Tbilisi, Georgia, December 30, 2008
—IFC, a member of the World Bank Group, and the EBRD are providing a financial package worth up to $200 million to Bank of Georgia to help the leading bank in the Caucasus region manage the effects of the global financial crisis.
The two international financial institutions will provide $100 million each, including subordinated and subordinated convertible loans of up to $50 million to support the bank’s capital base, and a senior loan of $50 million to provide longer-term liquidity that will allow the bank to continue lending to retail clients and small and medium enterprises, two key client bases that will drive economic growth in Georgia
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After several years of successful integration into the world economy, Georgia has also suffered from the effects of the global credit crunch. Access to international financing has become more difficult for Georgian banks and companies.
“Over the past several years, Georgia’s banking sector has made remarkable progress in deepening financial intermediation and facilitating economic growth,” said Jyrki I. Koskelo, IFC Vice President. “This investment into the Bank of Georgia will help promote a stable and healthy banking sector which is critical for other sectors of the economy to develop. We are happy to support the Bank of Georgia together with the EBRD and are considering other opportunities in the Georgian banking sector jointly.”
Varel Freeman, EBRD First Vice President, said the “swift reaction by international financial institutions demonstrates our preparedness to stand by our partners in times of needs. The EBRD is ready to support structurally sound clients to overcome the current crisis. This is key for the preservation of a sound banking system and the return to sustainable growth in the future.”
Bank of Georgia is the largest Georgian bank, with a market share of 34 percent of total assets, 33 percent of total loans and 30 percent of total deposits. Since November 2006, the bank has been listed on the London Stock Exchange in the form of global depositary receipts.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit
www.ifc.org
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About EBRD
The European Bank for Reconstruction and Development was established in 1991 when communism was crumbling in central and eastern Europe and ex-soviet countries needed support to nurture a new private sector in a democratic environment. Today the EBRD uses the tools of investment to help build market economies and democracies in countries from central Europe to central Asia. The EBRD is the largest single investor in the region. For more information, visit
www.ebrd.com
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