The Trade and Forfaiting Review (TFR), a leading trade and supply chain finance information publication, named a TBC Bank transaction as one of world’s top 15 deals in 2014.
For TBC Bank, the winning transaction was a Letter of Credit issued for the import of the artificial snowmaking equipment, which enabled Georgian Mountain Resorts Development Company to make skiing at two popular Georgian ski resorts, Gudauri and Bakuriani, possible regardless of the volume of snow fall.
Clarissa Dann, the editor of Trade & Forfaiting Review, said the TBC Bank deal was a “shining example” of how banks can use letters of credit to “transform” local economies.
“This deal was a shining example of how a letter of credit, a crucial trade finance instrument, could transform a local economy, bringing much-needed forward bookings to the Gudauri Ski Resort. It was so good to see the EBRD and Raiffeisen Bank’s support in such a transforming project. When we saw this entry, the judges and I knew that this was something special – and it made us want to come skiing in Georgia!” Dann said.
Alexandre Onoprishvili, the head of the Georgian Mountain Resorts Development Company, credited TBC Bank with making the deal possible.
“TBC provided the consultancy-based services that the Georgian government was looking for during the negotiation of the contractual terms of the project, including the terms of the actual financing. This was an LC for €2.28m with post-financing to cover the import of the artificial snowmaking equipment. The interest-rate was very low,” he said.
“We have long time business relations with TBC Bank and this was one of the main reasons why we turned to TBC for supporting the unprecedented project for Georgia. This equipment enabled us to start the season early last year, in the middle of December. This resulted in a historic number of tourists: in Gudauri alone, the number of visitors increased by 40% compared to the previous best winter season in 2012.”
TBC Bank supports tourism
Strong tourism growth translates into the country’s ability to improve its economy by adding jobs, attracting investment and raising its international image. The EU Association Agreement presents further economic opportunities- especially in tourism, which is one of the government’s target strategic sectors.
According to 2012 figures, data from the National Tourism Administration Tourism accounted for 7% of national GDP and 58% of the revenue from Georgian services. Approximately 170,000 people were employed in the sector – nearly 10.3% of all jobs in the country.
“The sector is one of the top priorities for the government” noted Davit Tsiklauri, the head of TBC Corporate Banking. Tsiklauri added that the TFR award recognized TBC Bank for supporting an economic area that is vital for the country’s development. “This award shows TBC that the bank is moving in the right direction”, Tsiklauri said.
Corporate Banking represents 34% of the Bank’s total loan portfolio and 25% of the total deposits portfolio as at March 2015. TBC Bank serves approximately 1,500 corporate clients in Georgia, offering a wide range of products, including balance sheet finance, trade finance, asset finance, working capital, syndicated loans and project finance. Under project financing, TBC Bank provides medium to long term loans to finance the purchase of equipment, acquisitions, construction, as well as expanded production, administrative and trade facilities.