SC Georgian Railway Green Bond



Project number:


Business sector:


Notice type:


Environmental category:


Approval date:

09 Jun 2021



PSD disclosed:

23 Jun 2021

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.

Project Description

USD 50 million subscription in the USD 500  million 7-year unsecured green Eurobond issue (the "Green Bond"), listed on the London Stock Exchange, issued by JSC Georgian Railway (the "Company" or "GR"), a state owned railway company in Georgia, (the "Project").

This is the first Green Bond issued by the Company, underpinned by its newly developed Green Bond Framework aligned with Green Bond Principles, as validated by an independent second party opinion.

Project Objectives

The Eurobond proceeds will be applied to the refinancing of the Company's existing bond issued in 2012 and to finance remaining capital expenditures necessary to complete the ongoing Railway Modernisation Project. The Bank's proceeds will be directed solely towards refinancing.

Transition Impact

ETI score: 67

The Transition Impact arises from the Resilient and Inclusive qualities:

Resilient - The Project will contribute to capital market development in Georgia and be the second green Eurobond issued in the country and the first issued by a state-owned entity (SOE). In addition, the Bank will support GR with the introduction of a Digitalisation Framework focusing on the enhancement of profitability and operational efficiency.

Inclusive - The Company will establish key recruitment tools and introduce targeted activities (i.e. updated vocational training programmes) to attract youth talent, particularly young females into engineering and technical positions. The introduction of equal opportunity policies and practices is expected to improve the gender balance across the Company's operations and increase the female workforce share in currently male-dominated occupations.

Client Information


JSC Georgian Railway is Georgia's national state-owned railway company, providing freight and passenger transportation services and managing railway infrastructure. The sole shareholder of the Company is JSC Partnership Fund, a national investment fund formed in 2011 and 100 per cent owned by the Government of Georgia.

EBRD Finance Summary

USD 50,000,000.00

Total Project Cost

USD 500,000,000.00


The Bank's additionality derives from supporting the Company's access to the international capital markets in the context of uncertain market conditions.

Environmental and Social Summary

Categorised B (ESP 2019). The environmental and social due diligence (ESDD) was carried out by an independent consultant; it included the review of an information package supplied by the Company and site visits of railway sections. The environmental and social (E&S) risks and impacts associated with the Bank's participation in the Eurobond issuance for refinancing modernisation works (no Capex) are site-specific, readily identified and will be managed by the implementation of an Environmental and Social Action Plan (ESAP), which has been agreed with the Company and reflected in the Framework Agreement.


The Railway Modernisation Project, which consists of the rehabilitation and construction of 60 km of railways including a few tunnels and bridges, is covered by five Environmental Impact Assessment (EIA) packages and relevant permits (obtained between 2011 and 2020). As of April 2021, progress on the Modernisation Project stood at 96 per cent, with all major earthworks, tunnel construction and pile driving for bridges completed and track laying ongoing.


The results of the ESDD indicated that GR operates in line with the Georgian requirements; they will nevertheless be required to align their corporate E&S management systems with the Bank's Performance Requirements (PRs). GR has a management structure in place to ensure compliance with national regulations. They have an integrated management system which is well developed for Health, Safety and Environmental (HSE) issues, but needs to be reinforced on social and labour issues; the ESAP requires GR to recruit a Social expert.  Whilst a comprehensive Construction HSE Management Plan is in place and generally aligned with the PRs, due diligence found that construction contractors performance on HSE and labour issues requires improvement and address allegations of unsafe work practices and labour related grievances. ESDD revealed that the Company's labour-related policies and practices are not applied to contractors and there is a lack of formal oversight of contractor labour and health and safety practices. GR has contracted a supervisor to perform technical and engineering oversight of the construction works, including HSE supervision. An Environmental Monitoring Programme is in place but its implementation needs to be reinforced, as required in the ESAP.


