Georgia Bank Resolution Readiness Project

pipeline

The proposed Project is an Investment Project Financing (IPF) with a Deferred Drawdown Option (DDO), with a single component in the estimated amount of USD 35 million. It ensures availability of contingency funds in case an eligible event triggers financing from the Resolution Fund, thereby supplementing the banks' existing annual contributions. The Resolution Fund, managed by NBG as the resolution authority, is the dedicated vehicle for funding bank resolution actions. Under the proposed arrangement, the IPF will remain undrawn during normal times and would be triggered in the event of a bank failure or systemic financial distress. The Project provides bridge financing during the Resolution Fund’s build-up phase, which is expected to reach its target level by end-2032. Its initial duration is up to five years, with a possible renewal for additional three years. The drawdown triggers will be linked to objective criteria. Namely, a decision taken by NBG to (i) place one or more commercial banks into resolution in accordance with the applicable legal framework, and (ii) use the Resolution Fund to carry out the resolution of such commercial bank(s) by making one or more eligible resolution payments. If triggered, Project funds would be disbursed into the Resolution Fund within 7 business days after submitting the supporting documents, depending on the currency denomination of the loan, providing immediate solvency or liquidity support to finance transfer strategies to an acquirer, or direct support to a newly resolved entity, in line with FSB KA burden-sharing rules.