The European Bank for Reconstruction and Development (EBRD) supported Georgia’s economy to the tune of €218 million in 2022, with investments in healthcare, energy efficiency and financing for small and medium-sized enterprises (SMEs) through credit lines to local banks and trade financing. The Bank continued to focus on the private sector, which accounted for 91 per cent of its total investment in the country.
Catarina Bjorlin Hansen, EBRD Regional Director for the Caucasus, said: “In 2022 we helped our clients to build an inclusive, green and more digitalised economy. Our support included trade facilitation and the provision of funding to local enterprises, including through partner banks, with additional incentive grants from the European Union. We also invested in energy efficiency in schools and supported the healthcare sector while scaling up gender and inclusion activities, working with our clients to create access to jobs and services.”
Among the highlights in 2022 was the renovation of schools across the country. An EBRD loan of €40 million, a €13 million grant from the European Union (EU) and additional funding from KfW will be used to reduce energy consumption in schools, contributing to overall energy security and environmental protection, as well as improving the learning environment for and well-being of school children.
The Bank continued to promote capital markets development by investing €12 million in the first green bond listed in Georgia. It also launched a new capital markets instrument, AT1, with a leading partner bank. It was the first of its kind and an important product for the capital optimisation and diversification of the country’s financial markets, especially for foreign-exchange loss insulation to mitigate risks.
Trade in the region took a hit during the pandemic and following Russia’s invasion of Ukraine, so to strengthen economic resilience the EBRD provided its partner banks with liquidity to keep vital trade flows going. In Georgia alone the Bank supported €60 million worth of trade finance transactions under its Trade Facilitation Programme in partnership with three local partner banks.
For a sustainable and inclusive economy, small businesses need to thrive, so the EBRD increased SME support by providing €109 million in loans to commercial banks for on-lending to local businesses.
The Bank also provided business advice to local SMEs through 74 advisory and consultancy projects to help companies expand and improve their performance in times of crisis. It placed emphasis on women-led or women-owned companies, training women entrepreneurs and managers.
Two high tech start-ups were also helped in their drive to scale up and expand, thus enhancing the region’s entrepreneurial ecosystem.
The Bank continued to offer consultancy services designed to help local SMEs with digital transformation, along with regular advisory assistance and the Women in Business initiative funded by the European Union, South Korea and Sweden.
Complementing its investments, the EBRD continued to engage in policy dialogue. It played a key role in leading private and public-sector dialogue through the Investors Council platform. It also provided technical assistance, enabling the government to realise its digital, inclusive and green agenda.
The Bank also assisted the National Bank of Georgia (NBG) in developing legislation on covered bonds to enhance capital markets development.
In line with the Bank’s gender and inclusion strategies, the EBRD kept up efforts to promote gender inclusion in its projects, creating equal opportunities for men, women and the youth, especially in rural areas.
Overall, the EBRD’s green financing in Georgia hit a record 61 per cent of the Bank’s total investment volume in the country for 2022.
The cumulative number of Bank projects in Georgia reached 283, with overall investments to date of up to €5 billion and private-sector investment accounting for 81%.
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