EBRD, Bank CenterCredit to launch 18 mln euros factoring program for Air Astana suppliers

ASTANA. March 17 (Interfax) - The European Bank for Reconstruction and Development and Kazakhstan's Bank CenterCredit have agreed to launch a supply chain financing or reverse factoring program worth 18 million euros, the bank's press service reported.

The EBRD will take on half the risk in financing suppliers provided by BCC.

The first operation under the program will aim to support suppliers of Air Astana airline. BCC will act as the program administrator, with EBRD participation on an unfunded basis.

"The funds from the five-year reverse factoring program will be used for early payment of invoices from selected Air Astana suppliers, at a discount, which will optimize their cash flows and reduce their dependence on traditional working capital financing," the EBRD said in a statement. In turn, Air Astana will be able to extend payment terms, optimizing cash flow management.

More than 30% of the airline's operating expenses go to purchases from local suppliers, including catering services, maintenance, and other services.

The mechanism is expected to provide access to financing for local small and medium-sized enterprises.

The EBRD also plans to support suppliers in meeting environmental, social and governance (ESG) standards.

The EBRD has invested about $12 billion in Kazakhstan across 345 projects to date.