EIB and ProCredit to support faster recovery of Georgia`s SMEs from the COVID-19 crisis with €10 million
The European Investment Bank /EIB/ will provide €10 million to the ProCredit Group to offer a new credit line for small and medium enterprises (SMEs) and midcaps.
The EU bank and ProCredit create a €10 million credit line for the recovery of SMEs and midcaps from the COVID-19 pandemic in Georgia.
EIB and ProCredit Group agree on similar credit lines in Ukraine (€25 million) and Moldova (€20 million), bringing the total support to companies to €55 million.
The operation is part of the Team Europe’s COVID-19 emergency response to help sustain jobs, maintain liquidity and operations, and fuel the economic recovery of the EU partner countries.
The European Investment Bank, the lending arm of the European Union, will provide €10 million to the ProCredit Group to offer a new credit line for small and medium enterprises (SMEs) and midcaps in Georgia and support their faster recovery from the COVID-19 pandemic. The credit line can be made available in multiple currencies, including in the local currency.
The investment is a part of a €55 million regional agreement with the ProCredit, which allows creation of similar credit lines at ProCredit Group in Ukraine (€25 million) and Moldova (€20 million), all in support of faster economic COVID-19 recovery of the EU partner countries in the Eastern Neighbourhood.
This transaction provides much-needed financing to companies in Georgia to address working capital issues created by the ongoing pandemic. The EIB loan also strengthens the national banking sector in Georgia and reinforces its ability to finance the economic recovery of the country.
EIB Vice-President Teresa Czerwińska, who is in charge of operations in Georgia, Moldova and Ukraine, said: “Team Europe continues to support economic recovery of EU partner countries in the Eastern Neighbourhood from COVID-19, reinforcing pan-European solidarity in these difficult times. We have thus created new sources of financing at a moment when such aid is crucial for the survival of our SMEs. We look forward to expanding our partnership in the future, so as to allow even more companies benefit from our shared dedication to support SMEs and midcaps grow and develop.
EU Ambassador to Georgia Carl Hartzell said: The EU stands by Georgia during the pandemic. The EU has mobilised an unprecedented GEL 1.5 billion COVID-19 support package for Georgia, of which economic recovery of businesses is a fundamental part. This top-up by the EU bank strengthens this component by providing more assistance via local Georgian banks. Thanks to this agreement, an additional number of Georgian small and medium businesses will be able to access finance to get them through these challenging times.
The management of ProCredit Holding AG & Co. KGaA, the parent company of the ProCredit group, said:
“Thanks to the well-established relationships with our clients and partners such as the EIB, we have been able to provide efficient support to numerous SMEs during these turbulent months. These EIB credit lines will support SMEs in Georgia, Moldova and Ukraine to overcome short-term liquidity shortages and will provide much-needed support in local currencies for their investment projects. We expect that this will open them up to new lines of business and opportunities and thus will support economic recovery in the coming years. We are confident that this will be stimulated by a structural shift towards investments that are climate-friendly as well as socially and ecologically sustainable.”
Team Europe: Strengthening pan-European solidarity in times of crisis
The EIB investment is a part of Team Europe’s overall response to COVID-19 and supports the sustainable social and economic recovery of the EU’s Eastern Neighbourhood. The operation reinforces both SMEs and mid-caps, which are the backbone of national economies and a major source of employment in three countries.
Covered by guarantees from the European Union, the EIB investment enables the ProCredit Group to increase its lending activities without jeopardising the long-term stability of the local financial sectors or their ability to support the economic recovery from the pandemic in the long term.
The credit lines will be even more attractive due to the more flexible terms enabled by the EIB’s COVID-19 emergency measures. These emergency measures are a part of Team Europe’s efforts to support partner countries in the Eastern Neighbourhood during the pandemic.
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