To foster the growth of local capital markets and combat greenhouse gas (GHG) emissions in Georgia, IFC is spearheading an investment through a commitment of $10 million in a five-year $150-million bond, recognised as the foremost sustainability-linked bond both nationally and in the Caucasus region.
Georgia Capital, the bond’s issuer, operates out of Georgia, maintaining a diverse investment spread over various sectors such as banking, health care, insurance, renewable energy, and pharmacy retail.
This deal is anticipated to assist Georgia Capital and the companies it holds in slashing their GHG emissions by 20% by 2027.
The ambition of GHG reduction for Georgia Capital and its associated companies hinges on the adoption of energy-saving practices. These strategies encompass the transition from natural gas heating to more efficient electric-based heating systems, integrating electric vehicles into operations, and prioritising renewable power sources.
Such efforts align with Georgia’s national aim of curbing GHG emissions by 35% by 2030 in relation to the 1990 figures.
JSC Georgia Capital’s CEO, Irakli Gilauri, said, “Despite the challenging global credit markets, we successfully priced the largest ever sustainability-linked bond offering in Georgia amid massive support from domestic and international investors. This issuance, with IFC’s support, is key to the development of Georgia’s local capital market, supporting its transition towards a more sustainable and lower-carbon economy.”
Furthermore, he noted, “The demand for our bond shows rapid development of Georgia’s capital markets, soon emerging as significant alternative sources of capital for Georgia Capital and our portfolio companies.”
In the backdrop of stringent international financial conditions coupled with escalating prices of food and energy, IFC’s position as an anchor investor is poised to bolster confidence in potential private-sector backers, underlining the feasibility of sustainable financial tools. Given that Georgia’s corporate bond scene is still emerging, this investment aims to amplify the growth of Georgia’s capital markets while promoting sustainable endeavours.
Ivana Fernandes Duarte, IFC’s Regional Manager for the South Caucasus, said, “Sustainability-linked bonds are a rapidly growing capital market instrument to support global sustainable development. This pioneering bond issuance in Georgia is expected to be exemplary in several ways, including finding ways to protect the environment through energy efficiency measures. We hope it acts as a catalyst, encouraging companies to align their activities with net-zero targets, driving inclusive and sustainable economic growth.”
Being catalogued on the Georgian Stock Exchange, this bond offering adheres to the International Capital Market Association’s guidelines for sustainability-linked bonds and universally recognized standards of sustainable finance.
Furthermore, IFC’s participation in this bond mirrors its prior initiatives, which included assisting the National Bank of Georgia in shaping the country’s Sustainable Finance Roadmap and Sustainable Finance Taxonomy, culminating in IFC’s foundational investment in Georgia’s inaugural green bond launched by Georgian Renewable Power Operations in 2022.
