Subcomponent for the cultivation of new perennial crops

1. The subcomponent provides co-financing of interest rates only for loans issued by financial institutions for the establishment of new perennial orchards, vineyards, and plantations.

2. The following individuals are eligible to benefit from the subcomponent:

a) Georgian citizen (natural person) – for loans ranging from 20,000 GEL to 75,000 GEL;

b) Individual entrepreneur registered under the legislation of Georgia;

c) Legal entity registered under the legislation of Georgia (excluding state/municipal enterprises).

3. Within the subcomponent, Preferential Agrocredit is defined as ranging from 20,000 GEL to 1,500,000 GEL.

4. To participate in the program, an applicant must meet the financial institution’s prerequisites for such loans as well as the requirements of this project.

5. The land plot where the new perennial orchard is planned must be owned, co-owned, or leased by the borrower in accordance with Georgian legislation. If the borrower is a cooperative with agricultural status, loan funds may be invested in land plots owned by cooperative members/shareholders. In case of co-ownership, there must be co-owners’ consent for the use of the property throughout the loan co-financing period. In case of lease, the lease term must not be shorter than the loan co-financing period.

6. The participant is obligated to fully utilize each loan tranche within 6 months of its disbursement. All purchases (excluding services) made using loan funds must be from a registered entrepreneur (natural/legal person) in Georgia or through importation. To confirm compliance with loan utilization, the participant must submit an audit report to the bank within 7 months of the loan or tranche disbursement (excluding refinanced loans). For loans up to 500,000 GEL, the audit report must be issued by an entity listed in the Register of the Accounting, Reporting, and Auditing Supervision Service of the Ministry of Finance of Georgia with I, II, III, or IV category. For loans from 500,001 GEL, the report must be issued by an entity with I, II, or III category or by the Levan Samkharauli National Forensics Bureau. If the audit report is not submitted within 7 months, the agency suspends co-financing. If it is not submitted within 12 months, the agency terminates co-financing and secondary collateral.

7. Within the subcomponent, Preferential Agrocredit can only be issued for the establishment/development of new orchards (purchasing seedlings is allowed only from local nurseries designated by the “Plant the Future” state program or through import) for the following purposes:

• Establishment of stone fruit and/or pome fruit orchards
• Establishment of nut plantations
• Establishment of berry plantations
• Establishment of citrus and/or other subtropical plantations
• Establishment of tea, laurel, and/or other technical crops
• Establishment of perennial flowers
• Establishment of timber-producing and fast-growing plant species
• Installation of irrigation and/or drainage systems (excluding vineyards)
• Installation of support systems (wire, poles) for perennial plantations (excluding vineyards)
• Installation of fencing for agricultural facilities (posts, wire, barbed wire, wire mesh, electric fence), repair and installation of hail protection systems (nets, support systems), installation of water wells, connection to water, electricity, natural gas, and sewage systems, purchase, installation, and setup of renewable energy sources (excluding vineyards)
• Purchase of necessary equipment for crop cultivation (excluding vineyards)
• Funding all expenses required to bring the newly established perennial crops to commercial fruit-bearing stage, including operational costs
• Audit report fees, up to 1% of the loan amount, but not exceeding 15,000 GEL
• Construction of auxiliary buildings (up to 20,000 GEL)
• Purchase of agricultural unmanned aerial vehicles (agro-drones) with spraying functions and agricultural drones for agronomic scanning, as well as a meteorological station

8. The interest rate of the loan is determined based on its amount. The interest rate may be fixed or floating:

a) In the case of a fixed interest rate, the annual interest rates set by the credit institution must be as follows:

b) In the case of a floating (variable) interest rate, the following annual interest rates must be established by the financial institution:

9. Agency Participation:

a) The agency will co-finance the interest rate for no more than 66 months, in parallel with the amount paid by the borrower (if applicable), at an annual rate of 11% of the loan principal, for no more than 68 months from the issuance of the loan or its first tranche, but no later than 2 months after the last co-financing payment date specified in the credit agreement's repayment schedule.

b) For each new (non-refinanced/non-restructured) loan issued within the subcomponent, the agency will provide secondary collateral for up to 50% of the total principal amount, for 68 months following the issuance of the loan or its first tranche (but no later than 2 months after the last co-financing payment date specified in the credit agreement's repayment schedule), if the primary collateral consists only of the property that is fully or partially financed by the loan amount.

The secondary collateral will be provided to the financial institution if, due to the borrower's failure to meet obligations, the financial institution sells the primary collateral and does not recover 100% of the remaining principal balance.

The agency will cover the difference, but no more than 50% of the outstanding principal amount before the sale of the primary collateral.

See: Targeted Co-financing Agreement – Preferential Agrocredit for Fixed Assets for the Establishment of New Perennial Crops

10. All terms and conditions for loans issued under the subcomponent that are not specified herein are regulated by the conditions of the Fixed Assets Component.