FIF - EaP SMEC - Bank of Georgia

Location:

Georgia

Project number:

51739

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

13 Jul 2021

Status:

Signed

PSD disclosed:

21 Jul 2021

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Project Description

A five-year GEL denominated senior unsecured loan in amount of EUR 25 mln provided to Bank of Georgia ("BOG"), one of the largest systemic banks operating in Georgia. The project will further promote the Eastern Partnership  SME Competitiveness ("EaP SMEC") Programme, a successor to the DCFTA Programme, in which BoG actively participated since 2016.

Project Objectives

The proceeds of the Bank's investment will be on-lent by the bank in line with EaP SMEC Programme' Policy Statement to private sector sub-borrowers (MSMEs) in order to upgrade their technologies and equipment up to EU standards including for investments into sustainable technologies and promoting the use of green technologies, thereby enhancing MSMEs' competitiveness. At least 70% of the loan is expected to be GET-eligible, in line with the EaP SMEC programme terms.

Transition Impact

ETI score: 75

Competitive: The company will expand its MSME portfolio with a focus on financing priority investments complying with EU directive(s), ultimately facilitating competitiveness of Georgian MSMEs;
Resilient: the company is expected to maintain adequate MSME portfolio quality.

Client Information

BANK OF GEORGIA JSC

JSC Bank of Georgia (Moody's Ba2 and Fitch BB- with stable outlook) accounts for over one-third of the banking sector's assets and liabilities and is categorized as a systemic bank by the regulator.

EBRD Finance Summary

USD 29,451,250.00

Total Project Cost

USD 29,451,250.00

Additionality

Key sources of additionality under the project are (i) Innovative green finance structure (local currency denominated long-term facility) that integrates aspects such as climate and environmental, social and governance (ESG) standards and/or climate and ESG risk considerations into the financing structure, and (ii) Knowledge, innovation and capacity building (technical assistance under the Programme will support timely realisation of EU-compliant investments in Georgia). 

Environmental and Social Summary

Categorised FI (ESP 2019).  Bank of Georgia is a well known client to the Bank through a number of transactions, over a number of years.  BoG has a well-developed suite of policies and remains compliant with the Bank's key performance requiremetns and provides timely reporting on related topics. 

Technical Cooperation and Grant Financing

SME Competitiveness credit line will be completemented by grant funding (TC and non-TC) from the EU: MSME sub-borrowers will benefit from investment incentives (up to 10%/15% of the lower of disbursed amount or the investment cost, depending on type of sub-project) for eligible sub-loans, while BOG will receive technical assistance from dedicated consultants towards investment projects preparation and implementation.

Company Contact Information

Natia Kalandarishvili
ir@bog.ge
+995322444444
https://bankofgeorgiagroup.com/
29a Gagarini street, Tbilisi, Georgia

PSD last updated

21 Jul 2021

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 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 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 compliance@ebrd.com. 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 ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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