Georgia Capital's Renewable Energy Business Issues $80 Million Green Bonds

Georgia Capital's renewable energy business is planning to issue its first green secured bond worth $80 million on the local market.

The estimated annual interest rate of the bonds is 6.25%-7.50%, and the maturity is 5 years. The group places at a lower rate (GGU's coupon rate was 7.75%).

According to the company, the issue will significantly contribute to the development of the capital market of Georgia, as the first green secured bond issue in the capital market of Georgia and the largest corporate transaction. Existing and new strong creditors, the largest financial institutions, including ADB, FMO and IFC, have expressed interest in the issue.

The energy business of "Georgia Capital" owns assets in the renewable energy sector of 71 MW. with total installed capacity. The company will use the funds received from the bond issue to cover existing liabilities and to implement the long-term development strategy. The company's current liability is a loan from the parent company (GCAP), which the company used to cover part of the $250 million Eurobond issued by GGU (Georgia Global Utilities) in 2020, about $95 million of which was allocated to the renewable energy business (closed in the summer).

As you know, before that, Georgia Capital attracted the strategic investor Aqualia in the water and wastewater business included in the holding.

In December, GCAP announced the sale of 80% stake to Aqualia for half a billion GEL ($180 million) and the separation of businesses accordingly. Retained the energy asset as a whole and 20% of the utility water supply business.

The company is involved in the capital market support program funded by the European Union and implemented by the EBRD's capital and financial market development teams. The project aims to develop the local capital market in Georgia through educational activities and a co-financing scheme of local issuers, which includes grant funding of 100,000-200,000 GEL. One of the main priorities of the program is the promotion of ESG-related securities in the local market by primary issuers.

21 companies have submitted applications for participation in the program, the winners already know the results and will be announced to the general public later.