Georgia: GEO: PROPOSED SENIOR LOAN TO BANK OF GEORGIA

Nonsovereign Project | 44923-014

Summary

The transaction provides a US dollar-denominated senior loan of up to $50 million to the BoG for up to 5 years, the proceeds of which will be onlent to small and medium-sized enterprises (SME) in Georgia.

Latest Project Documents

Consulting Notices

See also: CMS

No notices are currently available for this project.


Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Project Name GEO: PROPOSED SENIOR LOAN TO BANK OF GEORGIA
Project Number 44923-014
Borrower/Company BANK OF GEORGIA
Country Georgia
Location Georgia
Approval Number 7315/2690
Type or Modality of Assistance
7315/2690 Loan USD 50.00 million Committed
Strategic Agendas
Drivers of Change
Sector / Subsector Finance - Banking systems and nonbank financial institutions
Gender Equity and Mainstreaming
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Portfolio Management Division, PSOD
Responsible ADB Officer Stefan Hruschka
Project Sponsor(s)
Description The transaction provides a US dollar-denominated senior loan of up to $50 million to the BoG for up to 5 years, the proceeds of which will be onlent to small and medium-sized enterprises (SME) in Georgia.
Objectives and Scope BoG has identified the development of the SME sector in Georgia as a key objective in its business strategy, in additional to it being central to the recovery of the economy in the aftermath of the armed conflict with the Russian Federation in August 2008 and the global economic downturn. The proposed ADB loan will contribute to the expansion of BoG's SME lending activities and in doing so, contribute to Georgia's economic recovery.
Linkage to Country/Regional Strategy

The intervention is consistent with the Georgia Interim Operational Strategy and the overall financial sector strategy, as the loan to BoG will support private sector development by increasing access to financing for SMEs. The intervention also ties into the Georgia Growth Recovery Support Program, which outlines current difficulties in the Georgian banking sector and their impact on the broader economy. Again, the proposed loan seeks to provide systemic support to the Georgian banking sector during this challenging period, not only by providing financing but also by building confidence in the broader financial sector.

In addition, the proposed loan is also aligned with ADB''s poverty reduction strategy, which states that ADB seeks to promote sound and efficient banking systems and capital markets, since these are seen as indispensable for macroeconomic stability, mobilizing savings, and ensuring availability of long-term financing, an essential requirement for pro-poor growth.

Status of Development Objectives ADB''s loan supports the growth of the emerging banking sector in Georgia and increase SME access to financing. This will be achieved through relatively long-term funding (a 5-year loan) for SME lending by Bank of Georgia, to enable it to expand its loan portfolio.
Safeguard Categories
Environment FI
Involuntary Resettlement FI
Indigenous Peoples FI
Summary of Environmental and Social Aspects
Environmental Aspects The loan is classified as category FI (treated as C) under ADB's Safeguards Policy Statement (2009). BoG follows EBRD''s and IFC''s environmental and social policies and standards and established an environmental management system (EMS) on 30 December 2008. BoG's EMS, will be renamed the environmental and social management system (ESMS) as its policy and procedures incorporate not only ecological aspects but also worker protection issues (health and safety, harmful child labor, forced labor, and discriminatory practices) and community issues, such as cultural property, involuntary resettlement, and impacts on indigenous peoples. No significant environmental impacts are expected as BoG will onlend exclusively to SMEs.
Involuntary Resettlement With respect to social safeguards, BoG will strengthen its ESMS to ensure that transactions that will entail involuntary acquisition of land, involuntary restrictions on land use or on access to legally designated parks and protected areas that will cause physical or economic displacementwill be excluded for financing.
Indigenous Peoples With respect to social safeguards, BoG will strengthen its ESMS to ensure that transactions that will trigger direct or indirect impacts on Indigenous Peoples' (IP's) dignity, human rights, livelihood systems, culture or impact the territories or natural or cultural resources that IP's own, use, occupy, or claim as an ancestral domain or asset will be excluded for financing . The social safeguards exclusion list will be covenanted in the financial agreements with BoG.
Stakeholder Communication, Participation, and Consultation
Timetable for assistance design, processing and implementation
Concept Clearance 03 Jun 2010
Due Diligence 11 Jun 2010
Credit Committee Meeting 04 Oct 2010
Approval 03 Nov 2010
PDS Creation Date 30 Sep 2010
Last PDS Update 30 Sep 2014

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation

No documents found.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.