GREEN ECONOMY AND ACCESS TO FINANCE IN GEORGIA (GOING BEYOND THE COMMERCIAL BANKING SECTOR TO FINANCE BUSINESSES IN GEORGIA)

Abstract

  This research will explore other possible financial vehicles that go beyond traditional sources of private capital offered by commercial banks. It will look at international experience and the opportunities to use public support, green bonds to raise green finance as well as the work of energy service companies (ESCOs) to finance green investments.
  We have offered our view of what should be done in fact (not in paper in Georgia as it has been in the past 15 years) to change the situation and end the negative and harmful monopoly of the commercial banks and the National Bank of Georgia and to have in place the two independent sources to attract and invest resources in Georgia.
  This will increase the capitalization of the country and is a proven way to eradicate the country›s lagging and accelerate economic growth.

Why should we focus on this issue?

1. According to WHO›s latest data, over 7 million people die each year because of breathing air with solid particles, and one of its main pollutants is vehicles. (Cereceda Rafael, Cuddy Alice. 2018.....)
2. Georgia’s Capital - Tbilisi - is occupying the 3rd place in the light of air pollution,
3. Due to the critical situation, the public demand to live in a clean ecological environment, day by day increases.

In our research the following Questions are discussed and overviewed:

• Is it important to act on the issues of Georgia›s position on the global scale?
• What unique components can be used to prolong the average life of people?
• What investors do the country need for building eco-projects and their realization?
• What type of ecofriendly technologies can be developed for potential customers in Georgia?

In that field we have studied the following:

• The links between economic growth, green growth (e.g. clean energy), high living standards and capital markets;
• Why the Commercial Banks are the main and the only source of finance for green (and not only) investments in Georgia;
• Situation on capital markets of Georgia (stock and bond markets) - as an indicator of economic growth and an alternative source of financing;
• Possible benefits of non-bank financing, including for clean energy projects and the SME sector (e.g. small hydro, energy efficiency);
• The role of government in supporting capital market development;
• The role of international community (donors, IFIs, international organization) to support Georgia’s efforts to develop capital markets