Publish Date : 10-May-2017
Delivering on its key objective of private sector development in Georgia, the EIB Group (European Investment Bank and European Investment Fund) is implementing two new programmes developed jointly with the European Commission. These two programmes were prepared in the context of the Association Agreement of Georgia with the EU: the DCFTA Initiative East as well as the EU Research and Innovation Programme Horizon 2020: InnovFin EU Finance for Innovators.
The two programmes were presented at a conference held on 8 May in Tbilisi, bringing together around 200 representatives of business, banks, microfinance institutions, financial advisors and industry associations. The conference guests were addressed by high ranking representatives of the European Union, the Georgian Government, and the European Investment Bank, namely: Mr. Jano Herman, Ambassador of the European Union to Georgia, Mr. Dimitry Kumsishvili, First Vice Prime Minister and Minister of Finance of Georgia, Mr. Levan Davitashvili, Minister of Agriculture of Georgia, Mr. Giorgi Cherkezishvili, Deputy Minister of Economy and Sustainable Development of Georgia, and Mr. Heinz Olbers, Director of the Neighbouring Countries Department of the European Investment Bank.
The Deep and Comprehensive Free Trade Agreement (DCFTA) Initiative East aims to strengthen economic development in the countries which have signed an association agreement with the EU namely Georgia, Moldova and Ukraine by providing financial and technical support targeted at small and medium-sized enterprises (SMEs) in these three countries.
The EIB Group is joining forces with the EUs Neighbourhood Investment Facility (NIF) to provide a package of instruments designed to support the three countries in addressing the market needs and underpin the objectives of the DCFTAs, aiming for the progressive removal of barriers and creation of the necessary conditions to allow SMEs to benefit from the new market environment.
The overall objective of this initiative is to support economic growth and generation of employment in the three countries. It will also enhance access to finance in the form of improved lending terms and conditions and provide first loss SME portfolio guarantees, enabling local intermediary banks to take on more risk and reach out to underserved segments of the economy.
The initiative will strengthen the capacity of the private sector, in particular SMEs, to compete in local and international markets, by:
Offering SME loan guarantees to local banks and other financial intermediaries in cooperation with the European Investment Fund (EIF), enabling them to improve lending terms and conditions and thus providing wider access to finance for SMEs.
Providing technical assistance to counterpart financial intermediaries via institutional and capacity-building activities and advisory services to the small and medium-sized enterprises at regional and local level by promoting rural development with a particular focus on agri-food value chain development.
Supporting micro-enterprises through local microfinance institutions.
"InnovFin EU Finance for Innovators" is a joint initiative launched by the EIB Group in cooperation with the European Commission under the EU Research and Innovation Programme Horizon 2020.
InnovFin consists of a series of integrated and complementary financing tools and advisory services offered by the EIB Group, covering the entire value chain of research and innovation (R&I) in order to support investments from the smallest to the largest enterprise.
In February 2017 the European Investment Fund (EIF) and ProCredit Bank JSC (Georgia) signed the first agreement for SMEs and small midcaps in Georgia under InnovFin. The agreement, supported by the InnovFin SME Guarantee facility is expected to enable ProCredit to provide EUR 50m of loans to innovative companies over the next two years. This first InnovFin SME Guarantee Facility in Georgia was presented during the conference.
It is in the interests of both Georgia and the European Union to work towards strengthening private businesses in Georgia. A well performing private sector, represented particularly by SMEs, is strategically important for growth and job creation in Georgia and for further diversification of the countrys economy. Today we have presented the opportunities the DCFTA Initiative East and the InnovFin EU Finance for Innovators offer in this context to the Georgian private sector, commented Mr. Dario Scannapieco, EIB Vice-President responsible for the financing of SMEs and midcaps.
H.E. Janos Herman, Ambassador of the European Union to Georgia stated: "These programmes are another proof that the European Union is committed to supporting the development of Georgian SMEs. In close cooperation with the European Investment Bank, we provide tangible support to innovative businesses that seek to take advantage of the new opportunities with the EU."
Mr. Dimitry Kumsishvili, First Vice Prime Minister, Minister of Finance of Georgia stated: Projects of great significance for Georgia are being implemented with the financial support of the European Investment Bank in the roads, energy, water and municipal infrastructure sectors. The EIB is also supporting the countrys private sector. The operations and future plans of the EIB manifest themselves in the great support for the Four Point Reform Agenda initiated by the Prime Minister of Georgia for the acceleration of infrastructure projects and support for entrepreneurship.
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