Luxembourg and Tbilisi, Georgia, 24 September 2020 – The Green for Growth Fund (GGF) has provided TBC Leasing with a loan of USD 5 million equivalent in Georgian lari to bolster energy efficiency (EE) measures among small and medium enterprises (SMEs). This is the first loan disbursed using the recently created share class to absorb local currency fluctuations. By providing the funding in local currency, the partners aim to alleviate the exchange rate risk for these clients, while also helping them to cope with the economic challenges of the global pandemic.
TBC Leasing has been a valuable ally for the GGF since 2017. It has demonstrated strong commitment to promoting energy savings through its tailored green leasing solutions to SMEs. The new financing from GGF will be used to enable the company’s clients to make more energy efficient investments and contribute to a greener economic recovery of the country. The projected energy savings from the investments are estimated at 13,380 MWh/a, preventing the emission of 2,863 tons of CO2.
The local currency for the loan was enabled by the GGF’s new dedicated share class for local currency lending. Supported in large part by contributions from the European Union under its EU4Energy initiative and the German Federal Ministry of Economic Cooperation and Development, this new fund layer, known as “L shares,” absorbs exchange rate fluctuations. The L shares expand the GGF’s ability to offer loans in local currency to its partner institutions, thus protecting these financial intermediaries and their clients from direct exposure to foreign exchange risks.
GGF Chairperson Olaf Zymelka stated: “We are pleased to be continuing our successful collaboration with TBC Leasing. This investment will expand the company’s green portfolio with SME clients and thus contribute to a greener and more sustainable economic recovery in Georgia. What is more, expanding local currency lending for these purposes helps ensure that this financing protects businesses as well as the environment: When borrowers can access loans in the same currency as their income, they are safeguarded from the potential ups and downs in the exchange rate. This is particularly important when businesses are facing the economic challenges brought about by the COVID-19 crisis.”
Mr. Nugzar Loladze, Chief Financial Officer of TBC Leasing, said: “We are excited to continue successful cooperation with GGF by forming new 5MUSD facility agreement that will be totally utilized in local currency. This will enable us to offer much more affordable green products for our SME customers and especially in Georgian Lari, which will also make it possible to avoid any risks caused by exchange rate fluctuations. Our strategic direction includes increase of the share of energy efficiency projects in our portfolio, which can be achieved only thought valuable partnership with all stakeholders of the value chain especially during the challenging times caused by the COVID-19 pandemics.”
ABOUT THE GGF
The Green for Growth Fund invests in measures designed to cut energy use and CO2 emissions, and improve resource efficiency in 19 markets across Southeast Europe and Turkey, the European Eastern Neighbourhood Region, and the Middle East and North Africa. The fund provides such financing directly to renewable energy projects, corporates and municipalities or indirectly via selected financial institutions. The GGF’s Technical Assistance Facility maximizes the fund’s investment impact through support for capacity building at local financial institutions and partners.
The GGF was initiated as a public-private partnership in December 2009 by Germany’s KfW Development Bank and the European Investment Bank, with financial support from the European Commission, the German Federal Ministry for Economic Cooperation and Development, the European Bank for Reconstruction and Development, and the Austrian Development Bank (OeEB). The fund’s growing investor base comprises donor agencies, international financial institutions and institutional private investors, including the International Finance Corporation, the Dutch development bank FMO, and the German ethical bank GLS. The GGF is advised by Finance in Motion GmbH. MACS Energy & Water GmbH, Frankfurt am Main acts as the technical advisor.
ABOUT TBC LEASING
TBC Leasing is a member of TBC Bank Group, founded in 2003. TBC Leasing is Georgia's leading leasing company, with a market share of 70% and total portfolio under management of above 300 million GEL. TBC Leasing finances such sectors as: construction, production, trade, agriculture, industry, renewables, technology, HoReCa and more. The company operates throughout the country, with 5 branches and 130 employees.
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