The IFC investment comprises of 108.34 million Georgian Lari, equivalent to approximately $45 million in bonds issued by JSC Bank of Georgia.

JSC Bank of Georgia, 29a Gagarini Str., Tbilisi, Georgia.

(i) Demonstrate the ability of a Georgian entity to attract long-term funding in local currency from international investors through a market transaction during volatile economic times;
(ii) Increase financial inclusion in Georgia. By providing long-term financing to BoG IFC supported a systemically important lender in Georgia, heightening BoG’s role in diversifying the country's economic base, creating jobs, and fostering sustained economic growth. Banking sector penetration in Georgia remains low. In order to enlarge financial intermediation, it is essential to increase the flow of credit to individuals and MSMEs and the economy in general; and
(ii) Help increase the Bank’s capacity to expand lending in local currency, helping borrowers avoid risks related to borrowing in foreign currency

IFC purchased the Notes as a means of providing long-term local currency financing aimed at helping the systemically important bank in Georgia to meet its long-term funding needs in Georgian Lari at affordable commercial terms. IFC's anchor investor role was intended to help mobilize funding via the bond issuance by contributing to investor appetite and providing market confidence. By supporting the debut local currency bond issue by the Bank and from Georgia IFC has laid the foundation for a rollout of a sustainable bond funding program, thus achieving funding and lending targets, particularly in local currency.

The investment by IFC is participation in JSC Bank of Georgia's (BoG) Georgian Lari (\"GEL\") denominated bond issuance (the \"Notes\"), in an aggregate principal amount of the GEL equivalent of US$ 207 million (the \"Project\"). IFC's undertaking was in the form of a commitment to purchase Notes in an aggregate principal amount of up to the GEL equivalent of US$ 45 million upon the occurrence of certain events. IFC received a full allocation of US$45 million equivalent in GEL at the book building. The existing BoG's portfolio includes limited exposure to business activities with potential significant adverse environmental and/or social impacts. It is expected that the E&S risk profile of the prospective portfolio will be very similar. The project has therefore been categorized as FI-2 in accordance with IFC's Sustainability Framework. BoG and its subsidiaries will be required to comply with the IFC Exclusion List, national E&S laws and the IFC's Performance Standards.

The main E&S risk and impact of this proposed project derive from the E&S risks of BoG's lending and financing activities and BoG's capacities and systems in place to manage these risks. BoG is an existing IFC client and as such has met IFC's E&S requirements set by previous projects including implementing an Environmental and Social Management System (ESMS) and assigning an ESMS officer to manage the E&S risks. BoG has significantly improved its ESMS implementation and provides regular E&S training to the staff. The company's current E&S risk management is considered as satisfactory. BoG is found to be generally in line with IFC Performance Standard 2 Labor and Working Conditions on its own HR management. To mitigate inherent risks, the Client will be required to (i) continue to train staff responsible for the ESMS implementation and develop and implement E&S training plan, and (ii) continue to submit an Annual Environmental Report (AEPR) to IFC.

No ESAP is required.