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EBRD extends $20 million credit line to Georgia’s Bank Republic
Funding will support increasing demand for longer tenor and larger size loans in Georgia
The EBRD is extending a $20 million credit line to Georgia’s Bank Republic to meet the requirements of its private clients for larger loans. The facility will be used to provide medium-term financing to Georgian private companies with sub-loans of between $2 million and $27 million with maximum maturity of up to eight years.
BR, a medium-sized bank, is one of the most active of the EBRD’s partner banks. Founded in 1991, it has been among the most profitable banks in the country over the last five years. Currently owned by French Societe Generale Bank, it is ranked 5th in the Georgian banking sector by total assets. It is growing dynamically and is now expanding its business to offer a wider scope of products. The EBRD loan will provide medium-term funding and will be used for on-lending to local medium sized enterprises, addressing a major constraint for the growth of this segment of the economy.
The credit line comes under the Bank’s Medium Sized Co-financing Facility (MCFF). The MCFF is for co-financing with leading local banks in the early transition countries (ETCs). This assists local banks to better manage risk exposures to its large customers, improving access to finance for growing local private companies by addressing the existing financing gap in the markets.
“Successful medium sized companies constitute one of the most dynamic segments of the private sector. Through this facility EBRD will assist private companies, with high standards of corporate governance and business conduct, to develop further stimulating competition in the respective market sectors and demonstrating good practice to other companies in the region.” said Michael Davey, EBRD Director for Caucasus, Moldova & Belarus.
“We are happy to continue our strong relationship with the EBRD with this credit line, and, in general, with any potential projects in the future,” said Mr.Gilbert Hie, CEO of Bank Republic.
Georgia is part of the EBRD’s Early Transition Countries Initiative (ETCI). Launched in 2004, the Bank accepts higher risk in the projects it finances in the ETC countries, while still respecting the principles of sound banking.
The EBRD, one of the largest private sector investors in Georgia, has to-date signed a total of 72 investment projects in the country covering energy, transport, agribusiness, general industry and banking for a total commitment of almost €400 million.
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