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Georgian business gets new access to finance
EBRD provides co-financing loans to TBC Bank and Bank of Georgia
To ease access to medium and long-term funding for Georgian enterprises, the
EBRD is providing finance to two leading local banks. TBC Bank and Bank of
Georgia (BOG) are attracting $10 million each under a new EBRD co-financing
facility that aims to meet growing demand in some of the Bank’s poorer
countries of operations.
In addition to providing long-term funds to the local banks for on-lending,
the EBRD will also co-finance projects directly – taking direct risk on
medium-sized Georgian enterprises by lending money alongside TBC or Bank of
Georgia. This will allow borrowers to receive larger loans than the local
banks have the capacity to provide on their own. Sub-loans made jointly by the
banks and the EBRD to local clients will typically range from $2 million to $8
million, with a maturity of up to five years.
The financing will help TBC and BOG better serve the market and compete with
banks that have a higher equity base, said Nikolay Hadjiyski, Head of the
EBRD’s Resident Office in Tbilisi. Such support will help sustain development
of Georgia’s private sector and promote employment.
The EBRD’s Early Transition Countries (ETC) initiative, launched in 2004, aims
to stimulate market activity in these countries by using a streamlined
approach to financing more and smaller projects, mobilising more investment,
and encouraging economic reform.
The EBRD has signed 22 projects in Georgia, totalling €257 million, with about
two-thirds in the private sector. Alongside EBRD funding, an additional €1.4
billion has been mobilised.
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