The FINANCIAL — The Asian Development Bank (ADB) announced an investment of up to $20 million in green bonds to be issued by Georgia Global Utilities JSC (GGU), with proceeds to upgrade water supply and sanitation in Tbilisi and nearby municipalities, and to refinance debt of renewable energy and water operations. ADB will also administer a further investment of up to $20 million in the bonds by Leading Asia’s Private Infrastructure Fund (LEAP).
GGU is a holding company with two major business lines involving renewable energy and water supply and sanitation, the latter operated primarily through its subsidiary Georgian Water and Power LLC, which is the largest privately-owned utility company in Georgia, serving around 1.4 million customers, as reported by local media agenda.ge
GGU is a wholly owned subsidiary of JSC Georgia Capital, which is 100%-owned by Georgia Capital PLC, a London Stock Exchange listed entity. A substantial part of ADB’s subscription will be earmarked for capital expenditure in connection with GGU ’s water supply and sanition business in Georgia, providing the company with short and medium-term capital to upgrade the water and sanitation network and supply sustainable and affordable water to consumers.
ADB will also administer a further investment of up to $20 million in the bonds by Leading Asia’s Private Infrastructure Fund (LEAP). LEAP was established in 2016 with a $1.5 billion capital commitment from the Japan International Cooperation Agency. It is focused on delivering high quality and sustainable private sector infrastructure projects that reduce carbon emissions, improve energy efficiency, and offer accessible and affordable health care, education, and communication services to ADB’s developing member countries.
The investments form part of a $250 million issue by GGU of 5-year green bonds—Georgia’s first green bond issuance—that will be listed on the Global Exchange Market of the Irish Stock Exchange.
“ADB’s assistance will help ensure that communities in and around Tbilisi are supplied with water 24 hours per day, and that water supply and sanitation systems in those urban centers function properly,” said Director of Infrastructure Finance, South Asia, Central Asia, and West Asia at ADB’s Private Sector Operations Department Shantanu Chakraborty.
Shantanu Chakraborty also thinks that, ADB’s anchor investment will demonstrate to potential investors the compelling investment opportunities in financing water and clean energy initiatives in Georgia’s private sector.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
In June of 2020, ADB has approved a $100 million loan to help the Government of Georgia contain the spread of the novel coronavirus disease (COVID-19) pandemic, mitigate the impact on businesses, and protect the livelihoods of the most vulnerable, including women and children.
Also, earlier this month, The Asian Infrastructure Investment Bank approved EUR45 million loan to Georgia to mitigate the impacts of the novel coronavirus. The loan provides emergency budgetary support to enable the Government of Georgia to respond to the pandemic more effectively. The financing will enhance inclusive growth and competitiveness, invest in human capital and build resilience by improving connectivity and integration. Read more.