The EU bank and ProCredit create a €10 million credit line for the recovery of SMEs from the COVID-19 pandemic in Georgia.
EIB and ProCredit Group agree on similar credit lines in Ukraine (€25 million) and Moldova (€20 million), bringing the total support to companies to €55 million
The operation is part of the Team Europe’s COVID-19 emergency response to help sustain jobs, maintain liquidity and operations, and fuel the economic recovery of the EU partner countries
The European Investment Bank, the lending arm of the European Union, will provide €10 million to the ProCredit Group to offer a new credit line for small and medium enterprises (SMEs) in Georgia and support their faster recovery from the COVID-19 pandemic. The credit line can be made available in multiple currencies, including in the local currency.
The investment is a part of a €55 million regional agreement with the ProCredit Group, which allows creation of similar credit lines at ProCredit Group banks in Ukraine (€25 million) and Moldova (€20 million), all in support of faster economic COVID-19 recovery of the EU partner countries in the Eastern Neighbourhood.
This transaction provides much-needed financing to companies in Georgia to address working capital issues created by the ongoing pandemic. The EIB loan also strengthens the national banking sector of Georgia and reinforces its ability to finance the economic recovery of the country.
EIB Vice-President Teresa Czerwińska, who is in charge of operations in Georgia, Moldova and Ukraine, said: “Team Europe continues to support economic recovery of EU partner countries in the Eastern Neighbourhood from COVID-19, reinforcing pan-European solidarity in these difficult times. We have thus created new sources of financing at a moment when such aid is crucial for the survival of our SMEs. We look forward to expanding our partnership in the future, so as to allow even more companies benefit from our shared dedication to support SMEs grow and develop.”
EU Ambassador to Georgia Carl Hartzell said: The EU stands by Georgia during the pandemic. The EU has mobilised an unprecedented GEL 1.5 billion COVID-19 support package for Georgia, of which economic recovery of businesses is a fundamental part. This top-up by the EU bank strengthens this component by providing more assistance via local Georgian banks. Thanks to this agreement, an additional number of Georgian small and medium businesses will be able to access finance to get them through these challenging times.
The management of ProCredit Holding AG & Co. KGaA, the parent company of the ProCredit group, said:
“Thanks to the well-established relationships with our clients and partners such as the EIB, we have been able to provide efficient support to numerous SMEs during these turbulent months. These EIB credit lines will support SMEs in Georgia, Moldova and Ukraine to overcome short-term liquidity shortages and will provide much-needed support in local currencies for their investment projects. We expect that this will open them up to new lines of business and opportunities and thus will support economic recovery in the coming years. We are confident that this will be stimulated by a structural shift towards investments that are climate-friendly as well as socially and ecologically sustainable.”
The management of ProCredit Bank Georgia said:
“The pandemic has been a big challenge for the economy of Georgia. Access to financial resources during this period is of especial importance for small and medium-sized enterprises operating in the country to manage to get over the difficulties caused by the crisis, grow and develop. The financial resources of EUR 10 million allocated to Georgia as part of the EIB credit line is a crucial support for local companies. With the resource, ProCredit Bank will be able to give financial support to more SMEs, and the consequences will definitely have a positive impact on the country's economy. We look at the future positively and believe that we will overcome the crisis by combined efforts and consecutive steps.”
Team Europe: Strengthening pan-European solidarity in times of crisis
The EIB investment is a part of Team Europe’s overall response to COVID-19 and supports the sustainable social and economic recovery of the EU’s Eastern Neighbourhood. The operation reinforces both SMEs and mid-caps, which are the backbone of national economies and a major source of employment in three countries.
Covered by guarantees from the European Union, the EIB investment enables the ProCredit Group to increase its lending activities without jeopardising the long-term stability of the local financial sectors or their ability to support the economic recovery from the pandemic in the long term.
The credit lines will be even more attractive due to the more flexible terms enabled by the EIB’s COVID-19 emergency measures. These emergency measures are a part of Team Europe’s efforts to support partner countries in the Eastern Neighbourhood during the pandemic.
Note to Editors:
About the EIB:
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
The EIB in the Eastern Neighbourhood:
Through our lending to countries in the Eastern Neighbourhood – Belarus, Ukraine, the Republic of Moldova, Azerbaijan, Armenia and Georgia – the European Investment Bank plays a vital role in building important social and economic infrastructure. Our projects develop the private sector and countries’ resilience to climate change. At the same time, our presence reinforces relations with the European Union and its Member States.
In the Eastern Neighbourhood region, the EIB focuses on creating quality jobs and fostering economic growth, developing industry and infrastructure, supporting innovation, and providing affordable and clean energy. Climate action, in line with the Paris Agreement, is a top priority throughout EIB lending activities. Through our financing, we act as a catalyst to attract the funding needed to meet the UN’s Sustainable Development Goals (SDGs) for 2030. For more information on EIB activities in the Eastern Neighbourhood, please follow this link.
About ProCredit Holding AG & Co. KGaA
ProCredit Holding AG & Co. KGaA, based in Frankfurt am Main, Germany, is the parent company of the development-oriented ProCredit group, which consists of commercial banks for small and medium enterprises (SMEs). In addition to its operational focus on South Eastern and Eastern Europe, the ProCredit group is also active in South America and Germany. The company’s shares are traded on the Prime Standard segment of the Frankfurt Stock Exchange. The anchor shareholders of ProCredit Holding AG & Co. KGaA include the strategic investors Zeitinger Invest and ProCredit Staff Invest (the investment vehicle for ProCredit staff), the Dutch DOEN Participaties BV, KfW Development Bank and IFC (part of the World Bank Group). As the group’s superordinated company according to the German Banking Act, ProCredit Holding AG & Co. KGaA is supervised on a consolidated level by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and the German Bundesbank. For additional information, visit: www.procredit-holding.com.
