The Asian Development Bank (ADB) and Joint Stock Company Georgia Capital (GCAP) partnered to issue GCAP’s inaugural sustainability-linked bond. As a strategic investor, ADB provided foundational support to adopt 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.
“This investment builds on ADB’s commitment, as Asia and the Pacific’s climate bank, to develop capital markets in ADB’s developing member countries through innovative and path finder issuances, especially in the climate and sustainability space,” said ADB Director General for Private Sector Operations Suzanne Gaboury. “ADB’s long-standing partnership with GCAP provided the opportunity to propose the issuance of this sustainability-linked instrument. The sheer size of this issuance and the healthy private sector demand it managed to generate, is expected to spur further climate-related bond issuances in Georgia and throughout 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 critical to GCAP achieving its goal of being net zero in its operations 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 emissions to 35% below 1990 levels by 2030. This landmark transaction has mobilized an unprecedented $83 million of private sector investors for a Georgian-listed corporate bond.
“Georgia Capital has pioneered corporate commitments to net zero, and we continue to support our country’s efforts to transition to a carbon-neutral economy,” said Georgia Capital Chairman and Chief Executive Officer Irakli Gilauri. “This bond will also support the development of the local capital market and promote the use of sustainable finance instruments and standards in the region. It will enhance our financial flexibility and provide an opportunity to continue with substantial deleveraging. We are thankful for ADB’s support and look forward to further collaboration on climate investments.”
GCAP is one of the largest private investment companies in Georgia. Its diversified portfolio includes investments and operations in banking and insurance, health care, renewable energy, water utility services, education, and housing and hospitality. Georgia Capital PLC, the parent company of GCAP, is listed on the London Stock Exchange. ADB and Georgia Capital’s portfolio companies have worked together in several transactions since 2019.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.
