Bank of Georgia to receive IFC and EBRD support

Bank of Georgia has signed a deal to receive a financial package of USD 200 million from the European Bank for Reconstruction and Development and the International Financial Corporation. It was signed on December 30, and envisages that the two international financial institutions will provide USD 100 million each.

Bank of Georgia, EBRD and IFC held a joint press conference on this issue in the Courtyard Marriott hotel on Tuesday. According to CEO of Bank of Georgia Irakli Gilauri, the loan includes subordinated and subordinated convertible loans of up to USD 50 million to “support the bank’s capital base”, as well as a senior loan of USD 50 million to provide long term liquidity. According to Gilauri “that will allow the bank to continue lending to retail clients and small and medium-sized enterprises, two key client bases that will drive economic growth in Georgia.”

“With this move EBRD and IFC have shown great confidence not only in Bank of Georgia but also in the whole banking system in Georgia,” Gilauri told journalists.

EBRD Director for Bank Lending Jean-Marc Peterschmitt stressed the importance of the funding, which according to him is “very large”. He said that “this was a response to the changing situation and new needs.”

“2008 has been a very difficult year, in Georgia particularly, not only because of the world financial crisis but the developments in August. You were hit by a double blow and We are ready to support the country. This deal is proof of that,” Peterschmitt said.

Snezana Stoiljkovic, IFC Director for Central and Eastern Europe, noted that the package was allocated to “maintain the bank’s strong balance sheet.” “We support Bank of Georgia in order for the bank to be able to continue giving loans to entrepreneurs and corporate people and thus help the Georgian economy to develop,” Stoiljkovic stated.

Both EBRD and IFC representatives said they are planning to support the Georgian economy, and primarily the banking system, further.