EBRD will issue a loan to help GOGC refinance a $250 Mln Eurobond

EBRD will issue a loan to help GOGC refinance a $250 Mln Eurobond

The FINANCIAL -- Tthe European Bank for Reconstruction and Development (EBRD) announced that it will issue an unsecured loan of EUR 217 million to help the Georgian Oil and Gas Corporation (GOGC) refinance a USD 250 million corporate Eurobond. The Bank will assist in the design and implementation of a gas exchange in Georgia. The project involves a comprehensive ESAP, entailing the addition of specific E&S functionality in the Company at the corporate level, and support for development of a strategic long-term roadmap. The Project also includes the development of an Equal Opportunities Action Plan ("EOAP").

The Project is a senior unsecured loan of EUR 217 million to JSC Georgian Oil and Gas Corporation ("GOGC" or the "Company"), a major Georgian electricity and natural gas supplier, to refinance a USD 250 million corporate Eurobond maturing next year. The loan will ease cash flow pressure for the Company resulting from the significant economic turmoil caused by COVID-19 and the difficulty for the Company to access the capital markets.

The Project is a response to the COVID-19 pandemic which caused significant shocks on the financial markets and an economic downturn in Georgia. A comprehensive Technical Cooperation ("TC") package will encompass sector reform, corporate level improvements are focused on climate corporate governance and supporting the role of women in technical positions in the energy sector TC to identify and quantify the investment requirements in the country to generate and transport green hydrogen as well as to upgrade the Company's assets to transport the blended hydrogen to end users domestically or regionally.

The state-owned GOGC, supplier of 20% of the country’s electricity generation, placed a USD 250 million Eurobond in 2012 on the London Stock Exchange with a maturity of five years. In April 2016, the Corporation re-issued the Eurobond and repaid the financial commitments made in 2012 in advance. The Eurobond matures on April 26, 2021, however, the company is unable to repay the debt due to the economic downturn caused by the COVID-19 pandemic. The proceedings of the loan will be used to refinance the maturing bond, in order to support “a vital infrastructure provider in Georgia at a time of stressed economic conditions caused by the COVID-19 crisis,” by addressing liquidity constraints, and enabling the company to access capital markets, according civil.ge

It is also noteworthy that Extended Producer Responsibility in managing electronic waste was discussed on September 21 at an online conference convened by the UNDP and the Government of Sweden in cooperation with the Ministry of Environmental Protection and Agriculture of Georgia. Representatives discussed the challenges and benefits associated with sustainable waste management, the legal framework needed to support EPR through all economic sectors and its practical implementation in the e-waste sector. The Georgian government has also asked the EBRD to explore the country’s potential for generating green hydrogen. The EBRD accepted and the technical cooperation will run over the next years.

Another interesting news is that “Green” hydrogen – made through the electrolysis of water powered by renewable electricity – has been emerging as the world’s best hope for a clean fuel. It can be blended with natural gas in pipelines and at power plants. Energy giants like ENGIE are exploring repurposing oil and gas platforms near offshore wind farms to produce green hydrogen at sea, and many major oil and industrial players worldwide are rapidly accelerating their investments into green hydrogen production and use. Read more

ADB maintains Georgia’s growth outlook at 4.5% for next year

Author: The FINANCIAL

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