CDB provides $40 million loan to Asaka Bank for on-lending purposes

Project narrative

On October 30, 2017, China Development Bank and Joint-Stock Commercial Bank «Asaka» (Asaka Bank) — a majority state-owned commercial bank in Uzbekistan — signed a $40 million loan agreement. The loan carried the following borrowing terms: an 8-year maturity, an interest rate of 6-month LIBOR plus a 4% margin, a 0.3% commitment fee, and a 0.3% management fee. A sovereign guarantee was not issued in support of the loan. The borrower was expected to use the proceeds of the loan to engage in on-lending activities and support the investment projects of small businesses and private entrepreneurs as well as the purchase of goods and services from China. Uzbek borrowers that receive subsidiary loans from Asaka Bank — through the CDB on-lending arrangement — are expected to borrow at LIBOR plus a 6% margin (i.e. an extra 2% margin/markup for Asaka Bank). As of May 2018, Asaka Bank had issued multiple, subsidiary loans for 4 investment projects worth $2.82 million.