MICROCAPITAL BRIEF: Green for Growth Fund (GGF) Loans $1.5m to Microfinance Organization Crystal of Georgia

The Green for Growth Fund (GGF), a Luxembourg-based lender to projects deemed beneficial to the environment, recently loaned USD 1.5 million to Joint Stock Company Microfinance Organization Crystal, a microfinance institution primarily serving microentrepreneurs and farmers in rural Georgia. Crystal plans to use the proceeds to finance energy projects that reduce carbon dioxide emissions or energy consumption. For instance, individuals and enterprises can borrow funds to install solar panels or improve building insulation. GGF expects the transaction to yield annual energy savings of 2,600 megawatt-hours and a reduction in carbon dioxide emissions of 910 metric tons per year. Archil Bakuradze, Crystal’s Executive Chairman, said, “this facility will enable Crystal to further expand its green portfolio, underpinned by our good distribution network and increasingly popular green solutions for micro and small businesses, small-holder farmers and households.”

Established in 1998 and headquartered in the city of Kutaisi, Crystal provides remittances; bill-payment services; and loans for enterprise, farming, housing and consumption. The microlender is 48-percent held by the Georgian NGO Crystal Fund, 38-percent by the agRIF fund of Belgium’s Incofin, 13-percent by a fund of US-based Developing World Markets and 2-percent by managers of Crystal. As of June 2017, it reported total assets of GEL 187 million (USD 77 million) and outstanding loans of GEL 162 million (USD 67 million). It services 80,000 customers via 59 branches in the country.

Created in 2009 by the EU’s European Investment Bank and Germany’s KfW Development Bank, GGF focuses on extending the use of renewable energy sources and enhancing energy efficiency in 19 countries in Southeast Europe, the Middle East and North Africa. GFF’s investors include the Church of Sweden, the World Bank Group’s International Finance Corporation, the Netherlands Development Finance Company (also known by its Dutch acronym FMO) and Germany’s Gemeinschaftsbank fur Leihen und Schenken (GLS) Bank. As of March 2018, GFF reported an investment portfolio of EUR 385 million (USD 474 million) outstanding to 49 enterprises in 19 countries. From its inception through March 2018, 31 percent of its loan funds have been on-lent to households, 30 percent to service-based businesses and 22 percent to manufacturers.

By Nicholas Galimberti, Research Associate

Sources and Additional Resources

GGF press release
http://www.ggf.lu/pressnews/detail/ggf-and-crystal-partner-to-expand-energy-efficiency-financing-in-georgia/

Crystal background
https://ir.crystal.ge/company-profile/

Crystal financials
https://ir.crystal.ge/wp-content/uploads/2017/12/JSC-Crystal-Final-prospectus.-26122017.-ENG-1.pdf

GGF background
http://www.ggf.lu/about-green-for-growth-fund/

MicroCapital Brief; July 8, 2018; Green for Growth Fund (GGF) Loans $7m to Microfinance Institutions (MFIs) Partner Microcredit Foundation, Mi-Bospo for Energy Efficiency Financing in Bosnia and Herzegovina
https://www.microcapital.org/microcapital-brief-green-for-growth-fund-ggf-loans-7m-to-microfinance-institutions-mfis-partner-microcredit-foundation-mi-bospo-for-energy-efficiency-financing-in-bosnia-and-herzegovina/

MicroCapital Brief; January 25, 2018; Microfinance Organization Crystal of Georgia, VisionFund’s Monte Credit of Montenegro Borrow $3.6m from Grameen Credit Agricole Foundation
https://www.microcapital.org/microcapital-brief-microfinance-organization-crystal-georgia-visionfunds-monte-credit-montenegro-borrow-3-6m-grameen-credit-agricole-foundation/

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