MCFF - Bank Republic Full Recourse

Location:

Georgia

Project number:

39353

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Target board date:

22 Jul 2008

Status:

Complete

PSD disclosed:

29 Jun 2008

Project Description

Medium Sized Co-financing Facility (“MCFF”) of USD 20 million, of which a USD 10 million loan with the full recourse to Bank Republic and USD 10 million Bank’s risk participation in Bank Republic’s loans with maturity up to 8 years. The MCFF will be used to provide medium- to long-term financing to Georgian private companies, clients of Bank Republic, to meet their requirements for larger loans. The EBRD will finance sub-loans which cannot be financed by the bank due to internal or regulatory risk diversification guidelines or policies.

Transition Impact

C) The MCFF facility will help BR to ensure its prudent portfolio concentration and risk diversification and will enable it to support the longer-term financing needs of its clients. It will contribute to build up expertise among the bank’s staff and sub-borrowers through training and project preparation. The facility will also help Bank Republic to apply higher requirements to clients’ corporate governance and business standards in line with the Bank’s policy and practice and send a signal to the local private sector that observing these standards will facilitate access to finance.

The Client

Bank Republic is a subsidiary of Societe Generale, one of the leading financial services companies in Europe. It is a universal commercial bank, ranking fourth in Georgia by total assets (USD 316 million as of 31 December 2007).

EBRD Finance

Medium Sized Co-financing Facility of USD 20 million, of which a USD 10 million loan with the full recourse to Bank Republic and USD 10 million for the Bank’s risk participation in Bank Republic’s loans

Project Cost

USD 65 million.

Environmental Impact

Screened FI. Bank Republic has recently developed and adopted its own Risk Management Procedure, which also covers management of environmental risks. After the inclusion in EBRD’s partner banks list the bank undertook implementation of EBRD’s Environmental Procedures, including compliance with the FI Environmental Exclusion and Referral Lists. In January 2006 and February 2008 Bank Republic staff participated in the Environmental and Social Risk Management training programme organised by the Bank’s Environment and Sustainability Department. Bank Republic complies with all national health, safety and environmental standards as well as with national employment laws and standards. Bank Republic will also comply with relevant Environmental Procedures within respective EBRD transactions and submit an Annual Environmental Report to EBRD.

Technical Cooperation

The Energy Efficiency credit line will be complemented by grant funding to engage consultants in order to prepare energy audits, review investment proposals, support companies in securing funding from BR and provide implementation support. The budget for the framework assignment is USD 2,398,000 funded by ETC, UK- DFID SEI Fund and CIDE-EBRD 2006/09 Fund.

Company Contact

Giorgi Kerkadze, IFI Relationship Manager
Bank Republic
2 Gr. Abashidze St,
0179 Tbilisi, Georgia

Telephone: +995 32 925555
E-mail: Giorgi.Kerkadze@republic.ge

 

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