Senior unsecured loan in the amount of up to USD 20 mln equivalent in GEL to be provided to TBC Bank to support investment financing for micro, small and medium sized enterprises ("MSMEs") in Georgia, and promote EU standards in the market under the Eastern Partnership SME Competitiveness ("EaP SMEC") Programme, a successor to the DCFTA Programme, for sustainable investments in technology and equipment.
The project will enable the bank to finance medium to long-term investments of Georgian MSMEs in upgrading their technology and equipment necessary to meet EU standards in terms of product quality, health and safety measures and environmental protection, enhancing their competitiveness locally and regionally. The Project aims to deliver at least 75% of sub-loans complying with EBRD Green Economy Transition (GET) approach.
ETI score: 75
Competitive: the programme will encourage SMEs' earlier adoption of, and compliance to higher, EU-level standards. It is also set to contribute to the technical capacity of TBC bank, and to provide business advice to SMEs in DCFTA-related areas.
Resilient: the programme fosters the resilience through maintaining adequate portfolio quality of partner financial institutions.
TBC BANK JSC
TBC Bank ("TBC") is a leading universal bank in Georgia holding more than one third of market share in total banking assets, loan and deposit portfolios in Georgia. It offers a wide range of services (including FX transactions, non-financial services to support business development, as well as leasing, brokerage and investment banking via its subsidiaries) to its retail, corporate and MSME clients through its wide distribution network of up to 160 branches and digital channels.
EBRD Finance Summary
Total Project Cost
Key sources of additionality under the project are:
(i) Financing structure that is not available in the market (medium to long term funding in local currency);
(ii) Innovative financing structure (green finance instrument that integrates climate and ESG considerations into the financing structure);
(iii) Knowledge, innovation and capacity building (technical assistance under the programme will support timely realisation of EU-compliant investments in Georgia); and
(iv) Use of EBRD expertise to achieve higher gender standards and/or equal opportunities action plans by introducing a gender-bias training for lending staff and the representatives from ESG Ambassadors, employees of ESG department, Credit Analysts and Risk Managers at TBC Bank.
Environmental and Social Summary
Categorised FI (ESP 2019). TBC bank is a long-standing client of EBRD and compliance with, and reporting on, the Bank requirements have been good in the context of the existing and previous projects.
Technical Cooperation and Grant Financing
The EaP SME Competitiveness sub-operation will be complemented by grant funding (TC and Non-TC) sourced from the EU through the Delegation Agreement between EBRD and the European Commission re SME Competitiveness Programme in Eastern Partnership:
(i) A project consultant under the EaP SMEC Programme will assist TBC with the implementation of the facility. A separate verification consultant (VC) will be engaged to verify the technical implementation of sub-projects before investment incentives are released to relevant MSMEs.
(ii) The project is supported by up to USD 2.88 million investment incentives to TBC's sub-borrowers, calculated for each sub-project as up to 15% of the lower of (i) the disbursed amount of the sub-loan, and (ii) the investment cost of the relevant sub-project, and
(iii) 50% of the senior unsecured loan will benefit from First Loss Risk Cover (FLRC) under the SME LCY programme provided by SME Local Currency Risk Sharing Special Fund.
Company Contact Information
+(995 32) 227 27 27
7 Marjanishvili St. Tbilisi, Georgia 0102
PSD last updated
04 Aug 2022
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