The green shoots of growth in Georgia: hydroponic farming with EU support

Published in Economics
Wednesday, 07 March 2018 18:25

Growing Georgian vegetables by employing the latest European technologies – this is the motto of Imereti Greenery, a Dutch-Georgian enterprise located in western Georgia, which has benefited from EU support for its development under the EU4Business initiative, seeing production and profits soar as a result.

Since its establishment, the enterprise has been gradually expanding its greenhouse coverage and now occupies 2 hectares of territory in the city of Samtredia. Lettuce and cucumber here is grown by following hydroponic farming – a modern method of agriculture where crops are cultivated without soil by using mineral nutrients in a water solvent. Smart use of geothermal waters makes farming at Imereti Greenery way more efficient and responsible. The clients of the enterprise comprise of the major supermarket chains and high-class hotels in Georgia.

EU4Business and the EBRD are part of the company’s success story: with the EBRD’s Advice for Small Businesses programme back in early 2016, the enterprise introduced modern accounting standards which made financial reporting much effective and relations with banks much more successful.

Following implementation of the project, production was up 75%, profits rose 380% and the number of staff grew by 129%.

On the back of the accounting changes, the enterprise was also able to secure financing for LED lightning lighting for growing corps in winter, and is now eyeing even further growth: additional space for greenhouse in Imereti and expansion to Samegrelo region.

“We are proud that we are generating job opportunities for locals of the region. Regional development is critical for our country. Each new job can bring real difference to lives of one, two and maybe even more families and communities,” adds Natia Khelaia, the director of Imereti Greenery. Future plans of Imereti Greenery include substituting imports and exporting to the neighbouring countries.

EBRD Advice for Small Businesses

The EBRD Advice for Small Businesses programme, funded in the Eastern Partnership countries by the EU under its EU4Business initiative, aims to promote good management in the SME sector by providing assistance to individual enterprises, helping them to grow their businesses. It supports SMEs to make structural changes and develop new business skills, helping them to thrive and compete in market economies. The programme also enables SMEs to access local consulting services on a cost-sharing basis by providing grants of up to €10,000.

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  • Team Europe: EIB immediate Covid-19 response support to the Georgian MSME sector reaches milestone with additional support to Liberty Bank
    • The EU bank will extend Covid-measures to the existing credit line at the Liberty Bank for a total of €17.5 million, including a €2.5 million multi-currency top-up.
    • Loan reinforces Team Europe support for the recovery of Georgian MSMEs from the COVID-19 pandemic as well as sustains jobs, maintains liquidity and operations, and fuels the economic recovery of Georgia.
    • In 2020 alone, EIB provided  €70 million to support faster recovery of Georgian businesses from COVID-19 pandemic

    The European Investment Bank (EIB), the lending arm of the European Union, and Liberty Bank agreed to expand an existing credit line for Georgian micro, small and medium-sized enterprises (MSMEs) with additional €2.5 million to a total of €17.5 million. With this signature, the EIBs total Covid-19 immediate response comprises additional lending exceeding € 70 million, and existing loans benefiting from Covid measures exceeding € 90 million.
     
    The EIB loans inject fresh capital into the national financial market at a time when the COVID-19 pandemic is burdening SMEs with liquidity issues and restricting their ability to access finance for maintaining daily operations or funding expansion plans.
     
    The loan agreement was signed in presence Charles Michel, the President of the European Council.
     
    Please find the video materials here: https://we.tl/t-HjPiBizZZK
     
    EIB President Werner Hoyer, said: Team Europe and the EIB will continue to build up our support for the Georgian MSMEs and fuel the economic and social recovery of the national economy from COVID-19. Last year alone we boosted Georgian recovery from COVID-19 with EUR 170 – 70 million in new lending for MSMES, and 100 million for the reinforcement of the national healthcare sector`s ability to deal with the pandemic. Today, the EIB increased both the amount and the attractiveness of our loans available to MSMEs, as this is the first loan the EU Bank provides to a counterpart in Georgia in local currency. We look forward maintaining our position as the trusted ally of the Republic of Georgia and a key source of support for sustainable social and economic development.”
     
