The Asian Development Bank (ADB) and Joint Stock Company Georgia Capital (GCAP) partnered to issue GCAP’s inaugural sustainability-linked bond. ADB, as a strategic investor and innovator, provided the foundational support for this innovative instrument. This is ADB’s first subscription to a private sector sustainability-linked bond.
GCAP’s total issuance of $150 million with a 5-year tenor is the largest bond listed on the Georgian Stock Exchange and the largest sustainability-linked issuance in Georgia and the Caucasus, to date. ADB will invest $16 million, and the proceeds will be earmarked for refinancing renewable energy and education investments, and for financing corporate measures to achieve the group’s sustainability-linked key performance indicator.
Suzanne Gaboury, ADB Director General of Private Sector Operations, said: “This investment builds upon ADB’s commitment as Asia and Pacific’s Climate Bank to develop capital markets for ADB member countries in developing countries, through innovative and pathfinder issuances in the climate and sustainable space, in particular.” “ADB’s long-standing partnership with GCAP provided the opportunity to propose the issuance of this sustainability-linked instrument. The sheer size of the issuance, and the healthy demand generated by the private sector, will likely spur more climate-related bond issues in Georgia and the Caucasus region.”
Sustainability-linked bonds are forward-looking, performance-based debt instruments with climate-related objectives that are measured through predefined key performance indicators and are assessed against sustainability performance targets. Second-party opinion on the credibility of bonds issued was provided by Sustainalytics, based on the issuer’s sustainability-linked bond framework which is aligned with the International Capital Markets Association’s Sustainability-linked Bond Principles.
This issuance is crucial for GCAP to achieve its goal of being at net zero by 2050. A key feature of the sustainability-linked bond is GCAP’s commitment to reduce its greenhouse gas emissions by 20% by 2027 compared to the 2022 baseline. This will also support Georgia’s commitment under the Paris Agreement, to reduce GHG emission to 35% below 1990 by 2030. This landmark transaction mobilized $83 million in private sector investment for a Georgian listed corporate bond.
“Georgia Capital is a pioneer in corporate commitments towards net zero and we continue to support the efforts of our country to transition to a CO2-neutral economy,” stated Georgia Capital Chairman and CEO Irakli Gilauri. This bond will also promote the use and development of sustainable finance standards and instruments in the region. It will increase our financial flexibility, and give us the opportunity to continue deleveraging. We are grateful for ADB’s assistance and look forward to future collaboration on climate investment.”
GCAP is one the largest private investment firms in Georgia. Its portfolio is diversified and includes investments and operations across a range of industries, including banking and insurance; health care; renewable energy; water utility services; education and housing and hospitality. Georgia Capital PLC is the parent company of GCAP and is listed on London Stock Exchange. ADB and Georgia Capital portfolio companies have collaborated in several transactions since 2019.
ADB is committed in its efforts to eradicate poverty and achieve a prosperous, inclusive and resilient Asia and Pacific. It was founded in 1966 and is owned by 68 member countries, 49 of which are from the region.
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