Subcomponent for financing the food and energy efficient industries
1. Within the subcomponent, loans are issued for the establishment of new enterprises and the expansion/modernization of existing enterprises.
2. The total amount of loan(s) issued to a single beneficiary under the subcomponent must not be less than 1,500,000 GEL and must not exceed 10,000,000 GEL.
3. If a loan approved by a commercial bank meets the criteria defined by this subcomponent but exceeds the maximum loan amount established by the subcomponent, the annual interest rate set by the commercial bank will be determined by a decision of the Government of Georgia.
4. In the case specified in paragraph 3, the entrepreneurial entity shall submit a justified request to the agency for co-financing the annual interest rate of the loan approved by the commercial bank under the program. The agency will then submit the matter for review to the Government of Georgia through the Ministry of Environmental Protection and Agriculture of Georgia.
5. Within the subcomponent, loans are issued for the following purposes:
a) Financing of primary agricultural enterprises:
a.a) Greenhouse farming of vegetables, berries, herbs, and mushrooms;
a.b) Pig farming;
a.c) Poultry farming;
a.d) Fur animal farming;
a.e) Fish farming;
a.f) Beekeeping production;
a.g) Seedling and nursery farms;
a.h) Orchards, vineyards, plantations, and other perennial agricultural crops (seedling purchase is allowed only from local nurseries defined by the "Plant the Future" state program and/or through imports).
b) Financing of agricultural processing enterprises:
b.a) Processing of fruits, berries, vegetables, mushrooms, and citrus;
b.b) Processing of walnuts, hazelnuts, peanuts, and other nuts;
b.c) Processing of wool and leather;
b.d) Processing of laurel, tea, and tobacco;
b.e) Processing of meat and dairy products;
b.f) Production of vegetable oils (oil, margarine, butter) and frying products;
b.g) Production of essential oils and spices;
b.h) Establishment of slaughterhouses;
b.i) Processing of beekeeping products;
b.j) Production of animal, poultry, and fish feed for agricultural purposes;
b.k) Production of wine and alcoholic beverages from processed grapes (this purpose is eligible for loans until July 31, 2020).
c) Financing of infrastructure enterprises:
c.a) Storage facilities for agricultural products;
c.b) Grain dryers;
c.c) Refrigerated storage facilities for agricultural products.
d) Loans obtained under the subcomponent can finance the following activities:
d.a) Repair and arrangement of existing buildings;
d.b) Construction and arrangement of new buildings;
d.c) Purchase and installation of technological lines, climate control equipment, freezing equipment, power generators, irrigation systems, milking machines, feed preparation equipment, and others;
d.d) Connection to water, electricity, and natural gas supply sources and sewage systems;
d.e) Fencing of agricultural facilities, installation of security systems;
d.f) Purchase and installation of storage chambers, racks, tanks, and other storage-related technological equipment;
d.g) Purchase of special machinery and attachments necessary for enterprise operation (e.g., forklift, manure spreader, feed mixer-distributor, and others);
d.h) Purchase of breeding and high-yielding livestock (excluding large livestock), poultry, fish, and fur animals;
d.i) Construction and arrangement of fish ponds and tanks;
d.j) Establishment, cultivation, and restoration of perennial crops, including:
d.j.a) Stone fruit and pome fruit varieties;
d.j.b) Nut crops;
d.j.c) Berry crops;
d.j.d) Citrus and other subtropical crops;
d.j.e) Tea, laurel, and other technical crops;
d.j.f) Timber-yielding and fast-growing plant species.
d.k) Energy-efficient enterprises:
d.k.a) Production of energy-efficient stoves;
d.k.b) Enterprises producing fuel for energy-efficient stoves.
d.l) Purchase, installation, and arrangement of renewable energy sources.
d.m) Purchase of meteorological stations for agricultural facilities.
