Project Description
Up to USD 2 million, local currency denominated, three year SME Competitiveness (SMEC) loan to Credo Bank Georgia.
Project Objectives
This will be the first SMEC transaction for Credo which will introduce a new PFI to this important framework. Through the SMEC credit line and accompanying financial and advisory support under this framework, Credo will prompt MSEs transition to improved standards largely in line with EU directives, also promoting green transformation in regions and peri-urban areas (often lagging behind due to lower disposable liquidity and price pressure associated with a more advanced equipment/technologies) with focus on green technologies, aiming to achieve 70% Green Economy Transition ("GET") under the Programme. The project includes TC and non-TC investment grants (cashback incentives) which will help Georgian MSMEs to adopt competitiveness-enhancing EU standards and technologies that are greener and more advanced than prevailing alternatives on the local market while Credo will benefit from the TC assistance provided by the dedicated EaP SMEC Programme consultants for investment projects' preparation and implementation.
Transition Impact
ETI score: 75
The project contributes to the objectives and structure of the EaP SMEC Programme under FIF, supporting Competitive and Resilient transition qualities and contributing to the TI benchmarks, which will be monitored at sub-operation level and reviewed at the aggregated Programme level mid-way and at the end of the implementation period. The Programme's aim is to help MSMEs to upgrade their activities in order to align with EU standards, which often suggests upgrade of outdated processes and equipment by investing in technologies and practices that correspond with the Bank's Green Economy Transition approach ("GET"). At least 70% proceeds under the Programme will be allocated into GET-eligible technologies resulting in energy savings and CO2 emission reductions.
Client Information
CREDO BANK JSC
Credo Bank ("Credo", "the bank") is a commercial bank operating in Georgia catering financial needs of micro and small entities, and slowly penetrating into medium enterprises segment. Ranked the 5th largest in the Georgian banking sector and accounting for 3% of the banking assets, Credo is owned by social impact investors, Access Holding (51.2%), Proparco (15%), ResponsAbility (17%) and Triodos Doen (16.8%).
EBRD Finance Summary
USD 2,000,000.00
Total Project Cost
USD 2,000,000.00
Additionality
- Financing Structure: EBRD offers local currency financing on terms not readily available in the market.
- Standard setting: helping projects and clients achieve higher standards. Client seeks/makes use of EBRD expertise on higher financial standards, including through financial covenants.
- Financing Structure: EBRD offers an innovative green finance instrument that integrates aspects such as climate and environmental, social and governance (ESG) standards and/or climate and ESG risk considerations into the financing structure.
Environmental and Social Summary
Categorised FI (ESP 2019). Credo Bank is a current client of EBRD and E&S performance to date in the context of existing projects has been good. Credo Bank has developed, and put into operation, a suite of policy and procedural documents including an Environmental and Social Performance Policy (including an E&S Exclusion List), a Code of Ethics and Business Conduct and two processes for receipt of grievances. Together, these and other internal systems, cover the requirements of EBRD Performance Requirements for Labour and Working Conditions, Health, Safety and Security as well as for Financial Intermediaries. Beneficiaries financed through the SMEC Facility will be required to comply with national and EU requirements for environment, health and safety and labour and any relevant eligibility criteria for renewable energy projects. Should EBRD finance be provided to solar sub-projects, such sub-projects will be managed in line with 'The Proposed Management Approach for Solar Supply Chain Risk Management' (CS/FO/21-35, CS/FO/21-35 (Add 2)) and any subsequent guidance developed under that approach. Credo Bank should continue to provided annual E&S reporting to the Bank on the implementation of systems for E&S management and on compliance with the Bank's E&S requirements.
Technical Cooperation and Grant Financing
TC: Project and Verification consultants (covered by the EaP SMEC framework regional budget). A project consultant (PC) under the EaP SMEC Programme will assist the PFI 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. TC funds from the EU have been contracted for the regional EaP SMEC Programme from which this project with the PFI will be supported.
Non-TC: The project is supported by investment incentives for up to 15% of the loan amount. The investment incentives are funded by the EU.
Company Contact Information
Nana Tughushi
ntughushi@credo.ge
0322424242
https://credobank.ge/en/
R.Tabukashvili street 27, Tbilisi, Georgia
Implementation summary
PSD last updated
06 Dec 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)
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.
