in helping SMEs to access the financing they needed during a time of crisis and uncertainty. It demonstrated the Bank's willingness to go the extra mile to support the real economy and SMEs.Environmental and Social Summary
As a Category FI project, the project was required to comply with the EBRD's applicable environmental Performance Requirement. This meant that local loans and borrowers had to conduct their business in accordance with Performance Requirement 2 (Labour and Working Conditions) in all their commercial lending/leasing activities. All borrowers were also required to adhere to applicable national environmental, health, and safety and labour requirements and submit annual environmental and social reports to the Bank.This emphasis on environmental and social responsibility showed the EBRD's commitment to sustainable development and its efforts to ensure that its projects have a positive impact on the communities and environments in which they operate.Implementation Summary
The financial package assisted the ISP Group in diversifying the funding base of its selected subsidiaries. By providing medium-long term financing that was not available in the market at that time, it allowed ISP subsidiaries in the region to continue lending to the private sector on a sustainable basis. This helped to avoid maturity gaps in their balance sheets and demonstrated the Bank's support for the ISP group in its business operations in the EBRD's countries of operation.At the operating bank level, the three loans under the financial package encouraged continued or expanded SME lending in all three cases. They also brought further pressure to reduce FX lending to retail and SME clients. Policy statements to this effect were included in the loan agreements and were highly relevant to ISP's Hungarian and Serbian subsidiaries, where both bank clients reduced or ceased FX lending to SMEs and retail clients.Business Opportunities
For business opportunities or procurement, please contact the client company. For state-sector projects, visit EBRD Procurement at Tel: +44 20 7338 6794 or Email: procurement@ebrd.com.For general enquiries related to EBRD projects (not related to procurement), please call Tel: +44 20 7338 7168 or Email: projectenquiries@ebrd.com.Public Information Policy (PIP)
The PIP outlines how the EBRD discloses information and consults with its stakeholders. It aims to promote better awareness and understanding of the EBRD's strategies, policies, and operations. To find out how to request a Public Sector Board Report, please visit the Public Information Policy page.
