A loan agreement to finance agricultural equipment supplies to Kyrgyzstan takes effect
Moscow, 17 November 2014. Last Friday the agreement between the Kyrgyz Republic and Eurasian Development Bank (EDB) on the provision of an investment credit to finance agricultural equipment supplies to Kyrgyzstan took effect.
The project is financed by the EurAsEC Anti-Crisis Fund managed by EDB and envisages the provision of US $20 million to the Kyrgyz Ministry of Finance to finance the purchases of agricultural equipment. The loan is extended for twenty years on special beneficial conditions (with an interest of 1% p.a. and a grace period of eight years).
The loan will be used to purchase about 4,200 pieces of equipment, primarily tractors with attached components and combine harvesters. Approximately US $2 million will be used to set up the infrastructure for the maintenance of this equipment.
Within two years the Ministry of Finance will allocate the loan among farmers through Aiyl Bank, which will provide sub-loans for the lease of equipment. Since sub-loans have a shorter repayment period, over twenty years farmers will lease equipment to the tune of up to US $120 million. The repayments and the interest paid on the loan provided by the Ministry of Finance to Aiyl Bank will be used to set up a targeted state fund for the support of lease, and Aiyl Bank will continue to provide loans for the lease of equipment from this fund.
Eurasian Development Bank is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth and the expansion of mutual trade and other economic ties in its member states. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan. Read more at http://www.eabr.org.
The EurAsEC Anti-Crisis Fund (ACF) amounting to US$8.513 billion was formed on 9 June 2009 by the governments of six countries: Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. The objectives of the ACF are to assist the member countries in overcoming the consequences of global financial crisis, ensure their economic and financial stability, and foster integration processes in the region. The ACF member countries signed the Fund Management Agreement with Eurasian Development Bank giving it the role of the ACF Resources Manager. Read more at http://efsd.eabr.org.