- The €70 million EIB loan will make it easier for local businesses to access finance with attractive terms and conditions.
- €40 million of the loan will be allocated to green finance, whereas the remaining €30 million will be directed towards growth and innovation.
- A minimum of 30% is earmarked for initiatives promoting gender equality and empowering women.
- The loan is complemented by the Greening the Financial Systems technical assistance programme funded by the German government under the International Climate Initiative.
The European Investment Bank (EIB, the EU bank) has signed a €70 million loan agreement with TBC Bank to support small and medium-sized enterprises (SMEs) and mid-caps in Georgia.
€40 million of the loan will be allocated to green finance, whereas the remaining €30 million will be directed towards growth and innovation. A minimum of 30% is earmarked for initiatives promoting gender equality and empowering women, in line with the 2X Criteria, a backbone for gender-lens investing.
The loan is being provided by EIB Global (the arm of the EIB working beyond the European Union) and is expected to benefit more than 230 companies and sustain over 15 000 jobs. It is complemented by support under the Greening the Financial Systems technical assistance programme, funded by the German government’s International Climate Initiative.
The multicurrency 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. It will sustain a significant number of jobs and stimulate growth and employment. 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 Bank’s activities in Georgia, remarked: “The EIB is pleased to support Georgian SMEs with this innovative loan intermediated through one of Georgia's leading banks, TBC Bank. It is innovative because a substantial portion of the loan is specifically allocated to green and inclusive finance focusing on gender equality. The commitment to supporting small businesses, coupled with a strong focus on green and inclusive financing in very close cooperation with the European Union, aligns seamlessly with the priorities of the EIB.”
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 takes a sustainable and inclusive approach to ensuring access to finance and job creation. A more inclusive, greener economic sector is 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.”
Vakhtang Butskhrikidze, CEO of JSC TBC Bank, said: “We are proud to have built such a successful relationship with the EIB, spanning already over a decade. Completion of this benchmark transaction is another testament to the well-established, strong partnership between our organizations and our shared values to promote sustainable development of Georgian economy. The facility will enable TBC to continue supporting Georgian SMEs, by providing more affordable, long-term financing, aiming to stimulate economic growth and job creation. Moreover, the special focus on climate related investments and female entrepreneurs will improve the sustainable business environment in the country.”
Background information
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.
