Georgian Agricultural Finance Facility

Location:

Georgia

Project number:

42870

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Target board date:

26 Jul 2011

Status:

Complete

PSD disclosed:

17 Jun 2011

Project Description

The EBRD is considering financing the Georgian Agricultural Finance Facility (GAFF), which is planned to provide credit lines to Financial Intermediaries (FI) in Georgia for on-lending to farmers and other agricultural entities.

This will be a joint initiative with KfW and it has been designed with two main objectives: (i) to support the regeneration of Georgia’s agricultural sector through providing much needed finance for primary agriculture and small and medium size agribusiness companies, and (ii) to support local banks to develop special skills and procedures suited to agri-lending, diversify loan portfolios and re-start lending to the real economy in the aftermath of the August 2008 conflict and global financial crisis. Lending will be accompanied by intensive technical assistance to participating FIs to introduce sound lending and risk management policies and procedures tailored to agri-lending.

Transition Impact

When approved by the EBRD’s Board of Directors, the facility will be expected to have the following transition impact: i) supporting increased access to bank finance for primary agriculture and MSME agribusinesses in Georgia, which is currently very low; ii) developing sector specific expertise and skills in the banking sector related to risk management policies and procedures tailored to agri-lending that would enable sustainable financing to be provided along the value chain; and iii) promoting best practices and sustainable farming methods in primary agriculture through TC-financed sector specialists’ support which in turn would help the development of a more sustainable bank financing to agriculture.

The proposed Facility is also an important continuation of the Bank’s engagement with financial institutions in Georgia.

The Client

Existing partner FIs.

EBRD Finance

The EBRD is considering providing a €40 million loan.

It is expected the Bank will enter separate loan agreements with partner FIs, with amounts determined on a case-by-case basis.

Project Cost

N/A

Environmental Impact

Categorised FI. Some of the potential partner banks are existing clients of the Bank and have underwent special training on the environmental and social risk management by independent international consultants mobilised by the Bank.

Existing partner banks have adequate required procedures in place or are in the process of developing them based on the action plans prepared by consultants. Any new partner banks will need to adopt and implement environmental and social risk management procedures in line with PR9 and comply with PR2 inclusive of a grievance mechanism for employees.

Technical Cooperation

The accompanying technical assistance will be funded by the EU Neighbourhood Investment Facility.

The overall objectives of this assignment are to develop sustainable agri-lending in FIs and to assist in strengthening agricultural value chains. Increased credit to Agriculture will be achieved through the introduction of sound lending policies and procedures tailored to agricultural lending within FIs. Rebuilding value chains will take place through fostering coordination among farmers and restructuring and rebuilding of linkages between agri-businesses and farmers / other sub-borrowers. The consultants will conduct a series of training seminars for all FIs (and other stakeholders as appropriate) as the main delivery mechanism. To enhance sustainability, other stakeholders may include: Ministry of Agriculture (MoF), Georgian State Agricultural University, Bank Training Centre and Farm Service Centres. The consultants will be available to provide individual "consultations" to FIs seeking to develop specific value chain finance products.

Company Contact

Sabina Dziurman, Senior Banker, EBRD, dziurmans@ebrd.com, +44 207 338 7730.
Thea Jokhadze, Head of Funding, Bank of Georgia, tjokhadze@bog.ge, +995 32 244 44 44.
Tamuna Kakulia, Vice President, TBC Bank, tkakulia@tbcbank.com.ge, +995 32 227 2727 (*1171).
Sasha Ternes, Director, s.ternes@procreditbank.ge. +995 32 220 22 22 (*1130).

Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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