FIF - DCFTA Basis Bank Loan

Location:

Georgia

Project number:

51741

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

01 Dec 2020

Status:

Disbursing

PSD disclosed:

04 Dec 2020

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

Under the EU4BUSINESS credit line ("DCFTA") Basis bank will be able to finance SMEs who are aiming to upgrade their technology and equipment and align with the EU standards in terms of product quality, health and safety measures and environmental preservation. 

Project Objectives

The loan will enable Basis to maintain and expand longer-term lending to the good quality private Georgian MSMEs, in the time of pandemic and post crisis, hence complementing other crisis response measures undertaken by the Bank under the COVID-19 Solidarity Package.  

Transition Impact

ETI score: 75

Competitive: BB will expand its SME portfolio with a focus on financing DCFTA priority investments that result in compliance with at least one EU Directive(s), facilitating Georgian SME's increased competitiveness.

Resilient: The project aims to ensure prudent lending practices and adequate portfolio quality. 

 

Client Information

BASISBANK JSC

JSC Basis Bank ("BB"), Fitch rated (B+) is SME-focused bank ranked 5th by total assets and 6th by loan portfolio among 15 banks in Georgia, with 3.2% and 2.85% respective market shares as of 2Q 2020. BB is majority owned by Hualing Group (unrated) (91.2%) - one of the largest Chinese conglomerates engaged in diversified industries (real estate, foreign trade, livestock, logistics) and geographies. BB serves over 5000 business customers through its 24 branches across the country employing near 550 people.

EBRD Finance Summary

EUR 8,500,000.00

Total Project Cost

EUR 8,500,000.00

Additionality

Additionality stems from the financing structure of this transaction (longer term and conditions), and innovative structure of the product, that integrates aspects such as climate and environmental, social and governance (ESG) standards and/or climate and ESG risk considerations into the financing structure.  The sub-borrowers will receive advisory services from the Project Consultant on adapting EU directive in the most effective manner.

Environmental and Social Summary

Categorised FI (ESP 2019).  Basis Bank (BB) is an existing client of EBRD and has confirmed satisfactory compliance with the requirements of the EBRD's Performance Requirements 2, 4 and 9 through its annual reporting. BB has appropriate staffing and risk management procedures in place to cover the requirements of the DCFTA.

Technical Cooperation and Grant Financing

TC (under DCFTA Programme): EUR 7 million (under Phase 2, for Georgia, Moldova and Ukraine) to finance Project and Verification Consultants activities, i.e. support with the implementation, marketing and monitoring of the Programme and verification of the technical implementation before the incentive payments are released to the Basis Bank's sub-borrowers.

This project was approved in the context of the Bank's response to the COVID-19 pandemic. To avoid delays to the delivery of this project, the Bank's President granted a deviation from the ordinary timelines for PSD disclosure, as contemplated by Section V of the Directive on Access to Information. Details of the Bank's response to COVID-19, and this deviation, can be found on our website.

Company Contact Information

Ani Skhirtladze
Ani.Skhirtladze@basisbank.ge
https://www.basisbank.ge/

PSD last updated

04 Dec 2020

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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