To promote climate finance and capital market development in Georgia, IFC has stepped in as an anchor investor in the country’s first green bond with a subscription of $20 million in the $80 million issuance. This is the largest domestic corporate bond placement in Georgia to date.
The bond issuer is Georgian Renewable Power Operations (GRPO), an affiliate of Georgia Capital, a leading investment management company in the country. The landmark transaction and IFC’s anchor subscription is expected to help mitigate climate change by avoiding around 170,000 tons of CO2 emissions annually, equivalent to greenhouse gases from over 33,000 vehicles.
The aim is to boost private sector-led renewable energy generation and energy independence in a country where over 30 percent of demand is met by imports and gas-fired thermal plants, and electricity consumption is increasing.
With the war in Ukraine disrupting financial markets and access to finance, local capital markets can play a key role in mobilizing investors and providing alternative financing sources. While Georgia’s corporate bond market is still emerging, the project is expected to catalyze further issuances of green bonds and other sustainable finance instruments. That will spur capital market development in the country, critical amid the volatility and uncertainty caused by the war, and its impact on energy security.
Zurab Gordeziani, Chief Executive Officer of GRPO, said: “The transaction will contribute to the development of the Georgian capital market through being the first green secured bond issuance on the Georgian capital market and the largest corporate transaction. The issuance was met with considerable interest from investors, including international financial institutions. GRPO expresses its gratitude to IFC for acting as an anchor investor in this transaction.”
IFC’s investment will also help set a precedent, encouraging alignment with good governance, environmental and social standards to develop more renewable energy projects in Georgia.
“With the first green bonds issuance in Georgia, IFC’s timely funding will help boost renewable energy development in the country. Given that Georgia’s corporate bond market is still nascent, we are confident IFC’s support will help deepen the nation’s debt capital market, creating jobs, improving energy security, and driving sustainable economic growth,” said Ivana Fernandes Duarte, IFC’s Regional Manager for the South Caucasus.
The project complements ongoing World Bank efforts to support Georgia’s capital and fixed income markets development, as well as the country’s role as a regional power exchange hub.
IFC is one of the world’s largest financiers of climate-smart projects for developing countries and one of the earliest issuers of green bonds. IFC launched a Green Bond Program in 2010 to help catalyze the market and unlock investment for private sector projects that support renewable energy and energy efficiency. As of June 30, 2022, IFC has issued $10.5 billion across 178 bonds in 20 currencies.
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org.
About Georgian Renewable Power Operations
Georgian Renewable Power Operations (GRPO), which is a part of the Georgian Renewable Power Holding (GRPH), is one of the leading renewable energy platforms in Georgia. The company owns and operates 71 MW installed capacity of commissioned renewable energy assets, including 4 hydro power plants and the only wind farm in Georgia. GRPO’s ultimate sole owner is Georgia Capital PLC, the largest investment management company in Georgia, listed on the premium segment of the London Stock Exchange. For more information, visit: www.grpc.ge.