EBRD to provide loan to facilitate cargo flow between Georgian ports and Baku

European Bank for Reconstruction and Development (EBRD) will provide a senior secured loan of up to $4 million (€3.9 million) to co-borrowers, W&E Forward and Alat Bay (Alat Bay Industrial Development AFEZCO LLC), for the construction of a warehouse with a 5,000-tonne storage capacity near Baku, Report informs, citing the bank.

The total project cost is $7,362,500.

The project will facilitate the flow of transit and import-bound cargoes by reducing the cost and time of delivery between the Black Sea ports of Georgia and Baku.

The borrowers will introduce the latest sustainable refrigerator technologies and, as a result, is expected to benefit from an incentive grant of up to 17 percent of eligible costs to be financed by EU NIP under the FINTECC EU4Climate window.

The bank's additionality derives from the tenor and repayment structure of the proposed loan, which is necessary to undertake the capital expenditure program for the warehouse construction. Local banks mainly provide shorter tenor loans with a restrictive repayment schedule, limiting the company's capacity to implement investment programs.

The companies make use of the EBRD expertise over energy and resource efficiency and climate resilience financing via the provision of energy and climate audits, minimum performance standards of technologies, climate-related strategies and policies, monitoring, reporting and verification (MRV) systems.

The borrowers also make use of the EBRD expertise on higher financial standards, including through financial covenants, as well as higher inclusion, gender standards and/or equal opportunities action plans.

West & East Forward LLC (W&E Forward) is an Azerbaijan-based logistics firm operating since 1993.

Alat Bay Industrial Development AFEZCO LLC (Alat Bay) was established in April 2022 for the project. W&E Forward and Alat Bay will act as co-borrowers.