European Union External Action

European Union, EBRD and TBC Bank to help Georgian companies grasp new trade opportunities

The EBRD is extending a loan of US$ 100 million equivalent in the local currency lari to TBC Bank to support the development of local SMEs. This package will be split with an equivalent to local currency of up to US$ 60 million to help businesses converge with EU standards and take advantage of the free trade opportunities with the EU; an additional equivalent of up to US$ 20 million for SME finance to help the development of the private sector; and an equivalent of up to US$ 20 million to support businesses managed or owned by female entrepreneurs.  The funds will be on-lent to private sector clients by TBC Bank.

EU’s contribution of EUR 19 million (approx. GEL 50 million) is aimed to enable EBRD’s credit lines for SMEs to help afford DCFTA-related investments through access to investment grants; improve the terms of financing that SMEs can get from local banks and enhance the willingness and ability of local banks to accept the risk related to SME lending.

EU supports private sector development in Georgia through its EU4Business initiative, which helps SMEs to benefit from the DCFTA by improving the business environment, increasing knowledge and skills of businesses and by supporting SMEs to get better access to finance. The EU4Business-EBRD credit line is a joint EU-EBRD initiative to help SMEs finance investments. EU and EBRD works together for private sector development in Eastern Partnership countries, notably with the Small Business Support programme, with EU contribution of EUR 18 million (GEL 48 million), as well as the Women in Business programme with EU contribution of EUR 5 million (GEL 13 million).

The EBRD’s finance to support female entrepreneurs is also supported by Sweden and the Early Transition Countries Fund*.

Bruno Balvanera, EBRD Director for the Caucasus, Moldova and Belarus, said:

We are pleased to expand our support to small entrepreneurs in Georgia. The DCFTA is an agreement that will shape Georgia’s future. The financing facility, which we launched today, will drive and motivate local businesses to take one step further and become more competitive on regional markets. We would like to express our gratitude to our long standing partner the European Union for the cooperation in areas of critically importance for the development of Georgia.

 

 

Janos Herman, Ambassador of the European Union to Georgia, said:

SME development is crucial for job creation and economic growth. We are therefore glad to extend cooperation with the TBC Bank, so that more Georgian SMEs can benefit from free trade opportunities with the European Union. Access to finance in local currency is a much-needed step in this direction and EU grant contribution will allow for affordable investments to bring production in line with EU standards.

 

“We are happy to be continuing our partnership with the EBRD [and the EU]. Long-term local currency financing is extremely important for the Georgian financial sector and we are proud to be the beneficiaries of such a complex transaction. This credit line will help TBC Bank to strengthen our leading role in the Georgian market,” said Vakhtang Butskhrikidze, TBC Bank CEO.

Since 2011 the EU has also provided funding to the EBRD’s Advice for Small Business services to boost the know-how of entrepreneurs seeking to grow their businesses in the European Neighbourhood region. The EU supports the advisory programme and the new credit line to TBC Bank under its EU4Business initiative, which helps SME development in Eastern Partnership countries.

With its local presence and 25 years of experience in working to develop the private sector in Georgia, the EBRD is in a strong position to successfully promote this new loan. The EBRD is the largest institutional investor in Georgia and to date has invested over €3 billion in the country.

*The Early Transition Countries Fund is supported by Canada, Finland, Germany, Ireland, Japan, Korea, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Taipei China and the United Kingdom.

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