BOG LC Bond DCM (IFC-39651)

Countries
  • Georgia
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
FI
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Jun 14, 2017
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
Bank of Georgia JSC
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Ring Fence
  • Small & Medium Enterprises
A financial intermediary is a commercial bank or financial institution that receives funds from a development bank, sometimes for a specific lending purpose. A "ring fence" is another name for this specific purpose. These funds are then used for lending by the financial intermediary to client companies or individuals.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 70.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Loan Amount (USD)
$ 70.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ IFC website

Updated in EWS Aug 3, 2018

Disclosed by Bank Jun 1, 2017

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to IFC website, IFC invested in a tradable Eurobond issued by Joint Stock Company Bank of Georgia (JSC BoG or the Bank), an IFC strategic partner in Georgia (the Project). BoG is a wholly owned subsidiary of Georgia-based JSC BGEO Group, whose parent BGEO Group PLC is incorporated in the United Kingdom and listed on the Premium segment of the London Stock Exchange (LSE). The issuance comprises new notes offered by JSC BoG in the amount of 500 million Georgian Lari (GEL), with a 3-year maturity (the Notes). Proceeds from the issuance of the Notes are being used by BOG to support GEL-denominated lending, primarily to retail banking clients, to finance existing liabilities and for other general working capital and corporate purposes. The Notes are listed on the Irish Stock Exchange under 144A/Reg S and were offered to qualified institutional buyers in the United States and to non-US persons elsewhere.

The development impacts of this projects are:
1. Demonstrate the ability of a Georgian entity to attract long-term funding in local currency from international investors through a market transaction during volatile economic times;
2. Increase financial inclusion in Georgia. By providing long-term financing to BoG IFC supported a systemically important lender in Georgia, heightening BoG’s role in diversifying the country's economic base, creating jobs, and fostering sustained economic growth. Banking sector penetration in Georgia remains low. In order to enlarge financial intermediation, it is essential to increase the flow of credit to individuals and MSMEs and the economy in general; and
3. Help increase the Bank’s capacity to expand lending in local currency, helping borrowers avoid risks related to borrowing in foreign currency

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

BoG is a privately owned joint-stock company incorporated in Georgia. The holding company of the Bank is JSC BGEO Group, JSC BGEO is a fully owned subsidiary of the UK incorporated BGEO Group PLC. BGEO Group PLC is listed on the Premium segment of the London Stock Exchange and has a current market capitalization of approximately U$1.9 billion. Its top 10 institutional shareholders which, in aggregate, own about 36% of the Group’s shares include Schroeder Investment Management PLC, Artemis Investment Management, Harding Loevner LP and Westwood International Advisors Inc.

Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actor Relationship
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

There is often limited information publicly available about what development banks are funding through financial intermediaries. In 2021, the Early Warning System partnered with Oxfam International to incorporate information on high-risk projects being funded by financial intermediaries receiving funding from the International Finance Corporation (IFC) and the Dutch Development Bank (FMO).

The information listed below describes the relationship between the different private actors linked to high-risk sectors and subprojects of IFC and FMO's financial intermediary investments and/or the financial intermediary's parent companies made from 2017 through 2020, including any associated ring fences.

The database, however, does not explicitly or implicitly imply that IFC or FMO have material exposure to or are contractually or legally accountable to the sub-projects financed by their financial intermediaries or the financial intermediary's parent companies. It only shows a seemingly financial relationship among the different private actors, the financial intermediaries, and IFC or FMO.

Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

BoG is a privately owned joint-stock company incorporated in Georgia. The holding company of the Bank is JSC BGEO Group, JSC BGEO is a fully owned subsidiary of the UK incorporated BGEO Group PLC. BGEO Group PLC is listed on the Premium segment of the London Stock Exchange and has a current market capitalization of approximately U$1.9 billion. Its top 10 institutional shareholders which, in aggregate, own about 36% of the Group’s shares include Schroeder Investment Management PLC, Artemis Investment Management, Harding Loevner LP and Westwood International Advisors Inc.


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

Project Contact: Giorgi Alpaidze
Head of Finance, Funding and Investor Relations
JSC Bank of Georgia
Telephone No.: +995 32 2 444 444
Email Address: g.alpaidze@bog.ge
Office Address: 29a Gagarini Str., Tbilisi, Georgia
Website: www.bgeo.com

General IFC Inquiries
IFC Communications
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

ACCOUNTABILITY MECHANISM OF IFC

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

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