The document summarizes the results of a resource efficiency and cleaner production (RECP) demonstration project in Georgia. 18 national experts were trained in RECP methodology and assessments were conducted in 18 companies. RECP options were assessed for 15 companies and investment project proposals were developed. RECP clubs involving 35 SMEs were also established. The project achieved annual energy, water, materials savings and reductions in air emissions, wastewater, and solid waste. However, many companies did not fully implement the RECP projects due to lack of financial resources and other priorities. The survey found that tightening environmental regulations could increase demand for RECP projects but that companies also need help accessing low interest loans and grants to implement profitable RECP measures.

1. Opportunities and barriers to promote
SMEs’ RECP financing in Georgia
Tatiana Chernyavskaya
Tbilisi, July 16th 2019

2. Results of RECP Demonstration Project
• 18 national experts were trained in RECP
methodology;
• RECP assessments conducted in 18 demonstration
companies from food, chemicals and construction
materials sectors
• In-depth techno-economic assessments of RECP
options were carried out in 15 companies. These
assessments provided the basis for developing
investment project proposals.
• RECP clubs involving 35 SMEs were established in the
Kakheti region and three municipalities: Kaspi,
Kutaisi and Rustavi.

3. EaP GREEN Project Impacts
annual energy saving
25 000 MWh
annual water saving
136 000 m3
materials saving
2 000 t
air emissions reduction
1000 t CO2eq
waste water reduction
5 680 m3
solid waste reduction
7 t
Economic benefits:
 > 1 M EUR/yr saving after implementing only a first
set of low cost RECP measures
 Average payback period < 2 years
Environmental benefits:

4. 0
20
40
60
80
Did you implement the project/options proposed by the RECP experts?
Yes
Yes , partially
No
I cannot answer
0 10 20 30 40 50 60 70 80
Lack of financial resources required for
implementation of the proposed Project
There are other priority problems to be
resolved in the company which require…
Lack of time required for implementation of
the proposed Project
The project is being implemented
I cannot answer
Other
If you did not implement the project, indicate why?
UNIDO survey on RECP Financing

5. SME Finance in EaP countries
Example of Georgia
SMEs
EaP
Source: EIB, Neighbourhood SME Finance in Georgia
Observations
• Banks are the main source of external financing
• SMEs in agricultural sector have limited access to external financing
• IFI credit enhancement programs are primary utilised by larger companies
• Very few banks have made use of credit guarantee schemes developed by IFIs

6. Survey Result Demonstration
22%
2%
2%
37%
9% 4%
2%
13%
7%
2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Yes Yes, partially No I cannot answer
Did you implement the project/options proposed by the RECP
experts?
Micro (up to 10 employees)
Small (10-50 employees)
Medium (50-250 employees)
Large (more than 250 employees)

7. 2%
5%
60%
2%
19%
6%
2%
5%
0% 10% 20% 30% 40% 50% 60% 70%
The company plans to impement these projects by its own
funds in 2017-2018
We have already implemented
Lack of financial resources required for implementation of the
proposed Project
Lack of time required for implementation of the proposed
Project
There are other priority problems to be resolved in the
company which require financial resources
Too long‐term, we may change our business before payback
If we received grants we would implemet the suggested
measures
I cannot answer
If you did not implemented the project, indicate why?
Survey Result Demonstration

8. 41%
4%
43%
8%
3%
1%
0% 10% 20% 30% 40% 50%
Interest rates are high on business loans
I would like to take a loan
I do not want to take the risks, because the
economic situation in the country is unstable
I cannot answer
I already have a loan
It is difficult to communicate with banks
If not, please highlight possible reasons:
Survey Result Demonstration

9. Survey Result Demonstration
85%
4%
11%
Are your decisions influenced by policy or
regulation?
Yes
No
I cannot answer

10. Survey Result Demonstration
28%
26%
26%
4%
9%
1%
3%
2%
1%
0% 5% 10% 15% 20% 25% 30%
Adoption of Energy efficiency regulations
Increase penalties for environmental pollution
Tightening environmental legislation
The law is strict and penalties are hight
Encourage companies
Financing
Benefits / Privileges
All Changes
I cannot answer
What expected changes in regulation would increase demand for
RECP projects?

11. Summary
• Environmental protection is important for the companies,
but their decisions are influenced by government
regulations, so tightening environmental legislation will
help to increase demand for RECP projects
• Most of the respondent companies are willing to finance
the profitable projects, but they do not want to take a risk,
because they think that economic situation in the country
is unstable, also interest rates are high; They need help to
take low rate debts and grants
• Lack of financial resources was the main reason why only
some of the companies implemented the proposed projects
fully or partially.

12. Thank you!
Tatiana Chernyavskaya
International Project Coordinator| UNIDO
t.chernyavskaya@unido.org
www.recp.ge
www.unido.org/cp