GGU, a holding company managing water supply and energy facilities in Georgia, has placed $300 million in “green bonds” on the Irish stock exchange EURONEXT Dublin.
GGU is the first company to reopen international capital markets for Georgian companies after a slowdown in international capital market activity in May and June 2024. The yield on the six-year green bonds was set at 8.875%, and the issue and placement price was set at 100% of the nominal value. Interest from foreign and Georgian investors exceeded the issue volume by approximately 60%.
The lead manager for the placement of the transaction is J.P. Morgan. The co-managing investment banks are TBC Capital and Galt & Taggart. Latham & Watkins, Baker & McKenzie LLP, BLC Law Office and Dentons were legal advisors to J.P. Morgan and GGU in the transaction, and EY acted as auditor.
The bond proceeds will be fully allocated to the company’s strategic green projects, with proceeds used to finance new green capital investments and repay existing liabilities. GGU’s green financing framework has been approved by DNV, a leading ESG research and analytics company.
“I am pleased to announce the successful issuance of our second public green bond. GGU is the first private company in Georgia to issue green bonds in 2020. We continue on this path and, with our commitment to environmental responsibilities, maintain our status as a leading company. The proceeds from the bonds will be used to refinance GGU’s existing loan portfolio, as well as to finance capital investments in the water supply sector. This transaction will significantly improve the company’s financial profile and liquidity, which will help us develop a healthy and sustainable business.
I would like to express my special gratitude to our partners, international financial institutions, for their support – the International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB) and the German Development Finance Institute (DEG)” – said GGU CEO Jose Miguel Santos Gonzalez.
“The size, price and investor base of the transaction are a testament to GGU’s strong financial position and significant growth potential. The company’s securities have attracted significant interest from retail investors and international financial institutions in both the local and international markets. I am pleased that Galt & Taggart was actively involved in the successful implementation of such a significant transaction,” said Ketevan Toidze, Deputy Director of Galt & Taggart, in evaluating the bond issue.
“We congratulate GGU on the successful issuance and placement of its green bonds, which attracted great interest from international and local investors. We are pleased that TBC Capital was the co-manager of both the company’s second and first green Eurobonds. The placement of the second green bond on the international market underlines GGU’s long-term interest in sustainable development. The financial resources obtained as a result of the bond issue will not only improve the company’s financial position, but will also contribute to the implementation of even more green initiatives and projects in the market,” said Meri Chachanidze, Managing Director of TBC Capital.
According to the rating company Fitch, GGU’s rating is BB- (Outlook Stable), while according to S&P Global, it is BB- (Creditwatch Positive).
Georgia Global Utilities (GGU) is a company that manages the water supply systems (GWP) and energy facilities of Tbilisi, Mtskheta and Rustavi. GGU also owns several hydroelectric power plants with a total installed capacity of 149 MWh, including the Zhinvali hydroelectric power plant, which is the second largest reservoir hydroelectric power plant in Georgia. Since 2022, the company’s 80% share has been owned by the Spanish company FCC Aqualia, one of the largest representatives of the European water supply market, and 20% is owned by the investment holding “Georgian Capital”.
