EIB signs €50M loan with Bank of Georgia to support SMEs and mid-caps

Bank of Georgia will double the EIB commitment by lending an equivalent amount of its own resources.

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.”