The European Bank for Reconstruction and Development (EBRD) has agreed to invest $40m in Armenian lender Ameriabank for a 20%equity stake in the bank.

Out of the total investment, $30m will be used to acquire the stake, while the remaining $10m will be used to boost future capital increases of the Armenian lender.

The investment, which is the largest single-ticket equity deal signed by EBRD in the region, aims to support the growth of Ameriabank and prepare it for a future IPO.

The investment will strengthen Ameriabank by offering additional funds for lending to large corporate and private customers, small and medium-sized enterprises as well as retail customers.

Additionally, an independent director representing the EBRD will join Ameriabank’s board of directors in 2016.

EBRD head of the Yerevan office Mark Davis said: "Increased access to finance is key to enabling local companies to realise their potential. As a shareholder the EBRD will support Ameriabank’s development, with a special emphasis on corporate governance."

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Ameriabank chairman of the board of directors Andrew Mkrtchyan said: "It is a great support for Ameriabank in global capital markets, in line with our strategic goals and aspirations. I am sure that our joint efforts will promote the development of Armenia’s banking sector and contribute to economic growth in our country."