1. Under the component of ‘Preferential Agrocredit for Fixed Assets’ the Agency shall provide the secondary collateral and co-finance the loan interests, allocated by the financial institutions for the fixed assets of the enterprises producing and processing agricultural products.

2. The Agency shall co-finance the loan interest on the basis of the co-financing agreement concluded with beneficiaries.

3. At any stage of implementation of the project the Agency carries out the monitoring of the loans and appropriately responds to the facts of violation.

4. This component is available to the following individuals:

  4.1. An individual who is a citizen of Georgia - in case of the loans in the amount from 20 000 GEL to 75 000 GEL;

   4.2. A sole proprietor registered according to the laws of Georgia;

  4.3. A legal person registered according to the laws of Georgia (except the state/municipal enterprises).

5. Under the component of "Preferential Agrocredit for Fixed Assets" loans will be given for financing new agricultural enterprises and extension, modernization and/or repairing of the existing ones for the following purpose(s):

   5.1. Processing enterprises:

   5.1.1. Meat, fish and milk processing;

   5.1.2. Production of alcoholic beverages (other than the grape processing enterprises);  

   5.1.3. Tea production and/or packaging;

   5.1.4. Fruit, vegetable and berry processing;

   5.1.5. Walnut and nut processing;

   5.1.6. Wool, leather and fur processing;

   5.1.7. Production of vegetable oils (oil, margarine, butter) and "khalva";

   5.1.8. Production of essential oils and spices;

   5.1.9. Arranging slaughterhouses;

   5.1.10. Processing of bee products;

   5.1.11. Production of agricultural feed for animals, birds and fish;

   5.1.12. Production of Organic fertilizer.

5.2. Infrastructural enterprises:

   5.2.1. Warehouses for storing of agricultural products;

   5.2.2. Grain dryers;

   5.2.3. Coolers for storing of agricultural products;

   5.2.4. Production of oak barrels for alcoholic beverages;

   5.2.5. Production of wine clay barrels ("Kvevri");

5.3. Primary agricultural enterprises:

   5.3.1. 5.3.1. Livestock farm (except of cattle)

   5.3.2. Poultry farm (in case of the poultry farm  the loan shall be granted only if the farm criteria are fulfilled which will be elaborated by the Agency together with LEPL "Agricultural Scientific-Research Center" and will be placed on the Agency's website);

   5.3.3. Poultry breeding farm;

   5.3.4. Farms for animals with valuable fur;

  5.3.5. Greenhouses and other indoor soil production (in the case of greenhouses for berry crops and perennial flowers, purchase of seedlings and pots is allowed)

   5.3.6. Fish production;

   5.3.7. Production of bee products;

6. The following agricultural activities may be also financed:

  6.1. Arrangement and maintenance of the existing facilities, greenhouses, fish tanks and ponds;

  6.2. Arrangement and maintenance of new facilities, greenhouses, fish tanks and ponds;

  6.3. Purchasing, installing and repairing technological lines, climate control equipment and tools,   freezing devices, power generators, milking equipment (except for livestock), feed preparation equipment and others;

  6.4. Purchasing, installing and repairing storage chambers, shelves, tanks and other technological equipment for storage;

  6.5. Making water wells and connection to water, electricity and natural gas supply pipelines and sewerage system;

  6.6. Production of the following packaging materials:

   6.6.1. Wooden, cardboard and plastic boxes for storing and transporting fruit and berries;

   6.6.2. Glass and clay bottles, corks for alcoholic beverages;

   6.6.3. Aseptic and plastic containers and lids made of glass, tin and cardboard for the products produced by conservation and processing enterprises;

  6.7. Purchasing and repairing special equipment and trailers (loaders, manure carriers, feed selecting and supplying equipment and others) required for the operation of the enterprise;

 6.8. Purchase of poultry, rabbits, fish, goats and pigs (poultry, rabbits, goats and pigs can be purchased through import or on the local market only from specified breeding farms. The list of breeding farms is determined by the Agricultural Scientific Research Center); 

