AT1 capital loan to Bank of Georgia

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Overview

The financial package consists of parallel loans to the Company for the total amount of up to USD 50 million (EUR 46 million) in Basel III compliant Additional Tier 1 ("AT1") capital instrument. The Bank will finance a portion of up to USD 35 million (EUR 32 million) and the parallel lender, Swedfund, will provide the remaining up to USD 15 million (EUR 13.8 million). This will be the first-ever AT1 capital loan provided by the Bank.

Project ID 53106

Status Disbursing

Location

Georgia

Business Sector

Financial Institutions

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Company Contact Information

Levan Kobiashvili
lkobiashvili@bog.ge
(+995 32) 2444 444
https://bankofgeorgiagroup.com
Tbilisi, 29A Gagarini Str., 0160

Project ID 53106

Status Disbursing

Location

Georgia

Business Sector

Financial Institutions

Notice Type

Private

Environmental Category

Approval Date

25 May 2022

Disclosure date

01 Jun 2022

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

AT1 capital loan to Bank of Georgia (Georgian) (PDF, 0.13MB)

Project description

Project objectives

The key objectives of the proposed loan are focused on strengthening Bank of Georgia's capital by bolstering Tier 1 equity, optimising capital structure in line with Basel III Pillar 2 phase-in plan and currency-diversifying the capital base. Furthermore, Bank of Georgia will undertake to deploy the full amount of USD 50 million into GET-eligible investments.

Transition impact

ETI Score:68

capital loan will support and contribute to two Transition Impact qualities: Resilient and Green. It will strengthen systemic bank's Tier 1 capital and optimise its structure as well as diversify currency composition and further insulate the bank's equity from local currency volatility thus enhancing Bank of Georgia's resilience to support continuous flow of credit to the real economy. In addition, the bank will undertake to finance GET-eligible investment for the total amount of the capital loan. The loan will contribute towards building a green economy by facilitating investments in climate mitigation and adaptation technologies, increasing their market penetration, providing know-how and positive demonstration effects to private sector sub-borrowers.

Client information

BANK OF GEORGIA JSC

The Company is the second largest and systemically important universal bank in Georgia with ~ 35%-40% market shares in sector loans and deposits. The bank is the core entity (90% of total assets) of Bank of Georgia Group PLC ("BoGG Group"), a UK incorporated holding company listed on the premium segment of the London Stock Exchange (LSE) since 2012 (listed since 2006).

EBRD Finance Summary

USD 35,000,000.00

EBRD will finance a portion of up to USD 35 million (EUR 32 million) with Swedfund providing the remaining up to USD 15 million (EUR 13.8 million).

Total project cost

USD 50,000,000.00

The project consists of two parallel capital loans for the total amount of up to USD 50 million (EUR 46 million).

Additionality

Additionality sources include (i) financing structure as project offers capital resources not available in the market, (ii) resource mobilisation with Swedfund joining as a parallel lender, and (iii) knowledge and capacity building through complimentary technical assistance to support bank's efforts in identifying, assessing and developing GET-eligible pipeline and portfolio.

Environmental & Social Summary

Bank of Georgia is well known to the Bank through a number of transactions, over a number of years. BoG has a well-developed suite of policies and procedures for the management of key issues under PRs 2, 4 and 9. In 2018, BoG adopted a revised Environmental and Social Policy for the Group covering direct and indirect impact on society and the environment and describing the Group's strategy to conserve natural resources, minimise health and safety risks, and provide employees with equal development opportunities, fair compensation and benefits. The bank has persons nominated to be responsible for E&S issues and adequate capacity to implement and monitor those policies and procedures. BoG will be required to continue compliance with PRs 2, 4 and 9 and to provide the EBRD with annual E&S reports.

Technical Cooperation and Grant Financing

Bank of Georgia will benefit from streamlined TC assignment for EUR 75,000. The main objective of the assignment is to enable screening, assessment and reporting of GET-eligible investments. The assignment will go beyond the primary objective through the provision of capacity building to the bank and its staff, as well as sub-borrowers to ensure continuity of know-how and skills transfer to further address the climate mitigation and adaptation strategies.

Company Contact Information

Levan Kobiashvili
lkobiashvili@bog.ge
(+995 32) 2444 444
https://bankofgeorgiagroup.com
Tbilisi, 29A Gagarini Str., 0160

PSD last updated

01 Jun 2022

Understanding transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with the EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and its associated Environmental and Social Requirements (ESRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”. The ESP and the ESRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation, and to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about the environmental and social (E&S) performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD also requires its clients to disclose information, as appropriate, about the risks and impacts of projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all of the Bank's activities in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The EBRD believes that identifying and resolving issues in the project assessment and approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts andhelps to monitor integrity risks in projects post-investment.

OCCO is further responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, either within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. OCCO will follow-up all matters reported. It will review all matters reported. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP, which entered into force on 1 January 2025, sets out how the EBRD discloses information and consults with its stakeholders to promote better awareness and understanding of its strategies, policies and operations. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (for example, through the client’s project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the mechanism is: to support dialogue between project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or the project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate and how to submit a Request for review. Alternatively, contact IPAM by email at ipam@ebrd.com for guidance and more information on IPAM and how to submit a request.

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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AT1 capital loan to Bank of Georgia

Overview

Project timeline

Company Contact Information

Project description

Project objectives

Transition impact

Client information

EBRD Finance Summary

Total project cost

Additionality

Environmental & Social Summary

Technical Cooperation and Grant Financing

Company Contact Information

PSD last updated

Understanding transition

Business opportunities

General enquiries

Environmental and Social Policy (ESP)

Integrity and compliance

Access to Information Policy (AIP)

Independent Project Accountability Mechanism (IPAM)