The EBRD is stepping up its support to the real economy in Georgia with new funds for on-lending to local businesses.
The EBRD is stepping up its support to the real economy in Georgia with new funds for on-lending to local businesses.
To improve access to medium-term funding for Georgian enterprises, the EBRD is providing $20 million to Bank of Georgia to help it meet the growing demand for credits from Georgian companies and to provide larger loans to its customers.
The EBRD funds, provided under the Bank’s Medium-sized Co-Financing Facility*, will be used to co-finance investments and working capital of medium and large-sized Georgian companies alongside the Bank of Georgia.
This latest financing builds on an earlier facility of $5 million provided to Bank of Georgia.
Bank of Georgia is the largest Georgian bank, holding approximately one third of the market share.
It offers a broad range of corporate and investment banking, retail banking, wealth management and insurance services to its customers in Georgia, Ukraine and Belarus, and has over 140 branches country-wide. Since November 2006, the Bank of Georiga has been listed on the London Stock Exchange.
“As a key provider of medium and long term finance to the Georgian banking sector, the EBRD is pleased to enhance its cooperation with Bank of Georgia and boost the availability of the much needed funds to local companies. This loan will enable more businesses to access bank financing and will facilitate their growth in current difficult market conditions,” said Paul-Henri Forestier, EBRD Director for Caucasus, Moldova & Belarus.
“We are delighted to announce yet another initiative from one of our key lenders, demonstrating EBRD’s readiness to support credit growth in Georgia in this crucial time. We are certain that this new tranche of the EBRD’s Medium Term Co-Financing Facility will provide the needed boost to the availability of corporate credit and play into the general rebound of the economy that we are beginning to observe,” said Irakli Gilauri, Bank of Georgia’s Chief Executive Officer.
In December last year, the EBRD teamed up with the IFC to provide Bank of Georgia with a financial package worth up to $200 million to help it manage the effects of the global financial crisis. That investment was aimed partly at supporting the bank’s capital base and also providing longer-term liquidity that allowed the bank to continue lending to retail clients and small and medium enterprises.
Since the beginning of its operations in Georgia, the EBRD has committed over €580 million in approximately 100 projects in the financial, corporate, infrastructure and energy sectors. The EBRD funds generated additional investment worth more than €570 million in Georgian economy.
*The medium-sized co-financing facility is one of the EBRD instruments aiming to stimulate market activity by using a streamlined approach to mobilising more investment for viable private companies and encouraging economic reform, while still respecting the principles of sound banking.