Instruments
All EFSD loans and credits are repayable, have finite maturities, and carry interest. The Fund also extends grants for social projects of the Fund member states on a non-repayable and non-reimbursable basis.
To receive an EFSD financing, a borrower should have no debt arrears to the EFSD itself, to any of its member states, or to other IFIs. All EFSD credits and loans are extended within country access limits, set in proportion to GNI per capita of the member states.
Lending decisions are based on the assessment of:
- the urgency of a country’s financing needs;
- the country's long-term debt sustainability;
- the borrower’s institutional capacity to achieve targets established by the EFSD’s programmes and projects;
- the quality of governance and effectiveness of a borrower’s anti-corruption framework (taking into account assessments made by the World Bank, the IMF, and other IFIs).
Financial credits are extended only to member states governments, to support anti-crisis and stabilization programmes formulated and implemented by the borrowers.
The programmes should include measures aimed at ensuring macroeconomic stability and improving business climate, ensuring long-term development and fiscal and debt sustainability, fostering financial and economic cooperation among member states. Progress in reform implementation is measured by specific indicators and is evaluated by the EFSD Council on the basis of reports of the EFSD Manager.
The minimum amount of financial credit is US$ 10 million.
Procedure for evaluating an application and decision-making is set forth in the Regulation on the issue of financial credits from the EFSD funds.
Investment loans are extended primarily to support interstate investment projects that spur integration among member states, e.g., in the power and infrastructure sectors, and big national investment projects. Investment loans are granted either to companies implementing such projects or member states themselves.
The EFSD only supports projects that cannot be financed from the market on financial terms that are suitable for a given project and at acceptable risk levels.
The procedure for granting investment loans comprises two stages of approval:
- preliminary, when a Concept Note and resources for a feasibility study are considered;
- final, when the granting decision is made.
Minimum size of investment loan is:
- US$ 30 million for countries with GNI per capita over US$ 5,000;
- US$ 10 million for other countries
Grants for social projects
Since 15 June 2015 the up to 10% share of the annual net profit of the Eurasian Fund of stabilization and development can be used per year to provide grants to the Republic of Armenia, the Kyrgyz Republic and Tajikistan.
Grants are available for social projects of the member states in the following social spheres:
- education;
- healthcare;
- good governance;
- social security and protection, including food security.
Grants are provided in US dollars and /or euros.
The amount of grant provided for one project is:
- not less than US$ 500 000 and not more than US$ 2 000 000 with a term of implementation of up to 1.5 years;
- not less than US$ 2 000 000 and not more than US$ 5 000 000 with a term of of implementation of over 1.5 years.