Green Bond Compliance is an innovative area of financial law in Georgia that regulates the issuance of securities to fund environmentally friendly projects. Following the National Bank of Georgia's approval of the "Sustainable Finance Roadmap," green bonds have become an attractive capital-raising instrument for companies wishing to finance renewable energy, energy-efficient construction, or clean transport. However, obtaining and maintaining "green" status involves complex legal procedures. This implies compliance of the issuance with international principles (ICMA) and national taxonomy, giving investors assurance that their money is genuinely used for ecological purposes.
Capital markets lawyers represented on the Legal.ge platform offer full legal support in the green bond issuance process. Services include:
- Prospectus preparation: Drafting the bond prospectus in accordance with Georgian legislation and Green Bond Principles (GBP), detailing the specific use of proceeds.
- Taxonomy alignment analysis: Legal assessment of the project in relation to the "Green Taxonomy" approved by the National Bank of Georgia.
- Collaboration with Second Party Opinion (SPO) providers: Legal communication with international rating agencies or auditors who issue opinions on the "greenness" of the bonds.
- Reporting obligation management: Legal oversight of preparing mandatory reports for investors and regulators in the post-issuance period.
- Listing procedures: Legal assurance for admitting bonds to the Georgian Stock Exchange or international exchanges.
Green bond compliance services are relevant in the following scenarios:
- An energy company plans to build a hydropower plant or solar power station and wants to issue bonds with a lower interest rate, requiring confirmation of "green" status.
- A developer builds an energy-efficient residential complex and wants to attract investments from international funds (e.g., GGF) that finance only green projects.
- A municipality plans to upgrade its public transport fleet with electric buses and considers issuing municipal green bonds.
- A bank issues "green bonds" to subsequently use this resource for on-lending green loans and needs to legally structure its internal procedures.
At the legislative level, the green bond market is regulated by the Law of Georgia on Securities Market. The main regulatory document is the Decree of the President of the National Bank of Georgia "On Approval of the Sustainable Finance Taxonomy of Georgia." This document details which economic activities qualify as "green." Also important is the Corporate Governance Code for Commercial Banks regarding ESG issues. The public offering of bonds is regulated by National Bank instructions regarding the emission prospectus.
Collaboration with a Legal.ge specialist ensures the transparency and credibility of the process. In the case of green bonds, reputational risk is very high: if it turns out funds were misused (so-called Greenwashing), the company loses investor trust and may face sanctions. A lawyer creates protective mechanisms to minimize this risk.
Find capital markets and sustainable finance experts on Legal.ge. Our platform connects you with lawyers experienced in securities issuance and banking regulations. Leverage green financing opportunities for your business growth in a legally sound way.
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