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.
|Project Name||GEO: PROPOSED SENIOR LOAN TO BANK OF GEORGIA|
|Type of ADB Assistance / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Private sector development
|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||Hruschka, Stefan A.|
|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.|
|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.|
|Status of Operation/Construction||ADB conducted an extended annual review report of the transaction in September 2014.|
|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.
|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|
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.
|Title||Document Type||Document Date|
|Proposed Senior Loan to Joint-Stock Company Bank of Georgia||Initial Poverty and Social Analysis||Sep 2010|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
|Title||Document Type||Document Date|
|Proposed Senior Loan to Joint-Stock Company Bank of Georgia: Environment and Social Management System Arrangement||Environment and Social Management System Arrangements||Oct 2010|
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
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.