The FINANCIAL — BasisBank, with the assistance of EBRD, is offering Georgian businesses and legal entities the chance to borrow ‘Energocredit’ with a competitive interest rate, get free technical assistance and get 10-15% cash back. Awareness of businesses on cutting energy spending and developing new projects with the sum of money saved, makes the management of BasisBank optimistic that the new offer will receive high interest from customers.
“Money saved in business means new investments, an opportunity to launch new projects and create new workplaces,” said David Tsaava, CEO at BasisBank, while explaining the importance of Energocredit for businesses.
Energocredit offers a triple benefit to customers of BasisBank: 10 to 15% cash back on investments in energy efficient equipment and refurbishment; tailor-made advice of international experts on energy-saving possibilities; and a loan package for investments in energy efficiency with the best conditions.
“Energy efficient projects are in the interest of our country. The project that we have launched is very attractive for customers. The advantages include accessible credit for individuals as well as legal entities. Also, energy audits by world leading audit companies are also offered to our customers. They will deliver information to customers on what needs to be changed in their businesses in order to reduce energy expenditure. This service is absolutely free of charge. The third big advantage of our project is 10-15% subsidies. So, customers receive a credit line with competitive conditions; get consultations without any extra charge, and 10% subsidies from EBRD. All of these elements combine to make our offer very interesting for customers,” Tsaava told The FINANCIAL.
Energocredit is a dedicated programme of the European Bank for Reconstruction and Development (EBRD) aimed at supporting the development of sustainable energy projects in Georgia, Armenia and Azerbaijan. Through Energocredit, the EBRD provides USD 125 million to local financial institutions in the Caucasus region, for on-lending to both local businesses and individuals implementing energy efficiency measures and renewable energy projects. With these funds, the programme aims to enhance awareness of energy efficiency and to transfer skills to local financial institutions in sustainable energy lending.
According to Irakli Mekvabishvili, Chief Banker, out of the total USD 125 million, the largest share – USD 70 million – has been acquired by Georgia. “The figure shows the high importance of energy efficiency projects among Georgian businesses,” said Mekvabishvili.
In 2015 EBRD granted BasisBank a line of credit of USD 6 million for energy efficiency investments under the Caucasus Energy Efficiency Programme, Energocredit. Out of this amount, BasisBank has already issued USD 3 million. Manufacturing and construction are the top sectors that have adopted energy efficiency in their businesses. As Tsaava said, in general, the demand is equal from various business directions. “On its side, the Bank is cooperating with all of them,” Tsaava added.
“It is important that our offer is not targeting the implementation of new directions. It is affordable for companies that have decided on rearmament or even repairs and want to implement energy cost saving systems,” said Tsaava.
Interest rates on Energocredit will vary in line with the business sector. In Tsaava’s words, despite all of the above-mentioned advantages that the project offers, the Bank has competitive interest rates on loans.
According to Tsaava, BasisBank is the fastest growing bank on the market. The average growth rate of the Bank annually is around 40-45%. “There is a niche on the market where it is possible to continue crediting with lower risks. Accordingly, we are optimistic that we will manage to attract the segment which is interested in the implementation of energy efficient systems.”
The credit portfolio of the Bank in 2015 totalled over GEL 570 million. With over 70%, small and medium-sized businesses make up the largest part of its credit portfolio. The Bank did not have any significant increase of overdue loans in 2015. “The procedures implemented and experience that we have gained is the main contributor to these results,” Tsaava explained.
“A stable environment will be very important for our country. It will contribute to attracting investments. FDI will remain of key significance to our country in 2016. Foreign investments support the foundation of new businesses. We are closely watching the situation in our neighbour countries; changes in oil prices have an impact on crude producers which have been the main investors in Georgia during recent years. However, there are also Asian countries expressing an interest in investing in Georgia,” Tsaava told The FINANCIAL.