Preparing small business for trade with the EU
In order to bolster economic integration, the EBRD and the EU are preparing firms in Georgia, Moldova and Ukraine to take full advantage of the Deep and Comprehensive Free Trade Area (DCFTA) established by the Association Agreements between each of these countries and the EU, the world’s largest market.
Joint EBRD-EU programmes of activities combine direct and indirect lending with EU-funded technical assistance, investment incentives and risk-sharing activities. An example of direct financing on a risk-sharing basis in 2016 was a joint EBRD-TBC Bank loan of US$ 14.3 million (€13.5 million equivalent) to Rustavi Group in Georgia for the construction of a medium-sized hydropower plant. Among other benefits, the transaction will stimulate competition in the Georgian power-generation sector. The EBRD financing was extended through the Bank’s DCFTA SME Direct Finance Facility and supported by the EU through a risk-sharing facility.
With regard to indirect financing, in 2016 the EBRD signed its first deals under the EU4Business-EBRD credit line, part of the joint programmes of activities. These included a US$ 50 million (€47 million equivalent) facility with Bank of Georgia and a €10 million facility with Mobiasbanca – Groupe Société Générale in Moldova. SMEs in various sectors will use this financing to modernise their production and service standards in readiness for trade with EU clients. In addition, close to 70 enterprises across the three countries benefited in 2016 from EU-funded business advice to help them achieve this goal.