1.        

Eligible lessees

Commercial and non-commercial companies or individual entrepreneurs registered and running their operations in Armenia

2.        

Purpose of financing

2.1.    Purchase or import of new (not used) machinery and equipment and their accessories that will be used in Armenia ^{1 2}

2.2.    Capital construction works by a VAT-paying contractor in case of installation and maintenance of machinery, where the entity has purchased the machinery and equipment specified in clause 2.1⁴.

3.        

Down payment

Minimum 15% of the leased item value

Down payment to the value of leased item: 15/100%

4.        

Currency of finance

Armenian drams, US dollars, Euros

5.        

Financing limit

• Minimum amount of finance lease: over AMD 5 million
• Maximum amount of subsidy under the program per entity³

1. Machinery and equipment and their accessories: AMD 1 billion or its equivalent in foreign currency (at the exchange rate effective at the time of the Agreement signing)
2. Capital construction: 30% of the value of the machinery and equipment purchased for the capital construction

5.1.     

Finance limit for the lessees having their statutory capital increased by AMD 200 million and more during 12 months preceding the date of application for finance

Minimum amount of finance lease: over AMD 5 million

Maximum limit of the subsidized amount of finance lease in AMD: 5-fold of the investment in the statutory capital or AMD 10 bn, whichever is greater. Maximum limit of the subsidized amount of finance lease in foreign currency: foreign currency equivalent of AMD 5 bn

6.        

Nominal interest rate

Annual percentage rate (APR)

AMD: 10-15%

Foreign currency: 8%-10%

AMD: 10.67-18.57%

Foreign currency: 8.5-12.96%

7.        

Interest rate subsidy

AMD: 10 p.p.

Foreign currency: 8 p.p.

8.        

Terms of interest rate subsidy

Interest rate subsidization is subject to the Program terms

• equivalent amount of AMD 200 million: up to 42 months
• equivalent amount of over 200 million: up to 36 months

Note, that interest (if any) accrued by the date of submission of the leased item to the lessee based on the acceptance act will be subsidized only for 180 days of the delivery stage (i.e. the period from Finance Lease Agreement execution date till handover of the leased item to the lessee based on the acceptance act). The interest accrued after 180 days of the delivery stage is not subject to subsidy and must be paid fully lump sum by the lessee at the interest rate specified in the agreement.

9.        

Fee for provision of finance

 N/a

10.    

Lease term

12-120 months

11.    

Repayment of principal amount before due date

No fines or penalties for early repayment during the term of subsidy. If subsidy is rejected or terminated, the lessee will be required to pay a lump-sum fee of 3% of principal amount of finance, if the early repayment was made during the first 12 (twelve) months after provision of finance.

12.    

Non-payment or improper payment of principal and interest⁴

Fine in the amount of 0.13% of overdue principal and/or interest for each day beyond terms

The amount of fines and/or penalties shall not be subsidized.

13.    

Repayments

Even monthly payments of the principal or annuity as per schedule

14.    

Grace period

Maximum 6 months for the principal amount, starting from the date of provision of finance

15.    

Security

• Guaranty provided by the lessee’s director/founder/other person
• Pledge of property/right upon request

16.    

Insurance

The leased item is insured against damage and loss on annual basis. Insurance is obtained by the lessee.

17.    

Other terms

Other terms shall be subject to the Republic of Armenia Government decision N 355-Լ as of March 26, 2020.