The European Union and the European Bank for Reconstruction and Development (EBRD) are providing fresh funding to support the green transition of micro, small and medium-sized enterprises (MSMEs) in Georgia.
The EBRD is extending a €25 million loan to Bank of Georgia for on-lending to local companies, with a special focus on investment in green technologies. This funding is completed by EU grant incentives to borrowers of up to 15 per cent and by free-of-charge local and international consultancy services under its EU4Business initiative.
The goal is for private firms to upgrade their products and services in line with EU standards and to advance sound health and safety and environmental practices in the workplace. Following such investments, companies will be able to offer high-quality products on the local market and benefit from trade opportunities abroad.
The new financing is part of a wider EU4Business-EBRD credit line – a financing instrument to boost the competitiveness of local firms in the Eastern Partnership region (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine). Since the launch of the programme in 2016, 170 companies in Georgia alone have already benefited from the initiative, in sectors from manufacturing to agriculture and from hospitality to medical services. Bank of Georgia was the first EBRD partner financial institution to join the programme, offering on-lending to businesses across the country.
The EBRD is a leading institutional investor in Georgia. Since the start of its operations there, the Bank has invested more than €4 billion in 265 projects in the financial, corporate, infrastructure and energy sectors, with 79 per cent of these investments in the private sector.
The EU has been supporting SMEs in Georgia through the EU4Business initiative since 2009. With almost 50 different projects active with a total budget of more than €320 million, the EU is the largest foreign supporter of private-sector development in Georgia. These efforts are bringing results – in 2019 alone, more than 36,000 SMEs in Georgia were supported, creating an estimated 30,000 new jobs and generating an estimated €400 million of extra income. EU4Business is one of the key tools used by the EU to support economic recovery from the Covid-19 pandemic, with many programmes receiving financial top-ups and having lower eligibility criteria than in the past in order to assist as many SMEs as possible.