IFC Anchors $300 Million Green Bond Issuance to Upgrade Water Infrastructure in Georgia

Georgia faces significant challenges in delivering quality potable water due to aging infrastructure with high leakage rates—nearly 70% in some areas.

The International Finance Corporation (IFC) is leading a $300 million green bond issuance by Georgia Global Utilities (GGU) with a $40 million subscription. This initiative, the largest green bond issuance by a Georgian private company, aims to overhaul outdated water infrastructure and expand the water network, benefiting 1.3 million people—about 35% of Georgia's population.

Georgia faces significant challenges in delivering quality potable water due to aging infrastructure with high leakage rates—nearly 70% in some areas. This green bond issuance is designed to address these issues by financing critical upgrades.

Georgia Global Utilities, the largest privately-owned water supply and wastewater utility company in Georgia, serves Tbilisi, Rustavi, and Mtskheta. Acquired by Aqualia in 2022, GGU is set to use the bond proceeds to refinance existing loans and fund green capital projects. These projects will reduce water losses, enhance energy efficiency, and connect approximately 40,000 new customers to the water network by 2028.

The bond will be listed on the Euronext Dublin exchange, with participation from the European Bank for Reconstruction and Development, Asian Development Bank, and German development finance institution DEG.

Aqualia's Chief Financial Officer, Isidoro Marbán, highlighted the bond's impact: "This issuance will improve Georgians' access to reliable water and help adapt the country to climate change. Our collaboration with IFC sets a positive precedent for future partnerships in mutually beneficial regions."

Despite some reforms, Georgia's domestic capital market remains limited, with corporate bond issuances totaling only $800 million in 2023. The green bond aims to attract international investors and showcase the potential of sustainable capital market instruments.

Ivana Fernandes Duarte, IFC's Regional Manager for the South Caucasus, emphasized the significance of the investment: "Upgrading infrastructure is vital for improving water utility services in Georgia. IFC's involvement in this green bond aligns with our commitment to mobilize capital for climate-friendly projects, fostering sustainable growth and enhancing essential services for underserved communities."

Since 1995, IFC has provided approximately $2 billion in long-term financing to Georgia, including nearly $1 billion mobilized from partners, across 62 projects in sectors such as financial services, agribusiness, manufacturing, and infrastructure. IFC has also supported over $394 million in trade through its trade finance program and implemented advisory projects to bolster private sector development.