Several development banks have invested in a US$300 million bond offering by Georgia Global Utilities JSC (GGU), a water utility and renewable energy holding company in Georgia, to support its enhancement of the water system in Tbilisi and neighbouring municipalities.
The certified green bond is the largest ever issued by a Georgian private corporate entity.
The Asian Development Bank (ADB) subscribed to US$40 million of the bonds, including US$20 million from ADB’s ordinary capital resources and US$20 million from Leading Asia’s Private Sector Infrastructure Fund 2 (LEAP 2), administered by ADB on behalf of the Japan International Cooperation Agency (JICA).
German development finance institution DEG, the European Bank for Reconstruction and Development (EBRD), and the International Finance Corporation (IFC) are also investing in the bonds.
GGU is owned by Aqualia Georgia LLC and Georgia Capital JSC, one of Georgia’s largest and most diversified investment companies. Aqualia Georgia is a subsidiary of a leading Spanish water company, FCC Aqualia, which operates in 18 countries.
Fund catalyst
The five-year bonds are certified by Det Norske Veritas and comply with the International Capital Markets Association’s Green Bond Principles. The Eurobonds are listed on the Euronext Dublin.
The funds will be used to modernize the water supply network in and around Tbilisi, ensure a potable water supply for about 1.4 million residents, and address key environmental challenges such as water losses.
“ADB’s anchor investment in GGU’s green bond will boost international confidence in Georgia’s capital market and enhance the country’s climate resilience,” says ADB director general for private sector operations Suzanne Gaboury. “This investment marks the beginning of a new partnership with FCC Aqualia, and strengthens our relationship with Georgia Capital. ADB is committed to supporting developing member countries in mobilizing domestic and foreign private capital for bankable and impactful development projects.”
The EBRD invested US$40 million in the green bond, the first under the EBRD Green Cities, a programme that has already supported eight projects in Tbilisi through the bank’s flagship Green City Action Plan.
To date, the EBRD has invested more than €5 billion (US$5.4 billion) in 299 projects in the financial, corporate, infrastructure, and energy sectors in Georgia, with 82% of those investments in the private sector.
Since 2011, ADB has invested over US$800 million in Georgia’s water sector, contributing to the country’s resilience to climate change.
LEAP 2 is an ADB-managed fund with a US$1.5 billion commitment from JICA. It focuses on sustainable private sector infrastructure projects that reduce carbon emissions, improve energy efficiency, and provide affordable health care, education, and communication services to ADB’s developing member countries. The LEAP 2 investment in GGU’s bond issuance is its second transaction since the fund's replenishment in December 2023.
Photo: The investment will ensure a potable water supply for about 1.4 million residents. (ADB)
