Project Description
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 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
The 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 and 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.
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Environmental and Social Policy (ESP)
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More information on the EBRD’s practices in this regard is set out in the ESP.
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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.
