22.Sep .2020 20:13

EBRD has issued a loan for GOGC to refinance USD 250 million corporate Eurobond

EBRD has issued a loan for GOGC to refinance USD 250 million corporate Eurobond
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According to a statement issued by the European Bank for Reconstruction and Development, the EBRD will help the Georgian Oil and Gas Corporation to refinance $ 250 million worth of Eurobonds. The state-owned corporation issued 5-year Eurobonds in 2016 and their repayment period would have expired in April 2021. The securities were traded on the London Stock Exchange.

The EBRD said in a statement that the funding agreement was made in response to the economic shock caused by COVID-19. In addition, the financial package will support the planned reforms in the state company. These include the development of the natural gas exchange market. 

Project Description

The Project is a senior unsecured loan of EUR 217 million to JSC Georgian Oil and Gas Corporation ("GOGC" or the "Company"), a major Georgian electricity and natural gas supplier, to refinance a USD 250 million corporate Eurobond maturing in April 2021.

Project Objectives

The Project is a response to the COVID-19 pandemic which caused significant shocks on the financial markets and an economic downturn in Georgia. A comprehensive Technical Cooperation ("TC") package will encompass sector reform, corporate level improvements i focused on climate corporate governance and supporting the role of women in technical positions in the energy sector i as well as a TC to identify and quantify the investment requirements in the country to generate and transport green hydrogen as well as to upgrade the Company's assets to transport the blended hydrogen to end users domestically or regionally.

The loan will ease cash flow pressure and address liquidity constraints for the Company resulting from the significant economic turmoil caused by COVID-19 and the difficulty for the Company to access the capital markets.

The Bank will assist in the design and implementation of a gas exchange in Georgia. The project involves a comprehensive ESAP, entailing the addition of specific E&S functionality in the Company at the corporate level, and support for development of a strategic long-term roadmap. The Project also includes the development of an Equal Opportunities Action Plan ("EOAP").


GOGC is 100% owned by JSC Partnership Fund, a national investment fund owned 100% by the Government of Georgia. GOGC's principal activities are electricity generation and supply, natural gas supply, and the ownership and leasing of pipelines. GOGC owns and operates two CCPPs that together supply c.20% of Georgia's total electricity generation and act as a guaranteed source of electricity, to ensure the security and reliability of the electricity system in the country considering the high proportion of intermittent hydropower generation.

The loan proceeds will exclusively refinance an existing Eurobond, issued in 2016 on the London Stock Exchange.

EBRD offers essential financing that is currently not available in the market.

Conditionalities: The project involves a comprehensive TC package, as described above. Knowledge, innovation and capacity building: EBRD offers extensive capacity building support and will engage with the Company through the implementation of a corporate level ESAP to better align the Company with international best practices.