KULOB, December 19, 2008, Asia-Plus — The Tajik Agricultural Finance Facility (TAFF) project, sponsored by the European Bank for Reconstruction and Development (EBRD) and Agroinvestbonk, which has received on-lending funds from this facility, have launched the project for production of agricultural crops from irrigated areas in one more district of Khatlon’s Kulob region – Hamadoni, Sayfiddin Qadamov, head of Agroinvestbonk’s branch in Kulob, said in an interview with Asia-Plus.
According to him, some 40 farming units in Kulob, Vose and Farkhor districts have already actively participating in this project and the bank has provided totaling US$260,000 in loans to them so far. Qadamov noted that experts are currently considering the possibility of launching the project in the Muminobod district as well.
The TAAF project supports the restructuring of Tajikistan’s agricultural sector by providing revolving credit lines to Tajik financial intermediaries (banks and non-bank financial institutions) who will on-lend funds to farmers for seasonal finance. The objective is to provide alternative finance to small farmers and support the freedom to farm concept whilst employing best farming practice particularly with respect to environmental and labor issues. Through coordination with other donor programs, farm yields are expected to increase thereby improving profitability. In parallel the EBRD supports the establishment of a Warehouse Receipts Program.
The TAAF project addresses the structure of the market by fostering enhanced competition and expansion of the market by providing alternative, untied sources of finance which will stimulate competition between buyers and encourage development of input suppliers and associated farm service providers. It is also expected to increase private ownership through stimulating the break-up of the remaining large farms.
The total facility is up to US$35 million in revolving credit lines. Up to US$10 million are provided by the EBRD which will leverage up to US$20 million in commercial and/or official co-financing. A further US$5 million may be provided in risk participation on the sub-loan portfolio.
Agroinvestbonk is one of largest commercial banks in Tajikistan. Founded in 1992, Agroinvestbonk, with headquarters in Dushanbe, has main branches in Koror, Khujand, Kulob and Qurghon Teppa and 57 other branches across the republic.