  6.9. Planting, caring for and restoring perennial orchards, including:

   6.9.1. Stone and seed fruit species;

   6.9.2. Walnut species;

   6.9.3. Berry cultures;

   6.9.4. Citrus and other subtropical cultures;

   6.9.5. Tea, bay leaf and other technical cultures;

   6.9.6. Perennial flowers;

   6.9.7. Woody and fast-growing plant species;

  6.10. Arranging seedling and plant nurseries (other than the Rkatsiteli grape variety);

  6.11. Arranging the irrigation and drainage systems (other than the Rkatsiteli grape variety);

6.12. Repair and arrangement of support systems of perennial plants (except for vines) and/or protective nets; 

  6.13. Arranging and repairing the fence for the agricultural facility (columns, wire, barbed wire, wire net, electric fence) (other than the Rkatsiteli grape variety);

  6.14. Purchasing various inventories for livestock and plant-growing.

  6.15. Energy efficient enterprises:

  6.15.1. Production of energy efficient stoves;

  6.15.2. Fuel-producing enterprises for energy-efficient furnaces;

  6.16. Audit report value, not more than 1% of the loan amount, but not exceeding GEL 15,000. 

7. It is prohibited to finance the following business activities:

  7.1. Purchase of land;

  7.2. Purchasing of agricultural facilities, greenhouses and others;

 7.3. Purchasing and repairing transporting, flying and sailing equipment (Except agricultural machinery);

  7.4. Purchase of transport (except for special equipment and trailers, equipment and implements, vehicles integrated with non-stationary technological lines), flying and floating vehicles

  7.5. Purchasing of the shares in agricultural enterprise.

8. The enterprises financed under the project of co-financing may also be financed under this component of Preferential Agrocredit for Fixed Assets.

9. The amount of the Preferential Agrocredits allocated for the enterprises financed under the "Co-financing Project" (including parallel loans), the proportions and purpose of financing of current and fixed assets (including the purposes that are not determined or banned under this article) and the time frames for granting the tranches, shall be determined by the "Project of Co-financing".

10. The enterprises, that will process local raw materials and use local human resources, shall be financed under this component, namely the Preferential Agrocredit for Fixed Assets. The projects that are intended for processing only imported raw materials and for using non-local human resources may not be financed.

11. It is allowed to restructure the loan if as a result of restructuring the total amount of co-financing to be paid by the agency does not exceed the total remaining amount of co-financing under the loan payment schedule on the date of loan restructuring.

12. In the component of basic means Paragraph 12 shall be amended and written:

 The refinancing of the loan issued within the component is allowed if:

 a) The loan was approved before February 15, 2017 and issued for the purposes envisaged in Paragraphs 5 and 6;

 b) The loan was issued after February 15, 2017 and the amount of a new loan does not exceed the amount of the remaining principal loan of the initial loan by the date of loan refinancing. Furthermore, refinancing of such a loan is allowed only if the refinancing does not extend the remaining term of co-financing intended for the initial loan and the total volume of co-financing of the remaining fees to the Agency.

13. It is allowed to refinance the loan by the sole proprietor taken before registration as sole proprietor.

14. Parallel loans may be allocated if the sum of the parallel loans does not exceed the established maximum limit determined per beneficiary under this component of the Preferential Agrocredit for Fixed Assets, and the amount of each parallel loan is more than the minimum limit amount.

15. Total amount under the Preferential Agrocredit for Fixed Assets shall be determined from 20 000 GEL through 1 500 000 GEL. The term of the loan shall be defined on the basis of the agreement to be concluded between the beneficiary and financial institution granting the credit.  

16. The interest rate of the credit shall be determined according to its amount. The following interest rates must be determined by the financial institutions: The interest rate of the credit may be fixed or floating:

  16.1. In case of fixed interest rate, the following annual interest rates shall be established by the credit institution:

Volume of the loan	Interest rate
From 20 000 GEL to 150 000 GEL inclusive	not more than 16%
From 150 001 GEL to 600 000 GEL inclusive	not more than  15%
From 600 001 GEL to 1 500 000 GEL inclusive	not more than  14%

   16.2. In case of floating (variable) interest rate, the following annual interest rates shall be established by the credit institution:

Volume of the loan	Interest rate
From 20 000 GEL to 150 000 GEL inclusive	Not more than the refinancing rate set by the National Bank plus  8%
From 150 001 GEL to 600 000 GEL inclusive	Not more than the refinancing rate set by the National Bank plus   7%
From 600 001 GEL to 1 500 000 GEL inclusive	Not more than the refinancing rate set by the National Bank plus   6%

 17. Participation of the Agency:

   17.1. The Agency shall co-finance not more than 66 months interest rates in parallel with the amount paid by the borrower (if any), in the amount of annual 11% of the principal loan amount, not more than within 68 months upon granting of the loan or the first tranche thereof.

