Financing current assets through the EDB funds

Purpose of loan

Funds necessary for the purchase of raw materials, components, spare parts in the framework of the directly funded RKDF investment projects.

Target borrowers

Commercial companies of various organizational and legal forms, financed directly by the RKDF that meet the following qualification requirements in the framework of EDB agreement:

  • A legal entity registered in accordance with the legislation of the Kyrgyz Republic in the territory of the Kyrgyz Republic;
  • The borrower must have all the necessary Permits provided for by the legislation of the Kyrgyz Republic to implement the project;
  • The borrower must meet the RKDF requirements regulating the RKDF investment and lending activities;
  • Projects must comply with the legislation of the Kyrgyz Republic on environmental protection and ecological requirements; as well as on labor relations regulation, in particular, issues of employment of under-age persons and youth, discrimination in the field of labor and forced labor.
  • The borrower must receive the RKDF investment funding. Current assets funding can only be provided during the Investment Finance Agreement term.

Loan type

Framework agreement for the current assets

Loan amount and currency

The maximum amount of a framework agreement is 3.0 million US dollars

The minimum amount of a framework agreement is 100 thousand US dollars

The RKDF has the right at any time unilaterally to change the amount of the Framework Agreement with the obligatory writing notification of the Borrower.

The amendment of the Framework Agreement amount does not entail early repayment of the Borrower current obligations to the RKDF in force on the date of the Framework Agreement amendment.

Availability period

Not more than 12 (twelve) months

Loan arrangement

In tranches based on Individual Loan Agreements under the Framework Agreement.

The minimum tranche amount is 100,000 (one hundred thousand) US dollars

Loan terms

Up to 24 (twenty four) months

Interest rate

In US dollars (USD): from 6М LIBOR1 + 5% per annum

The interest rate can be revised twice a year due to the change in the LIBOR rate.

In case of a change in the interest rate, the RKDF notifies the Borrower in writing (according to the terms of the Loan Agreement).

Collateral security

  • Highly liquid assets (securities, deposits) that meets the RKDF requirements;
  • Estate property;
  • Equipment, vehicles;
  • Bank guarantees or corporate guarantees with a rating that meets the RKDF requirements;
  • Inventory (Collateral calculation does not include the cost of inventory)

Some types of collateral are subject to insurance in accordance with the RKDF requirements. The RKDF must be listed as the Beneficiary in insurance policies to receive insurance compensation

Borrower own contribution

The borrower must provide own contribution in the amount of at least 20% of the project current assets amount throughout the Loan Agreement validity term. Own contribution can be expressed in monetary items or assets involved in the project implementation (project for which a loan is requested).

Loan and interest repayment by Borrower

  • interest repayment - monthly or quarterly.
  • repayment of the principal under the Loan Agreement - according to the approved schedule.
  • Exemption period for the loan principal - up to 12 months (by the decision of the RKDF).

Early loan repayment

Once every six months, the Borrower has the right for the early repayment of the loan principal (part of the loan principal) together with the interest accrued by the date of early repayment and another amounts payable subject to the written notification of the RKDF no later than 15 (fifteen) working days indicating the early payment amount and the date of payment.

In the event of the loan principal (part of the loan principal) early repayment is not carried out on the date of interest repayment, the Borrower shall additionally pay the RKDF an early repayment commission in the amount of 1 (one) percent of the early repayment amount.

Loan disbursement monitoring

The RKDF has the right to monitor the fulfillment of obligations by the Borrower in accordance with the requirements of the RKDF internal regulatory documents.

Prohibited practices:

  • child and forced labor;
  • production and distribution of tobacco and alcoholic products;
  • gambling business;
  • manufacture of weapons and military equipment;
  • exchange transactions with foreign currency in cash;
  • investments in any securities;
  • activities prohibited by the legislation of the EDB member states or international conventions relating to the protection of biodiversity or cultural heritage;
  • transactions with real estate, including the land plots purchase, housing construction funding (except for the construction of socially significant infrastructure facilities within the framework of the State Programs of the Kyrgyz Republic), office premises, shopping and recreation centers, which either do not correspond or, in a reasonable EDB opinion may not correspond to the purpose and function of the Loan;
  • production or sale of any product or activity that is illegal under the laws or regulations of the relevant EDB member state, or in international conventions and agreements ratified by the EDB member state. 


 

1 Libor (Eng. London Interbank Offered Rate) - weighted average interest rate on interbank loans provided by banks operating in the London interbank market with the offer of funds in different currencies and for different periods - from one day to 12 months  - http://www.global-rates.com, http://www.global-rates.com/interest-rates/libor/american-dollar/usd-libor-interest-rate-6-months.aspx