Tegeta Holding issued green bonds of GEL 20 000 000 - the first green issue in national currency
Tegeta is the first company in the history of the automotive industry across the region to issue green status bonds
The Asian Development Bank is a major investor in green bonds
The issue was supported by TBC Capital
GEL 20 000 000 mobilized as a result of the issue will be used for the Holding’s green initiatives
“Tegeta Holding” - the leader of the automotive industry, successfully placed “green bonds” in GEL on the Georgian capital market for the first time. Securities valued at GEL 20 million were issued, which is the largest GEL-denominated transaction of green bonds on the local stock market and the first precedent for GEL-denominated green bonds. The price of bonds was determined by TIBR6m+3.5%.
The full repayment of the principal amount of the bonds is expected after 2 years and 6 months, and the coupon interest rate will be paid semiannually.
The securities investor is the Asian Development Bank. The International Financial Institution will make direct foreign investment in the Holding. The amount mobilized as a result of the bond issue will be entirely used for green projects, which emphasizes Tegeta’s long-term interest in sustainable development.
Vakhtang Kacharava - Executive Director of Tegeta Holding: “This is not the first time when Tegeta sets a precedent in the auto industry - in this case, our company is the first to issue green bonds in the automotive business across the region, and we are also the first in the Georgian capital market to issue green securities in national currency.
Issuance of green bonds is very close to our corporate social culture. Within the framework of the existing issue prospectus, the company undertakes to further develop the ecological transport segment. This provides for the sale of diversified electrified vehicles and the arrangement of the corresponding infrastructure, which will be intended for wide consumption. It should be noted that the Holding’s green bonds were fully purchased by the Asian Development Bank, which shows that the large financial institution considers Tegeta as a future partner.”
At the preparatory stage of the issue, “Tegeta Holding” developed a framework of green bonds, explicitely expressing the company’s position on creating an ecologically clean environment. Based on the framework document, Tegeta obtained other-party opinion from Sustainalytics - a leading international ESG research and analytics provider. The framework document describes the obligations that the company must fulfil within the timeframe provided by the prospectus:
Import and sale of light, passenger and other types of electrified transport.
Setting up an extensive network of charging stations across the country (total of 70 charging stations) to create an affordable electric ecosystem with adequate charging infrastructure, thereby making EV ownership easier.
For greater transparency of the processes, the Holding will submit a report on the fulfilment of obligations to the bond investor - the Asian Development Bank.
Suzanne Gaboury - General Director of the Private Sector Operations Department of the ADB: “The Asian Development Bank (ADB) is the bank tailored to the Asia-Pacific region climate, and this investment is part of ADB’s support for the development of Georgian capital markets in the form of climate and gender bonds. This is the first green bond issue in Georgia denominated in local currency, and we expect it to further facilitate the issuance of more green bonds in Georgia and the South Caucasus.”
Dentons is a legal advisor of strategic investors. TBC Capital was a partner and supporter of “Tegeta Holding” within the framework of the green bond transaction.
Mari Chachanidze - Managing Director of TBC Capital: “We are glad that the first green bonds both in the history of the region’s automobile industry and in national currency were placed with the support of TBC Capital. This issue is the 3rd successful placement for Tegeta Holding and TBC Capital, and the 5th placement of green bonds for TBC Capital, which underlines our and, in general, the TBC Group’s contribution to and interest in sustainable development. Global issue of ESG and green bonds is growing at a rapid pace. More and more investors are committing to increasing the proportion of green bonds in their portfolios. Therefore, it is important for Georgia and Georgian companies to be participants in this trend in order to awake interest both for local and international investors in the instruments of the Georgian capital market in the future”.
For information, ‘Tegeta” carried out the first successful issue in 2019 and placed bonds of GEL 30 million. A significant part of them was purchased by the European Bank for Reconstruction and Development.
At the end of last year, the company made the largest issue of local corporate GEL-denominated bonds in the history of Georgia and issued bonds valued at GEL 150 million.
A few months ago, Tegeta placed securities equivalent to 25 million dollars. Tegeta also offered bonds to individuals within the framework of the said issue.