The European Investment Bank (EIB) is lending EUR 40 million to Bank of Georgia, the country’s largest bank, to finance investment projects promoted by SMEs and midcap companies.
The EIB loan will support the implementation of projects important for the development of Georgia’s private sector as well as undertakings in the areas of social and economic infrastructure, climate change mitigation and adaptation. As a result, the operation is expected to contribute to job creation and maintenance.
EIB Vice-President Wilhelm Molterer, stated: “A well-developed and robust SME sector is crucial for economic growth and employment. This EIB loan, like similar loans the EIB has extended across the Eastern Partnership countries, will facilitate access to finance for the most vulnerable group of companies – SMEs and midcaps.”
“We are very pleased to start cooperation with the European Investment Bank, especially in the light of Georgia’s increasing economic and political ties with the EU, which has become the country’s largest trading partner. The euro’s influence on the lari has significantly increased in recent years, with the lari effectively becoming a euro proxy, as a result of which we are now focused on raising euro funding and trying to shift US dollar loans into euros. This EUR 40 million loan, earmarked for financing our micro and SME customers, will enable us to further increase our competitiveness in the sector and support growth and job creation” said Irakli Gilauri, CEO of Bank of Georgia.
The operation brings the volume of signatures for the benefit of SMEs and midcaps in Georgia to EUR 150 million. Total EIB lending commitments in Georgia amount to EUR 530 million and concern a number of other priority sectors including transport, water and energy as well as support for SMEs and midcaps.
The EIB – the European Union’s bank – finances projects in Georgia on the basis of an EU mandate for the countries of the Eastern Neighbourhood, the so-called External Lending Mandate (ELM). The 2014-2020 ELM allows for a total amount of Bank financing in the Eastern Neighbourhood of EUR 4.8 billion to support projects of significant interest to both the EU and its Eastern Neighbours in the areas of local private sector development, social and economic infrastructure and climate change. In addition, the Bank has set up a EUR 3 billion own-risk Neighbourhood Finance Facility to enhance its support for the Neighbourhood Countries.
The EIB is committed to stepping up its support for Georgia following the signature in June 2014 of the EU and Georgia Association Agreement, which includes a Deep and Comprehensive Free Trade Agreement (AA/DCFTA). This Agreement significantly deepens political and economic ties with the EU in the framework of the Eastern Partnership.
Bank of Georgia is the leading Georgian bank in terms of total assets (35.5% market share), total loans (34.9% market share) and client deposits (31.5% market share) as at 31 December 2014. All data is based on standalone financial information filed by banks in Georgia with the National Bank of Georgia and includes Privatbank’s market shares. The Bank offers a broad range of corporate banking, retail banking, wealth management, brokerage and insurance and healthcare services to its clients. As at 31 December 2014, it served approximately 1.5 million client accounts through one of the largest distribution networks in Georgia, with 219 branches, the country’s largest ATM network, comprising 523 ATMs, 2 239 Express pay (self-service) terminals and a full-service remote banking platform and a modern call centre.