To ease access to medium and long-term funding for Georgian enterprises, the EBRD is providing finance to two leading local banks. TBC Bank and Bank of Georgia (BOG) are attracting US$10mn each under a new EBRD co-financing facility that aims to meet growing demand in some of the bank’s poorer countries of operations.


In addition to providing long-term funds to the local banks for on-lending, the EBRD will also co-finance projects directly – taking direct risk on medium-sized Georgian enterprises by lending money alongside TBC or Bank of Georgia. This will allow borrowers to receive larger loans than the local banks have the capacity to provide on their own. Sub-loans made jointly by the banks and the EBRD to local clients will typically range from US$2mn to US$8mn, with a maturity of up to five years.


The financing will help TBC and BOG better serve the market and compete with banks that have a higher equity base, says Nikolay Hadjiyski, head of the EBRD’s resident office in Tbilisi. Such support will help sustain development of Georgia’s private sector and promote employment.


The EBRD’s Early Transition Countries (ETC) initiative, launched in 2004, aims to stimulate market activity in these countries by using a streamlined approach to financing more and smaller projects, mobilising more investment, and encouraging economic reform.


The EBRD has signed 22 projects in Georgia, totalling €
257mn, with about two-thirds in the private sector. Alongside EBRD funding, an additional €
1.4bn has been mobilised.