EIB and ProCredit to support faster recovery of Georgia`s SMEs from the COVID-19 crisis with €10 million

Published in Economics
Thursday, 24 December 2020 14:20

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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  • EU doubles contribution to COVAX to €1 billion to ensure safe and effective vaccines for low and middle-income countries

    The European Union has announced today an additional €500 million for the COVAX Facility, doubling its contribution to date for the global initiative that is leading efforts to secure fair and equitable access to safe and effective COVID-19 vaccines in low and middle-income countries. This new pledge brings us closer to achieving COVAX's target to deliver 1.3 billion doses for 92 low and middle income countries by the end of 2021. Team Europe is one of the lead contributors to COVAX with over €2.2 billion, including another €900 million pledged today by Germany.

    Announcing the new contribution at the G7 virtual leaders' meeting, President of the European Commission, Ursula von der Leyen, said: “Last year, as part of our Coronavirus Global Response, we committed to ensuring universal access to vaccines everywhere on Earth, for everyone who would need them. COVAX is best placed to help us reach this goal. This is why we decided to double the European Commission's contribution to COVAX, to 1 billion. With this new financial boost we want to make sure vaccines are soon delivered to low and middle-income countries. Because we will only be safe if the whole world is safe.

    Jutta Urpilainen, Commissioner for International Partnerships, added: “We are in a race against the virus and COVAX is our best hope that all our partners, in Africa and elsewhere, have access to safe and effective COVID-19 vaccines. The EU has been leading efforts in international fora, such as the G20 and G7, to guarantee that collectively we ensure that COVID-19 vaccines become a global public good. This is why today we are doubling our support to COVAX.”

    Stella Kyriakides, Commissioner for Health and Food Safety, stressed: Humanism and solidarity are essential values for Europe. These values have been our compass since the onset of the pandemic. The EU has invested close to 3 billion to pre-finance the production of safe and effective vaccines, which will benefit not only the EU but citizens across the world.  Vaccines produced in Europe are now going all over the world and we as Team Europe are working to share doses secured under our advanced purchase agreements preferably through COVAX with the Western Balkans, Neighborhood and Africa – benefitting above all health workers and humanitarian needs.”

    The contribution announced today is composed of a new €300 million EU grant and €200 million in guarantees by the European Fund for Sustainable Development plus (EFSD+) that will back a loan by the European Investment Bank. This is subject to the adoption of the Neighbourhood, Development and International Cooperation Instrument (NDICI) by the Council and the European Parliament. The EIB loan to be guaranteed by EFSD+ is subject to the approval of the EIB's Board of Directors. These funds will complement a previous €100 million grant and €400 million in guarantees from the EU budget.

    To date, a total of 191 countries participate in the COVAX Facility, 92 of them low and middle-income economies eligible to get access to COVID-19 vaccines through Gavi COVAX Advance Market Commitment (AMC). Most of these are in Africa. Through these contributions, the Commission and its partners will secure purchase options for future COVID-19 vaccines for all the participants in the Facility.

    Vaccines will be procured and delivered to countries by the UNICEF Supply Division and the PAHO's Revolving Fund for Access to Vaccines. The fast arrival of safe and effective COVID-19 vaccines has shown that multilateralism and multi-actor partnerships work to solve the most pressing problems of our time.

    Background

    COVAX is the vaccines pillar of the Access to COVID-19 Tools (ACT) Accelerator, a global collaboration to accelerate the development, production, and equitable access to COVID-19 tests, treatments, and vaccines.

    The COVAX Facility aims to purchase 2 billion doses by the end of 2021, including at least 1.3 billion doses for low and middle-income country. It will help to develop a diversified portfolio of vaccines, negotiated with different suppliers, and covering different scientific technologies, delivery times and prices. The COVAX Facility is a risk-sharing mechanism: it reduces the risk for manufacturers who invest without being sure about future demand, and it reduces the risk that countries would fail to secure access to a viable vaccine.

    The European Commission is committed to ensuring that everyone who needs a vaccine gets it, anywhere in the world, and to promote global health. This is why together with partners it has helped raised almost €16 billion since 4 May 2020 under the Coronavirus Global Response, the global action in support of universal access to tests, treatments and vaccines against coronavirus and for the global recovery. Team Europe's contribution was as follows: EU Member States (€3.1 billion), European Commission (over €1.4 billion) and EIB (almost €2 billion pledged in May and €4.9 billion pledged in June).

    The EU's efforts to develop and produce an effective vaccine will benefit all in the global community. The EU investment in scaling up manufacturing capacity will be to the service of all countries in need. Through its Advanced Purchase Agreements, it requires manufacturers to make their production capacity available to supply all countries and calls for the free flow of vaccines and materials with no export restrictions. For instance, the pharmaceutical company Sanofi-GSK, with whom the Commission concluded an Advanced Purchase Agreement in September, will endeavour to provide a significant portion of their vaccine supply through the COVAX facility.

    Building on the EU Vaccines Strategy, the EU is in the process of setting up vaccine sharing mechanism to allow EU Member States to redirect some of the doses procured under the advanced purchased agreement, preferably through COVAX.

