The EBRD acts a guarantor to international commercial banks and issuing banks handling the political and commercial payment risk. This has been particularly useful for Georgia – and the region as a whole – during recent turbulent times caused by the coronavirus pandemic and now the war on Ukraine.
The results of the TFP have been outstanding. Since 1999 we have supported more than 2,400 transactions with Georgian financial institutions as issuing banks for a total of € 1.7 billion. Georgia, despite its size, is placed third in the TFP’s rankings according to number of transactions. In terms of intra-regional trade we have facilitated over 790 transactions with Georgian banks and companies for a total of more than €540 million.
One of our most recent transactions was between Ukraine and Georgia in 2022. Despite the war we are guaranteeing the exports of LED lighting to Georgia from one of western Ukraine’s major cities, Ternopil. This guarantee will help ensure that Georgia’s Adjara region is able to import greener and more efficient street lighting, thereby cutting electricity costs and improving safety.
In 2022 we helped a Georgia-based company to win its first international tender. We have a trusted partnership with a Moldovan and a Georgian bank, which we used to establish a relationship between the two banks facilitating the transaction. As a result, Chisinau will receive new and efficient solid waste collection vehicles from Georgia.
Within the Caucasus we capitalised on our longstanding relationship with another Georgian bank and an Armenian bank to help another Georgian company export greener and more efficient buses to the Yerevan municipality.
We are also pioneering factoring and supply chain finance in the Caucasus, having recently helped one chocolate factory to export its produce to a Georgian confectionery distributor. The Armenian factory wanted to defer payment while allowing the exporter to settle at sight. International factoring was the best solution.
We have some great developments in Azerbaijan, too. After a five-year hiatus that followed the 2015 financial crisis we have reactivated our trade finance guarantee with our partner bank and already issued our first transaction. We are looking forward to helping Azerbaijani businesses integrate further into international markets.
T for…trade capacity
We are helping our partners build trade capacity through e-learning, webinars, conferences and advisory services. We are also working with regulators to improve the legal and regulatory environments across the Caucasus.
Lastly, in November 2022, we gathered more than 100 leading industry professionals in Tbilisi to discuss, among other things, demand guarantees, trade disputes and factoring. In November 2022 we held a seminar for the banking sector in Armenia, explaining the EBRD’s approach to the Paris Alignment and sustainable trade finance. Our next event will be held in Tbilisi in February 2023.