6. Within the subcomponent, the received loan(s) cannot be used to finance the following activities:
a) Purchase of land;
b) Purchase of existing agricultural buildings, greenhouses, and others;
c) Purchase or repair of agricultural machinery (tractors, combines, etc.), as well as attachments (plows, harrows, seeders, fertilizer spreaders, etc.);
d) Purchase or repair of transport (except for specialized machinery and attachments, machinery and implements, transport integrated with non-stationary technological lines), flying (except for agricultural unmanned aerial vehicles (AgroDrones) for spraying purposes and agricultural unmanned aerial vehicles (AgroDrones) for agronomic scanning purposes), and floating means;
e) Construction, repair, or equipping of office space only.
7. Under the program, the commercial bank issues loans:
a) For financing fixed assets – not less than 80% of the total loan amount;
b) For financing working capital – not more than 20% of the total loan amount.
8. The enterprise funded within the subcomponent must meet the following minimum requirements:
a) Compliance with safety, environmental protection, sanitary, and food safety requirements established by Georgian legislation;
b) The enterprise's buildings and adjacent areas must have an aesthetically pleasing appearance.
9. The annual interest rate on loans issued by the commercial bank within this subcomponent is determined as follows:
a) From 1,500,000 GEL to 3,000,000 GEL – not exceeding the refinancing rate set by the National Bank of Georgia plus 5% per annum;
b) From 3,000,000 GEL to 10,000,000 GEL – not exceeding the refinancing rate set by the National Bank of Georgia plus 4% per annum.
10. The agency will co-finance the interest on the loan issued within the subcomponent for no more than 36 months at an annual rate of 11%, within a maximum period of 38 months from the date of loan issuance.
11. The loan issued by the commercial bank under the subcomponent will be secured by the agency up to 50% of the loan’s principal amount but not exceeding 2,500,000 GEL. This does not apply when the credit is issued for the expansion/modernization of an existing enterprise. This secondary guarantee will be valid for no more than 38 months from the date of loan issuance. The commercial bank can use the secondary guarantee only after fully realizing the primary security and submitting a corresponding written request to the agency. If, after realizing the primary security, the commercial bank does not recover 100% of the remaining principal loan amount under the program, the agency will cover the shortfall up to 50% of the remaining principal loan amount but not exceeding 2,500,000 GEL. The secondary guarantee will not be issued to a financial institution if the loan is already covered by any credit-guarantee mechanism of another program/project.
12. The lender must primarily require any asset (fixed assets, inventories, etc.) created and/or acquired by the new enterprise as loan security, and only after that, if necessary, require additional collateral.
13. The loan issuance commission fee by the commercial bank within this subcomponent must not exceed 0.2%.
14. Within the subcomponent, only refinancing of loans issued under the same subcomponent is allowed, provided that the amount of co-financing, the principal amount, and the loan term do not increase.
15. Parallel loans are allowed within the subcomponent, provided that the total amount of parallel loans does not exceed the maximum loan limit set for one participant in the subcomponent and that each parallel loan is not below the minimum limit amount (the total amount of loans and leasing issued under the Preferential Agrocredit fixed assets subcomponent for food industry financing and the Preferential Agroleasing subcomponent for food industry financing must not exceed 10,000,000 GEL).
16. In the case of loan refinancing, the commission rate established by the National Bank for such cases will apply.
17. Loan restructuring within the subcomponent is allowed only if the total amount of co-financing initially approved by the agency for the loan does not increase, as determined under the original loan terms.
18. In case of early loan repayment, the beneficiary will not be charged a prepayment commission or penalty by the commercial bank (this does not apply to loans issued using financial resources allocated by the EBRD).
19. If the amount specified in the repayment schedule is not paid within the designated period, the commercial bank is authorized to charge a penalty only on the overdue principal amount. Such a penalty must not exceed 0.1% of the overdue principal amount for each overdue day.
