GGU Green Bond

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  The proposed IFC investment consists of a subscription of up to US$60m into a US$300m, five-year green bond (“GGU 2024 Green Bond”, the “Project”). The issuer is Georgia Global Utilities JSC (“GGU”, the “Company”, the “Issuer”), the largest privately-owned water supply and wastewater utility company in Georgia. The Company owns and operates water and wastewater infrastructure assets and four hydro power plants (HPP) linked to water supply with total capacity of 149 megawatts (MW) generating electric power for GGU’s own consumption as well as for third-party sale. GGU's water supply and sanitation business serves the capital city of Tbilisi, surrounding cities of Rustavi and Mtskheta, and other nearby villages, serving a total of 1.4 million people. GGU owns several entities, including Georgian Water and Power LLC (GWP), which is the largest subsidiary responsible for supplying water to Tbilisi residents. GWP owns four main assets: Zhinvali HPP (130 MW), Tetrikhevi HPP (12.4 MW), Bodorna HPP (2.5 MW), and Saguramo HPP (4 MW) and operates 4,000 km of drinking water distribution pipeline and 1,500 km of wastewater pipeline. Additionally, as part of the GWP company, there are Mtskheta and Rustavi Water LLC,  which are the utility companies operating near Tbilisi. Gardabani Sewage Treatment Plant LLC is responsible for treating water collected by GWP. Aqualia, a Spanish water management company, is the sponsor and majority (80%) owner of the Company. Aqualia specializes in water infrastructure operation and acts as an EPC contractor for water collection, purification, and treatment. The remaining 20% ownership is held by Georgia Capital PLC, a UK-listed holding company focused on investing and developing businesses in Georgia through its subsidiary Georgia Capital JSC, which is an IFC client since 2023. Proceeds of the proposed bond issuance will be used to (i) refinance US$200 million of the Company’s current shareholder loans to allow GGU to put in place a sustainable capital structure following its acquisition by FCC Aqualia, and (ii) finance US$100 million of the Company’s 2024-2026 capital expenditures program. GGU will allocate the net proceeds from the issuance of Green Financing Instruments exclusively to finance or refinance expenditures that meet the eligibility criteria outlined in the Green Bond Framework  (see https://www.ggu.ge/green-bonds) . The main objectives are to maintain existing assets to extend their lifespan, minimize water losses, address repairs as needed, and expand the network to accommodate a larger customer base. The new planned connections will be within GGU's existing service area, which is limited to the Tbilisi-Mtskheta-Rustavi agglomeration. It is important to note that the use of proceeds (both finance and refinance components) explicitly excludes any works related to GWP’s HPPs and Gardabani WWTP.