   17.2. Reimbursement of not more than 50% of the total amount of each/ new (non-financed / unstructured) loan issued under the objectives set forth in paragraphs 5 and 6 of this Article shall be reimbursed by the Agency within 50 months following the issuance of the loan or its first tranche. If the loan is secured for the first time, only the property that is fully or partially financed with the loan amount. Secondary collateral is issued by a financial institution if, due to non-fulfillment of its obligations by the borrower, the financial institution will realize the primary collateral and as a result will not be able to withdraw 100% of the remaining principal amount. The Agency shall ensure that the difference is not exceeded by 50% of the principal amount prior to the realization of the primary security. Secondary collateral will not be issued by the financial institution if the loan is already secured by a loan guarantee mechanism for any project / project.

18. The commission fee determined by the financial institution for allocating credits must not exceed:

   18.1. Up to 50 000 Gel − 0.5%;

   18.2. 50 001 Gel or more − 0.2%.

19. In case of early payment of the debt, no preliminary payment commission fees/fine will be imposed to a borrower by a financial institution.

20. In case of failure to pay the amount determined by the schedule within the time frames specified in the schedule a financial institution may charge fines only to the payable principal amount. The fine must not exceed 0.1% of the overdue amount for each overdue day.

21. In case of refinancing by other financial institutions the commission fee rate, determined by the National Bank of Georgia for such cases, shall apply.

22. The loan repayment schedule shall be determined under the agreement made between the beneficiary and financial institution providing the credit facility.

23. At any stage of implementation of the project the Agency shall monitor the loans issued within the component. The form and time of monitoring shall be determined by the Agency. If the violation of the terms and conditions and/or the purpose of the project is confirmed, the Agency shall act in accordance with the rules and the procedures provided for in the agreements concluded between the financial institutions and the beneficiaries that apply in the Agency.

24. Parallel loans may be allowed within the frame of the component or subcomponent. In case of availability of the current loans in different currencies, aggregate current balance of all loans according to the official currency exchange rate fixed by the National Bank shall not exceed 1 500 000 GEL at the moment of approval of a new loan.   

25. The agency is authorized to implement a monitoring of the loans issued within the component at any stage of the project implementation. Time and form of the monitoring will be defined by the agency. In case of confirmation of the violation of the conditions and/or purpose defined by the project, the agency will act in accordance with the rules and procedures provided by the agreements concluded with financial institutions and beneficiaries and effective in the agency. In addition, the beneficiary is obliged to ensure a full spend of the tranche during 6 (six) months from receive of each tranche (except the refinanced loan). (any purchase implemented with the amount of the loan (except the service should be implemented by the entrepreneur physical/legal entity registered under the rule defined by legislation of Georgia or through import)  and for confirmation of the loan purpose to submit the audit report in the financial institution (except the refinanced loan) (for the loans approved including 500 000 Gel, the entities in the register of the "Accounting, Reporting and Audit Supervision Service" of the state sub-agency institution included in the system of the Ministry of Finance of Georgia, who have I, II,  III or IVcategory; For approved loans from 500 001 Gel, the entities in the register of the "Accounting, Reporting and Audit Supervision Service" of the state sub-agency institution included in the system of the Ministry of Finance of Georgia, who have I, II, or III category or LEPL "Levan Samkharauli National Bureau of Forensic Expertise"). The audit report should be submitted to the financial institution during the next 7 (seven) months from issue of the loan or its tranche. If the beneficiary does not submit the audit report within the mentioned period, the agency will suspend co-financing to the beneficiary, and if the beneficiary does not submit an audit report within 12 (twelve) months, the agency will terminate co-financing and secondary provision.

26. It is allowed to cover the documentary letter of credit opened in the servicing bank only for the assets purchased through import with the loan amount.

27. In the case of loans issued in terms of fixed assets and its sub-components, if the amounts intended for the purposes of the said component/sub-component are issued as one loan, it is allowed to separate them by issuing a new loan/loans, if the amount of the new loan will not be less than the minimum amount determined by the component/sub-component.