Various human resources policy documents are in place, however these need to be formalised in an official Human Resources Policy and improved communication to GR and contractors' workers on relevant information regarding hours of work and rest, and overtime arrangements. Similarly, while a worker grievance mechanism is in place, this mechanism is not sufficiently formalised or documented. The Company employs over 12,000 people and nearly 60 per cent of the Company's workers are unionised. Whilst wage rates that are comparable to those in other industrial sectors in the country, an initiation of collective dispute  in 2019 led to an agreement on wages for all workers. The Company's internal procedures prohibit discrimination, however, only 17 per cent of the Company's employees are women. The Company is also lacking formal policies to manage Gender Based Violence and Harassment. The ESAP includes requirements to formalise a Human Resources Policy and a worker grievance mechanism, develop a Sexual Harassment Policy and implement a strategy and targets to increase the rate of female employment. Worker accommodations were found not to meet EBRD's standards or good international practice and do require improvement and monitoring. The ESAP includes measures to cascade human resources policies to non-employee workers and to implement effective oversight of contractor labour practices, starting with an independent audit of contractor labour practices (covenanted) and development of a corrective action plan.


Several environmental issues were identified during ESDD, all connected with hazardous materials and hazardous waste handling: Polychlorinated biphenyl (PCB)-containing equipment and oil, asbestos-containing materials (ACM) use, asbestos waste, waste sleepers with creosote and soils contaminated with oils (around and under railways). Respective corrective measures have been included in the ESAP, such as development of a Hazardous Waste Management Plan, update of PCB and ACM inventories, and reinforced water quality monitoring. No new asbestos materials are used in the reconstruction and new construction projects by GR.


There is an occupational safety and health (OHS) department with adequate resources and staff, who developed an OHS management system commensurate with the scale of GR's activities. Nevertheless, while several plans are in place to manage potential community health and safety impacts, ESDD revealed a low level of awareness of these plans amongst the workforce and uneven application at construction sites. The ESAP includes formalisation and implementation of a Community Health and Safety Management Plan and effective oversight of its implementation.


The majority of the land acquisition for the Railway Modernisation Project has been completed following the Company's procedures for land acquisition and the requirements of Georgian law, with compensation paid at market rates. Expropriated private land included 86 agricultural plots and 28 houses. ESDD included interviews with affected people who confirmed the sufficiency of compensation rates to build or purchase alternate housing, however there are a number of ongoing court cases related to the compensation offers. ESDD also revealed deficiencies in the resettlement process linked to the identification of vulnerable people as well as a lack of livelihoods restoration activities and monitoring.  The ESAP includes the requirement for a third party gap assessment of the resettlement process and the development and implementation of a corrective action plan. A covenant requires the corrective action plan to be agreed by GR and the Bank.


One of the tunnels of the Railway Modernisation Project is located 500m underneath the Borjomi-Kharagauli Emerald site (categorised IUCN Category II). The ESDD confirmed there were no works above ground within the Emerald site. An impact assessment prepared by GR in 2019 concluded that the impact on the protected site was expected to be negligible; this has nevertheless not been verified by field monitoring. The ESAP therefore requires GR to conduct biodiversity monitoring in this area, and to develop a Biodiversity Action Plan, if necessary.


The Railway Modernisation Project is not anticipated to have any material impacts on cultural heritage, however the ESAP includes development of a chance finds procedure. While ESDD found that the level of stakeholder engagement was appropriate for the nature and scale of the Project, there is a need for a formal Stakeholder Engagement Plan and community grievance mechanism. Development of these is included in the ESAP.

The Bank will monitor the environmental and social performance of the Company and the implementation of the ESAP, through a review of Annual Environmental and Social Reports (AESR), as well communications with the Company and site visits, as necessary.

Technical Cooperation and Grant Financing

The following technical co-operation ("TC") assignments are envisaged as part of this Project:

  • TC 1: Digitalisation Feasibility Study and Implementation Support. The estimated cost of the assignment is up to EUR 600,000, proposed to be financed by an international donor or the EBRD Shareholder Special Fund (the "SSF").
  • TC 2: Gender and Equal Opportunities Programme. The estimated cost of the assignment is up to EUR 140,000, proposed to be financed by the EBRD's Gender and Inclusion TC Framework, funded by the SSF.

Company Contact Information

Irine Khizanishvili
+995 32 219 95 73; +995 577 761 516
15, Tamar Mepe Ave, 0102, Tbilisi, Georgia

PSD last updated

25 Jun 2021

Understanding Transition

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

Business opportunities

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General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social 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 additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from 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 activities of the Bank 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 Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. 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 sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations following its entry into force on 1 January 2020. 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 (e.g. 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 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; how to submit a Request for review; or contact IPAM  via email to get guidance and more information on IPAM and how to submit a request.


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