EFSE launches investment activities in Georgia

Bank of Georgia and EFSE sign a loan agreement of US$ 50 million

Frankfurt am Main and Tbilisi, November 11, 2010 – The European Fund for Southeast Europe (EFSE) and Bank of Georgia, Georgia’s leading universal bank (or the “Bank”) signed today a senior loan agreement of USD 50 million. This loan will contribute to expanding the housing and micro and small enterprise (MSE) lending operations of the Bank. It is the first investment EFSE has made in Georgia.

This investment is a strong indication of the EFSE’s confidence in the sustainable economic development of the country. The loan addresses the need for micro and small enterprises as well as private households to have long-term and stable access to finance. With the funding from EFSE Bank of Georgia will create financial opportunities for about 2,000 MSEs and over 600 private households.

With a market share of 34.2 percent in terms of assets (as of September 30, 2010) and a strong branch network across the country, Bank of Georgia is the largest bank in Georgia and one of the leading providers of MSE and housing finance in the country.

Dr. Klaus Glaubitt, Chairman of Board of Directors of EFSE, said: “We are entering the Georgian market in challenging times, but we are confident that our long-term funding will pave the road to other investors. In this endeavor, EFSE is partnering with Bank of Georgia, one of the leading financial institutions in the country”.

“I am delighted to welcome EFSE to the group of our lenders. This partnership with an experienced lender within Europe and CIS countries such as EFSE, will allow us continue expanding our mortgage and MSE lending, thereby serving these rapidly-growing segments and will further increase our competitiveness. I look forward to doing more with EFSE in the future,” noted Irakli Gilauri, Chief Executive Officer, Bank of Georgia.

About the European Fund for Southeast Europe (EFSE)
The development finance fund European Fund for Southeast Europe (EFSE) is aimed at fostering economic development and prosperity in Southeast Europe, including: Albania, Armenia, Azerbaijan, Belarus, Bosnia and Herzegovina, Bulgaria, FYR Macedonia, Georgia, Kosovo, Moldova, Montenegro, Romania, Serbia and Ukraine. It offers long-term funding instruments to local financial institutions for on-lending business loans to micro small and medium-size enterprises as well as housing loans to low-income private households. The investment activities of EFSE are supported by the EFSE Development Facility, which provides funding for technical assistance, consulting and training to partner lending institutions as well as awareness raising and market enabling activities. Overall, since its inception in December 2005, EFSE has offered EUR 822 million in financing to commercial banks, microfinance institutions and non-financial institutions, facilitating a total number of more than 238,000 micro and small enterprise and housing loans. Initiated by KfW (The German Development Bank), the EFSE is a Public-Private Partnership that combines funds from various private investors, European governments an international financial institutions, including: European Commission, Federal German Ministry for Economic Development and Cooperation (BMZ), the governments of Austria, Switzerland, Denmark and Albania, KfW, IFC, FMO Netherlands Development Finance Company, European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Oesterreichische Entwicklungsbank (OeEB), Deutsche Bank and Sal. Oppenheim. EFSE is privately managed with Oppenheim Asset Management Services S.à r.l., Luxembourg, as the fund manager and Finance in Motion GmbH, Frankfurt/Main, Germany, as the fund advisor.

For further information about EFSE, please visit: www.efse.lu

About Bank of Georgia
Bank of Georgia is the leading Georgian bank offering a broad range of corporate banking, retail banking, wealth management, brokerage and insurance services to its clients in Georgia, Ukraine and Belarus. Bank of Georgia is the largest bank in Georgia by assets, loans, deposits and equity, with 34.2% market share by total assets (all data according to the NBG as of 30 September 2010). The bank has 137 branches and more than one million retail and 171,052 corporate current accounts.

For more information, please visit: www.bog.ge/ir

Media contact

European Fund for Southeast Europe Mr. Samir Djikić Tel: +49 (0)69 / 977 876 50-26 E-mail: press@efse.lu

Bank of Georgia Sophie Balavadze Tel: +99 532 44 42 48 E-mail: sbalavadze@bog.ge