Under the Subcomponent, loans shall be issued for the purchase of machinery and/or implements.

To use the Subcomponent, the potential beneficiary must be registered in the Registry of Farms and Rural Enterprises.

Geographic Coverage

The geographic coverage of the Subcomponent includes the municipalities of Akhmeta, Dedoplistskaro, Kvareli, Telavi, Tianeti, Chokhatauri, Lanchkhuti, and Ozurgeti.

Subcomponent Criteria

Compliance of the machinery and/or implement must be confirmed by a certificate issued by the Legal Entity under Public Law - National Forestry Agency.

The purchase may be made only by non-cash payment.

Purchase of an implement is permitted only if the potential beneficiary/beneficiary has duly documented relevant machinery registered in its ownership, or if the intended purpose of the loan is the combined purchase of the relevant machinery and implement(s).

Machinery and/or implements may be purchased on the local market (from an individual entrepreneur and/or legal entity registered in Georgia) or through importation.

The machinery to be purchased must be new (not previously placed in service) and, specifically, must satisfy both of the following conditions:

• at the time of purchase, the warranty issued by the machinery manufacturer must be valid;
• the machinery must have been manufactured no more than three calendar years before the purchase date.

During the period in which the Agency co-finances interest on the loan, the beneficiary may not alienate the machinery and/or implement purchased with the loan or take it outside the borders of Georgia.

Loan amount: from GEL 7,000 through GEL 1,500,000, inclusive.

The Agency shall co-finance interest for a period of up to 36 months, at an amount equal to the refinancing rate established by the National Bank of Georgia, during a period not exceeding 38 months from disbursement of the loan or its first tranche; provided, however, that loan co-financing shall be disbursed after the beneficiary confirms that the loan proceeds were used for their intended purpose.

If the beneficiary fails to submit an audit report within the foregoing period, the Agency shall terminate the co-financing agreement.

The loan interest rate shall be determined based on the amount of the loan. The loan interest rate may be fixed or floating (variable):

In the case of a fixed interest rate, the financial institution shall establish the following annual interest rates:

In the case of a floating (variable) interest rate, the financial institution shall establish the following annual interest rates:

Within 12 months after disbursement of the loan (other than a refinanced loan), the beneficiary shall submit an audit report to the financial institution confirming that the loan proceeds were used for their intended purpose.

If the beneficiary fails to submit an audit report within the foregoing period, the Agency shall terminate the co-financing agreement.

Any loan terms not addressed in this Subcomponent shall be governed by the terms established under the Preferential Agrocredit for Fixed Assets Component.

Eligibility Criteria for a Potential Beneficiary

The potential beneficiary must have no outstanding tax liability to the State Budget. This requirement shall not apply where the amount of tax liability does not exceed GEL 1,000, collection of the tax liability has been deferred, or the obligation to pay it has been suspended by operation of law.