Financed ProjectsTBC Bank SME 3

Identification Code:

OP/14/0048

Total Operation Cost:

10.000.000

Maturity:

36 months

Operation Status:

Description and Purpose of the Operation:

TBC Bank SME 3

Countries of Operation:

Georgia (100,00 %)

Financial Product:

SME's

Sector:

Financial Institutions

Domain:

Private

Borrower/Client:

3rd SME Loan Facility to TBC Bank

Co-Financiers/Participants:

N/A

Guarantors/Sponsors:

N/A

Developmental and Regional Cooperation Impact:

The Project is expected to have favorable economic benefits for the Georgian economy, the most relevant being additional tax revenue gains from increased economic activity from the incremental amount inflows. In addition, the amount provided will help further enhance benefits such as increases in employment, increase in export capacity and competitiveness, and multiplier effects for other parts of the economy. The regional cooperation element is similarly expected to be modest but favorable. Such transaction will have positive, albeit modest, impact on regional cooperation, with involving trade SMEs helping to enhance intra-regional trade. The most significant impact though from BSTDB’s funding, would be the mobilization of additional external resources to the benefit of the Georgian economy in general. The operation is consistent with the sectoral and operational priorities outlined in the Country Strategy for Georgia 2011-2014.

Environmental Classification and Impact (summary):

SME financing is normally not likely to generate significant negative environmental and social impact. Nevertheless, there are certain environmental and social risks associated with such financing for which the FI needs to have the appropriate capability to ensure that these risks are properly assessed and mitigated. The Environmental and Social Assessment of TBC Bank focused primarily on the existing environmental and social management arrangements, such as policies, procedures, rules and responsibilities, and whether the company is engaged in activities prohibited by the Bank as stipulated in the BSTDB Environmental and Social Exclusion List. The assessment concluded that TBC Bank has instituted a functioning environmental and social management system which was found commensurable with the level of environmental and social risks associated with its SME and trade financing activities. Its Board of Directors adopted the Environmental and Social Policy as of January 2012 and it is an integral part of the responsible corporate governance. The Client’s Environmental and Social procedures include transaction screening and categorization, assessment, mitigation and control, as well as monitoring and reporting of environmental and social risks. Both the policy and the procedures are based on IFC Performance Standards (PS), EBRD Performance Requirements (PRs) and ADB standards. The Borrower reported that it is not engaged in financing any activities contained in the Bank’s Environmental and Social Exclusion List. Overall, it is expected that the Operation will contribute to promoting small and medium businesses in Georgia and positively impact on poverty alleviation, stimulate self-employment, create new jobs and generate revenues. For the purpose of this Operation TBC Bank will be required to continue to adhere to the established internal rules and procedures for environmental and social risk assessment; remain compliant with subject national legislation in effect and observe the BSTDB Environmental and Social Exclusion List.

Operation Leader:

Financial Institutions I

E-mail:

fi1@bstdb.org