European Investment Bank and Bank of Georgia Partner to Boost Green Investments and SME Growth with €50 Million Loan

European Investment Bank and Bank of Georgia Partner to Boost Green Investments and SME Growth with €50 Million Loan

(IN BRIEF) The European Investment Bank (EIB) has inked a €50 million loan agreement with the Bank of Georgia, aimed at supporting small and medium-sized enterprises (SMEs) and mid-cap companies, while also promoting sustainable economic recovery and growth. Notably, a minimum of 30% of the loan will be directed towards green investments, marking a thematic dedication in the partnership. This collaboration, the first of its kind between the EIB and Bank of Georgia, is bolstered by support from the Greening the Financial Systems technical assistance program, funded by the German government’s International Climate Initiative. The loan program, provided by EIB Global, is expected to benefit over 160 companies, sustain over 14,000 jobs, and contribute to the economic recovery efforts outlined in the European Union’s Economic and Investment Plan for the Eastern Partnership.

(PRESS RELEASE) LUXEMBOURG, 30-Dec-2023— /EuropaWire/ — The European Investment Bank (EIB, the EU bank) has signed a €50 million loan agreement with Bank of Georgia to support small and medium-sized enterprises (SMEs) and mid-caps, thus contributing to sustainable economic recovery and growth.

Under the agreement, the EIB and Bank of Georgia will direct a minimum of 30% of the loan towards green investments. It is the first EIB loan intermediated by Bank of Georgia with such a thematic dedication. The loan is complemented by support under the Greening the Financial Systems technical assistance programme, funded by the German government’s International Climate Initiative.

The loan is being provided by EIB Global (the arm of the EIB working beyond the European Union) and is the first tranche of a €120 million EIB loan programme that is expected to benefit more than 160 companies and sustain over 14 000 jobs. Bank of Georgia will double the EIB commitment by lending an equivalent amount of its own resources.

The loan will improve access to finance with long-term funding on attractive terms and conditions, with the option to make such funding available in local currency to help businesses avoid exchange rate risks. The loan contributes to sustainable economic recovery under the European Union’s flagship Economic and Investment Plan (EIP) for the Eastern Partnership, which aims to help 80 000 SMEs. The operation forms part of the EIB’s own-risk contribution to the objectives of the European Fund for Sustainable Development Plus (EFSD+).

EIB Vice-President Teresa Czerwińska, responsible for the EIB activities in Georgia, remarked: “We are pleased to partner with Bank of Georgia, one of Georgia’s leading banks and the European Union to support small businesses, which form the backbone of the economy. The loan, with a significant portion dedicated to green finance, underscores our commitment to fostering green growth in Georgia as Team Europe.”

European Union Ambassador to Georgia Paweł Herczyński said, “The EU’s Economic and Investment Plan for the Eastern Partnership is the backbone of EU-Georgia cooperation for the years to come. It sets ambitious targets and identifies important flagship initiatives including our support to 80,000 Georgian SMEs. The EU is pleased to support today’s loan agreement, which promotes green investments, as well as economic growth and job creation. The supported investments are crucial for the development and resilience of Georgia’s economy and society. Working on these EU priorities –a more inclusive, greener economy– will help Georgia on its EU path.”

Archil Gachechiladze, Bank of Georgia CEO commented: “We greatly appreciate EIB’s ongoing support for Bank of Georgia and Georgian businesses. This transaction, with a specific focus on green investments, is another important step towards the sustainable development of the local economy. Georgia has recently gained EU candidate status – a key milestone that will further improve business confidence, and in this context, the ongoing support from our partner IFIs is very important. We look forward to celebrating many more successful deals with EIB going forward.”

About the EIB and EIB Global

The European Investment Bank (EIB) is the long-term financing institution of the European Union, owned by its Member States. It provides long-term finance for sound investments in pursuit of EU policy goals, supporting projects in four priority areas: infrastructure, innovation, climate and environment, and SMEs.

EIB Global is the EIB Group’s specialised arm devoted to increasing the impact of international partnerships and development finance, contributing to the three overarching priorities of the European Union: the European Green Deal, the Global Gateway and jobs, and sustainable and inclusive growth. Within Team Europe, EIB Global fosters strong, focused partnerships alongside fellow development finance institutions and civil society in close cooperation with other multilateral development banks. EIB Global brings the EIB Group closer to local people, companies and institutions through our offices around the world.

About the EIB in Georgia

The EIB has been working to support economic and social development in Georgia since 2007. The EIB’s commitment exceeds €2 billion and is distributed across various sectors, including infrastructure, green energy, water and wastewater, and small and medium-sized enterprises (SMEs). The Bank operates in line with the European Neighbourhood Policy (ENP), the Eastern Partnership (EaP) and other EU bilateral agreements.

The EIB is one of the key institutional lenders to the Georgian financial sector in support of SMEs. Over €400 million of EIB operations in the country are for SME finance, and it is currently working with seven financial intermediaries. The EIB was ready to step up support for businesses when it was most needed, providing over €160 million in financing on special terms and conditions to cushion the economic impact of the COVID-19 pandemic. The EIB also operates two partial portfolio guarantee programmes in Georgia whose aim is to share the risk of lending to eligible SMEs with the intermediaries, in partnership with the European Investment Fund (EIF). The EIB Group portfolio guarantees cover over €380 million in SME loans. Five technical assistance operations have been implemented over the last two years to improve the capacity of intermediaries, and a new generation of technical assistance operations is about to be launched.

About the EIB’s Greening Financial Systems technical assistance programme

The technical assistance complementing the loan is being provided under the EIB Greening Financial Systems technical assistance programme, which is funded by the International Climate Initiative Fund (IKI) on behalf of the German Federal Ministry of Economic Affairs and Climate Action (“BMWK”). The programme is a joint contribution from BMWK and the EIB to the work of the NDC Partnership, specifically the “Readiness Support for Greening Central Banks” initiative.

Media Contact:

Begum Iman
b.iman@eib.org
+352 4379 – 85212

Press Office

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SOURCE: European Investment Bank