    CEO of Liberty Bank Vasil Khodeli commentedI would like to thank EIB and the EU for their continuous support and the confidence they have shown in Liberty Bank. Thanks to the increased loan amount, Liberty Bank will unlock significant additional lending for MSMEs in Georgia. The coronavirus has hit MSMEs very hard and this facility will provide much needed support for our clients to overcome short-term liquidity shortages, maintain jobs and support economic recovery in the upcoming months. The additional multi-currency facility equivalent to GEL 10 million includes the possibility to make financing available in local currency, which provides us with greater flexibility to finance and support wider range of MSME businesses in Georgia. This is also a further sign of our commitment to help businesses of all sizes to get through the turbulent times.”

    Further increasing affordability of EIB loans
     
    The loan introduces the option to make funding available in synthetic lari, Georgia’s national currency, and increases the affordability of the loans for MSMEs. The expansion will help Georgian MSMEs sustain jobs, maintain liquidity to continue operations, and fuel the economic recovery of Georgia from the COVID-19 pandemic.
     
    The investment from the EU bank forms part of the EIB’s SME Outreach Initiative, which promotes access to finance for MSMEs by supporting smaller local banks to better service their clients. MSMEs are the backbone of the Georgian economy and major employers in the country. The loan expansion comes with a €450,000 in technical assistance to support Liberty Bank improve and expand its offer for MSMEs.
     
    Team Europe adds value for Georgian companies
     
    Covered by a guarantee from the European Union, the loan from the EU bank will enable increase in lending activities to MSMEs without jeopardising the long-term stability of the country’s financial sector or its ability to support the economic recovery from the pandemic in the long term.
     
    This credit line comes with increase attractiveness to SMEs benefiting from the more flexible lending terms enabled by the EIB’s COVID-19 emergency measures. These measures are extended as part of the Team Europe’s efforts to Georgia and other EU partner countries during the pandemic.
     
    To date, the EU bank has invested more than €290 million in credit lines for Georgian businesses, sustaining more than 54,000 jobs in the country.
     
    Background information
     
    About the EIB:
    The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
     
    The EIB in Georgia:
    The EU Bank has been supporting economic and social development of Georgia since in 2007, providing to date some EUR 1.85 billion to local economy. The EU Bank activities in the country supported key infrastructure projects (EUR 1bn), MSMEs and mid-caps (EUR 290m), Municipal infrastructure (EUR 280m) and green energy generation projects (EUR 23.5m). COVID-19 recovery activities in 2020 totalled EUR 170m.
     
    Georgia is among a few non-EU countries eligible to benefit from the European Investment Fund (EIF) operations, designed to support small and medium enterprises (SMEs) with risk-sharing instruments.  Today, the EIB Group portfolio of guarantees in Georgia cover EUR 382.9 million of SMEs loans.

    The EIB finances most projects in Georgia under the EU External Lending Mandate. This provides the EIB with a guarantee covered by the EU budget for projects in the fields of social and economic infrastructure, local private sector development and climate action. Projects may also benefit from EU grants made available under the DCFTA program funded by the NIP, which amongst others promotes EIB’s efforts to make funding available in local currency.
     
    About JSC Liberty Bank:

    Liberty Bank is one of the largest Banks in Georgia, with total Assets of over GEL 2 bln and Capital GEL 200 mln. The Bank operates the largest branch network comprised of over 360 branches and 570 ATMs. The Bank is the exclusive agent of the Government of Georgia for the distribution of pensions and social benefits. The Bank employs over 4600 employees serving over 1.7 mln customers. 

    For more information on the EIB’s activities in Georgia please follow: https://www.eib.org/en/publications/the-european-investment-bank-in-georgia

    Source: The EU Press Release

  • Georgia: Statement by the Spokesperson on the latest political developments

    Following the arrest of Nikanor Melia, Chairperson of the United National Movement - the largest opposition party in Georgia, political polarisation in the country has regrettably further deepened. This polarisation risks undermining Georgia’s democracy. The European Union urges all parties to step up efforts to de-escalate and come together to find common ground.

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  • New EU programme to support readiness for vaccination efforts in Eastern Partnership countries with WHO

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  • Georgia in talks with the EU for financial assistance from 2021 to 2027

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