TBC Group Preparing for an Unprecedented Large-Scale Investment Project

TBC Group Preparing for an Unprecedented Large-Scale Investment Project

The FINANCIAL -- USD 10 Million Loan to TBC Bank - the EBRD’s 1st Energy Efficiency Initiative in Georgia “By announcing an unprecedented large-scale investment project, TBC Group will launch the basis of starting a brand new era in Georgia’s business environment.

 The scale of the project that’s to be announced in the very close future is unprecedented. The initiative involves a number of the top largest companies in the country and is believed to be an undisputable high-efficiency positive commitment to Georgia’s economy. I’d prefer to keep details of the project confidential till the official presentation is held,” Mamuka Khazaradze, TBC Group Chairman, told The FINANCIAL.


As for the already presented project, the EBRD is lending USD 10 million to TBC Bank to finance energy efficiency projects in Georgia. The facility will be used for on-lending to private sector industrial entities and residential customers to support rational utilization of energy.


Michael Davey, EBRD Director for the Caucasus, Moldova and Belarus, said the loan illustrates the importance the bank places on more efficient energy utilization for improving industrial competitiveness in light of the rising energy costs in Georgia and the region overall.


“Energy is a significant cost component for companies and these investments help local companies significantly reduce their energy consumption, and therefore become more competitive,” stated Davey during the signing ceremony held on November 30 at TBC Bank Head Office.


The EBRD, one of the largest investors in Georgia’s private sector, has to date signed a total of 7 investment projects in the country covering energy, transport, agribusiness, general industry and banking for a total commitment of almost EUR 600 million.


“In Georgia people consume 3.5 times more energy than in Western European countries. In order to reduce energy spending, TBC Bank is ready to finance solar and thermal energy projects, the alternative energy sources that Georgia is rich in,” declared Khazaradze.


In 2007 TBC Bank attracted USD 300 million from different international donors. As for TBC Group the figure is USD half a billion. In 2008 TBC Bank alone is expected to attract USD half a billion.


In November 2007 TBC Bank attracted USD 50 million foreign sources and in December another USD 50-60 million value international loan is to be received.


TBC Bank is one of the largest banks in Georgia in terms of assets with a significant presence in corporate and retail banking, insurance and leasing. TBC was established in 1992 and has been actively cooperating with EBRD since 1996.


TBC became the first Georgian company to receive an international rating. In 2007 international ratings agency Fitch Ratings upgraded TBC Bank’s long-run rating from B- to B+. For the first time the Moody’s Investors Service agency bestowed long-term credit ratings of B3 and Baa 3 for foreign currency and local currency respectively. TBC Bank is the first bank in Georgia to hold an ISO certificate. TBC Bank serves both retail and corporate markets. Its shareholders are IFC, DEG and a group of Georgian businessmen.


The minimum limit of an accessible loan from TBC Bank in the frame of the project is USD 120 000 and the maximum amount - USD 2.5 million.


In November 2007 two other projects of a total USD 49 million value were signed between the EBRD and TBC Bank: a USD 19 million syndicated credit line approval and USD 20 million contract for the brand new product Trade Financing.


In December TBC Bank will get another USD 12 million loan for mortgage financing from the EBRD, that’s the overall USD 60 million summed up value of the finances attracted by the bank from the latter for 2007.


“Recent crisis at international stock exchanges like NYSE and LSE have caused problems for financial giants like Citi Group and Merrill Lynch but I dare say foreign influence has not affected TBC Bank at this point and we still receive finances from international donors with unchanged interest rates,” claimed Khazaradze.


The USD 10 million loan is EBRD’s first energy efficiency initiative in Georgia under a framework that has been developed to encourage enterprises and housing associations to make better use of the country’s energy resources. Funds from this framework will also be made available to other local banks.


“The other Georgian bank that is expected to join the project is Cartu Bank,” claimed Davey.


“The major interest of Cartu Bank, as of a corporate service bank, getting involved in the project, owes to our commitment to give the customers the next best chance and opportunity to save on energy costs,” Giorgi Kvirikashvili, Cartu Bank’s General Director, told The FINANCIAL.


According to Kvirikashvili, the expected loan amount is USD 5 million. As for the official signing ceremony, it’ll take place as soon as all legal procedures are finished.


The project framework is complemented by grant funding by the UK and Canadian Governments as well as EBRD’s ETC Initiative to engage consultants to prepare energy audits, review investment proposals and support companies in securing funding from local banks and for implementation support.


“If assessed and implemented properly, the returns from energy efficiency investments can be high and the technical risks relatively low. Energy efficiency investments can help reduce energy consumption and may also improve production. Benefits can also be gained through environmental improvements and from the demonstration effect on the business community,” said Irakli Vardigoreli, the EBRD Energy Efficiency Business Development Manager.


The EBRD, owned by 61 countries and two intergovernmental institutions, aims to foster the transition from recently planned to market economies in Central and Eastern Europe and Central Asia.


As for TBC Bank, on December 15 by opening a new branch office at Tsereteli Ave, the bank is starting a new phase of presenting brand new 24 hour operating branches throughout the country.


“All newly opened TBC bank branches operate 24 hours a day. In addition we finally made the decision to say NO to those special security doors that TBC Bank is known for. Though the new security control technologies are more sophisticated and more expensive, we think it’s worthwhile to make reasonable investments of any amount in order to get closer to the customers and put away all barriers even if related to mere physical inconveniences like those security doors,” Vakhtang Butskhrikidze, TBC Bank’s General Director, told The FINANCIAL.





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