Key Impact Points:
- ADB’s $40 million investment is the largest ever green bond from a Georgian private entity.
- The funds aim to modernize Tbilisi’s water system, ensuring safe water for 1.4 million residents.
- The bond supports climate resilience and boosts confidence in Georgia’s capital market.
The Asian Development Bank (ADB) has invested $40 million in Georgia Global Utilities JSC (GGU) through a certified green bond issuance, marking the largest green bond from a Georgian private corporate entity. This investment aims to enhance the water supply system in Tbilisi and neighboring municipalities, building resilience against climate change impacts on surface and groundwater resources
Background
The financing comprises $20 million from ADB’s ordinary capital resources and another $20 million from Leading Asia’s Private Sector Infrastructure Fund 2 (LEAP 2), managed by ADB on behalf of the Japan International Cooperation Agency (JICA). This investment is part of a larger $300 million, 5-year bond issuance by GGU, which aims to modernize the water supply network in and around Tbilisi, ensuring a reliable water supply for approximately 1.4 million residents.
Current Developments
ADB’s investment is joined by several international financial institutions, including the German development finance institution DEG, the European Bank for Reconstruction and Development, and the International Finance Corporation. The funds will facilitate the modernization of water infrastructure to improve access to safe and reliable water for Tbilisi’s residents.
- Boosting Georgia’s Capital Market:
“ADB’s anchor investment in GGU’s green bond will boost international confidence in Georgia’s capital market and enhance the country’s climate resilience,” stated Suzanne Gaboury, ADB Director General for Private Sector Operations. - Catalyzing Environmental Finance:
Since 2019, ADB has been at the forefront of developing Georgia’s environmental, social, and governance (ESG) thematic-bond market, playing a pivotal role in key transactions, including green, gender, and sustainability-linked bonds. - GGU’s Green Bond Certification:
GGU’s green bond, certified by Det Norske Veritas, adheres to the International Capital Markets Association’s Green Bond Principles, aimed at financing projects that align with climate goals. - Promoting Sustainable Finance:
“GGU’s green bond issuance aims to finance important investments that will improve Georgians’ access to safe and reliable water supply while supporting the country’s adaptation to the adverse effects of climate change,” said Isidoro Marbán, Chief Financial Officer of FCC Aqualia S.A.
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Impact and Implications
ADB’s investment supports several strategic goals:
- Strengthening Climate Resilience:
The modernization of Tbilisi’s water system will enhance resilience to climate change, ensuring a stable water supply for the population and mitigating risks related to surface and groundwater resources. - Advancing Sustainable Financial Instruments:
This landmark transaction promotes the adoption of sustainable financial standards in Georgia and the broader Caucasus region, facilitating future investments in green infrastructure projects. - Supporting Regional Development:
ADB has been instrumental in fostering Georgia’s resilience to climate change, investing over $800 million in the country’s water sector since 2011. This investment aligns with ADB’s broader mission of fostering a prosperous, inclusive, resilient, and sustainable Asia and the Pacific.
Conclusion
ADB’s $40 million investment in GGU’s green bond is a significant step towards modernizing Georgia’s water infrastructure and promoting sustainable development. This initiative not only supports climate resilience but also strengthens Georgia’s capital market, setting a precedent for future green investments in the region.
Call to Action
With ongoing support from international partners and continued investment in sustainable infrastructure, Georgia is well-positioned to enhance its climate resilience and lead by example in the region. Stakeholders are encouraged to participate in and support these transformative efforts, contributing to a more sustainable and resilient future for all.
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