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Georgia’s capital markets have developed significantly in recent years. However, long-term local-currency funding options for local issuers are limited by the country’s high dollarisation rate, narrow range of capital market products, low liquidity and shallow investor base.
The EBRD has worked with Georgia since 2011 to bolster its capital markets and make them attractive to investors. In 2023, the Bank supported capacity building in the corporate sector and made direct investments in local bonds.
The EBRD’s European Union (EU)-funded Capital Market Support Programme trained corporate-sector participants on topics including capital markets products, marketing and investor relations, transparency and disclosure, corporate governance and credit ratings. Workshops on initial public offerings and ESG issuance were also offered.
More than 20 Georgian firms applied for programme grants to reimburse part of their issuance-related fees. Of those, 11 successfully placed securities on the local capital market with a total issuance volume of over €250 million, more than doubling the size of the corporate bond market.
The programme supported seven of those issues with grants, helping companies to raise more than €150 million on the local capital market, including through novel green and social (gender) bonds and two inaugural issues by small and medium-sized enterprises (SMEs). The EBRD invested about US$ 14 million (€13 million) in the first issue under the programme – the first green bond ever placed on the Georgian capital market.
In 2023, the EBRD also participated in Georgia’s largest ever corporate offering and the first sustainability-linked bond (SLB) issued in the Caucasus. It invested US$ 25 million (€23 million) in the US$ 150 million (€135 million) corporate bond issued by its longstanding client, Georgia Capital, which will enhance the robustness of its capital management and boost its investment capabilities. The issue is also in line with its net-zero ambitions, with Georgia Capital committed to reducing CO2 emissions across its businesses by 20 per cent by the end of 2027.