20. The agency monitors the fulfillment of obligations by program participants and the targeted expenditure of loans issued within the subcomponent. The time and form of monitoring are determined by the agency. If a violation of the conditions set by the project is confirmed, the agency will act in accordance with agreements made with commercial banks and program participants, as well as the agency’s established rules and procedures. Additionally, the program participant is required to fully utilize each tranche within six months of its receipt. (Any purchase made with the loan amount (except for services) must be conducted through an entrepreneur (physical or legal entity) registered under Georgian legislation or through imports.) To confirm compliance with the loan’s purpose, an audit report must be submitted to the financial institution (except for refinanced loans). For loans approved up to and including 500,000 GEL, the audit report must be conducted by entities registered in the “Accounting, Reporting, and Audit Supervision Service” under the Ministry of Finance of Georgia, holding categories I, II, III, or IV. For loans approved from 500,001 GEL, the audit report must be conducted by entities registered in the “Accounting, Reporting, and Audit Supervision Service” under the Ministry of Finance of Georgia, holding categories I, II, or III, or by the LEPL "Levan Samkharauli National Forensics Bureau." The audit report must be submitted to the financial institution within seven months from the date of loan or tranche disbursement. If the program participant fails to submit the audit report within this period, the agency will suspend co-financing. If the audit report is not submitted within 12 months, the agency will terminate co-financing and the secondary guarantee.
21. The agency’s interest rate co-financing is terminated in the following circumstances:
a) Full repayment of the loan or after 36 months from the date of loan issuance;
b) The beneficiary’s failure to fulfill obligations under the agreement with the respective commercial bank, specifically: in case of overdue payments, the agency will suspend co-financing, and if the commercial bank initiates enforcement proceedings or transfers the collateral, the agency’s co-financing is terminated;
c) Fulfillment of obligations set by this component by the agency, the commercial bank, and the program participant;
d) Restructuring or refinancing of the loan issued within the subcomponent in violation of the specified conditions;
e) Violation of loan terms by the commercial bank. In such cases, the commercial bank will be subject to contractual penalties, and the agency will decide on the termination of co-financing in accordance with its established rules and procedures;
f) Significant violation of obligations by the program participant.
22. Within the subcomponent, it is permissible to use loan funds to cover a documentary letter of credit opened at the servicing bank only for assets acquired through import.
News
From March 22 of this year until today, 6,651 preferential loans of 104 million GEL have been granted to promote the cultivation of annual crops
From March 22 of this year until today, 8,651 preferential loans of 131,4 million Gel have been granted to promote the cultivation of annual crops
9,713 loans with a value of 147.9 million GEL have been granted within the framework of the state project to promote the cultivation of annual crops from March 22 to now
Farmers can buy an agrodrone and a weather station with a preferential agro-credit
11,960 loans with a value of 187,5 million GEL have been granted within the framework of the state project to promote the cultivation of annual crops
The increased budget of the preferential agrocredit project for 2023 was set at 200 million GEL
The harvest from gardens co-financed under the state programs is successfully exported to Germany and the United Arab Emirates
With the financial support of the state, the company “Golden Farms” planted a garden of blue blueberries on 16 hectares and arranged refregirated farming
In Senaki Municipality, Rural Development Agency financed the planting of the blue blueberry garden and the creation of the cold farming
With the support of the Rural Development Agency and USAID a new enterprise was launched in the Kakheti region
The Rural Development Agency will issue co-financing in the direction of cattle breeding with new conditions
The farmer talks about the sale of the peach harvest with the government's support
Otar Shamugia Visited the "Geo Flower" Enterprise in Akhaltsikhe
The farmer tells us about the sale of the peach harvest and cold storage with the government's support
The farmer tells us about the sale of the peach harvest and cold storage
The farmer tells us about the peach harvest export and cold storage with the support of the state
2024 Results of the Rural Development Agency
The subcomponent "Financing for Annual Crops" of the "Preferential Agrocredit" project remains available this year as well
Success stories

Alexander Pirtskhalaishvili - Greenhouse of Roses
Taofood - Combined food enterprise

Tsintskaro + - Milk Processing Enterprise