    For More Information

    EU Global Response to coronavirus

    The news prepared in the framework of the EU project "EU NEIGHBOURS east"

  • 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

  • European Union and WHO join forces to support vaccination against COVID-19 in Georgia

    The European Union and the WHO Regional Office for Europe will work together in a major effort to support the deployment of COVID-19 vaccines and vaccination in Georgia. The project funded by the European Union and implemented by WHO will cover all phases - constituting “end-to-end” support - of COVID-19 vaccine deployment and vaccination and will also serve as a major investment to strengthen the routine immunization system.

    The project will be implemented by WHO over a three-year period as part of a €40 million European Union-funded initiative to support six countries in the WHO European Region in preparing for, deploying and monitoring rollout of COVID-19 vaccines.

    Carl Hartzell, EU Ambassador to Georgia said:

    “As part of our joint efforts to stop COVID-19, a proper and efficient vaccination campaign is key. The EU continues to stand by Georgia during the pandemic and is proud today to launch a new initiative with our close partner WHO. This initiative will support the complex vaccination rollout so that vaccines, when they arrive, are efficiently utilized and reach those that need them most.”

    Silviu Domente, WHO Representative and Head of the WHO Country Office in Georgia, said:

    “Vaccines offer hope and protection to those fighting on the frontlines of this pandemic and to those at highest risk living in fear of its devastating impact. Thanks to this generous support, WHO can strengthen its collaboration with the Government of Georgia to ensure that vaccines can reach those who need them most, as soon and as efficiently as possible.”

    The funds will be used initially to support the first phase of preparedness and deployment, with an emphasis on imminent needs in strategic programmatic areas such as planning, equipment/supplies, training of health workers and information campaigns.  

    The project builds on the European Union’s and WHO’s ongoing support to countries’ response to the COVID-19 pandemic, including the joint €35 million EU Solidarity for Health Initiative, aimed to support the partner countries in their fight against the virus and address better the needs of the most vulnerable people.

    The news prepared in the framework of the EU project "EU NEIGHBOURS east"

  • HWPL Hosts ‘HWPL Peace Education Development Forum in Africa’

    On February 6th, Heavenly Culture World Peace, Restoration of Light(HWPL) hosted a HWPL Peace Education Development Forum in Africa. 500 people from 24 countries in the sectors of African national education ministries, UNESCO national committee, MOU-signed schools and organizations participated to discuss ‘the Roles and Cooperation of Educations in the Post-COVID-19 Era.’

    The host organization, HWPL, is promoting international projects in 25 countries to develop long-term peacebuilding in Africa based on the its initiative ‘Spreading a Culture of Peace’ also proposed by the United Nations resolution.

    The forum highlighted the necessity of developing and applying a new educational policy to stop the disparities in education and human right violations such as sexual exploitation of children and women rampant in Africa during COVID-19 pandemic. Furthermore, speakers shared the examples of implementing HWPL Peace education curricula in their classrooms and reaffirmed the solidarity in promoting peace as educators in Africa.

    A member of the University of Zambia Youths of United Nations Association(UNZAYUNA) as well as the case presenter of HWPL Peace Education, Grace Mutale highlighted the importance of HWPL Peace Education, “Through HWPL Peace Education, I realized that I am the answer to realizing peace and determined to take part in peace work.”

    Deputy Director of Ministry of Education Kenya, Science and Technology, Bartholomew Lumbasi Wanikina said “Peace Education is important since through the teachers, children able to build and sustainable peace in their respective families, friends, community, workplace, and country.  Therefore, as educators, we must disseminate the message of peace so that children can have peace and have a sustainable peace,” emphasizing the responsibility and the role of educators in building sustainable peace.

    General Secretary, Cote d’lvoire National Commission for UNESCO, SORO N’ golo Aboudo said, “We would like to have an associated school so that this culture of peace program is taught in these schools, and that the children are really aware about the issue of peace and especially the issue of nonviolence.”

    During the forum, HWPL signed a MOA(‘Memorandum of Agreement’) with the Ministry of Education, Science and Technology in Kenya, and signed Peace Academy MOUs(‘Memorandum of Understanding) with 13 schools. The department of peace education will work closely with peace academies to appoint and train on-and offline peace educators and conduct pilot classes on the value of peace.

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  • New rules for all airline passengers to Georgia will begin to apply from 1 February 2021

    The Prime Minister-led Inter-Agency Coordination Council has introduced new rules for all airline passengers (both Georgian and foreign nationals) to Georgia. The rules will begin to apply from 1 February 2021.

    More specifically, Georgian nationals arriving in Georgia as of 1 February will have the option of providing a negative PCR test and self-isolating for 8 days or, instead of self -isolating, taking a second PCR test at their own expense, on the third day from their arrival, and thus exempt themselves from the obligation to self-isolate. For Georgian nationals entering the territory of Georgia by air without providing a negative PCR test, the period of self-isolation will be reduced from 12 to 8 days.

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