Make it your homepage |   E-mail: Subscribe Unsubscribe

EBF: Vote in EU Parliament paves way for truly European banking landscape


Friday, April 18, 2014
News Making Money

Georgia Needs Investments to Save Energy and Use Resources, Energy Summit

Written by Mariam Papidze, The FINANCIAL

10/02/2014 00:00 (67 Day 10:49 minutes ago)

bda.jpg
ADVERTISEMENT

The FINANCIAL -- To support the Georgian energy and infrastructure sector the European Investment Bank is investing EUR 409 million in the sector,  Asian Development Bank (ADB) - USD 500 million, and EUR 100 million is being allocated from KFW, a German government-owned development bank. International Financial Corporation is investing USD 328 million in private sector. The major directions of the priority projects are water pollution, collecting of remains and recycling, technologies for cleaning, exhaust control and environmental protection, urban infrastructure, security and disaster management, transport and traffic, and building and construction technologies.

“Georgia has benefited from EUR 409 million from the European Investment Bank (EIB),” Philippe Szymczak, Head of the Southern Caucasus and Russia Division at EIB, told The FINANCIAL. “Overall, we have a portfolio of EUR 5.2 billion outstanding throughout the Eastern Partnership countries including Georgia, Armenia, also Moldova, Ukraine and Russia. Georgia is the third largest country portfolio and we have a broad based cooperation with the country, which includes investment projects in the field of transport, water infrastructure, energy and also support to small and medium sized enterprises through the credit loans we have established with banks in Georgia.

“One of the critical challenges faced by the countries in transition is inadequate infrastructure. For example, the roads that are inherited from the past are not in good shape today, water infrastructure also inherited from the past needs massive rehabilitation. With the Government we are working towards improving this infrastructure. As a result it benefits the population and will support the development of the economy in general and will facilitate the development of the private sector. There was some slowdown in economic growth last year not only in Georgia but in the region for a number of reasons. But all the forecasts that we have seen regarding Georgia show a significant economical improvement in 2014. We all agree that more investments are required,” said Szymczak.

“Economic data shows that GDP growth in Georgia in 2012 was 6.1 and in 2013 - 2.5 of EUR 16 billion. GDP per capita was EUR 3.5. Finally Georgia’s rating is Ba3, rating outlook - stable. Only Moldova and Ukraine got a negative rating outlook. We have three high level objectives for 2014-2020: 1. Private sector development, in particular support to SMEs; 2. Development of social and economic infrastructure; and 3. Climate change mitigation and adaptation (renewable energy, energy efficiency, sustainable transport,” Szymczak said.

International Finance Corporation (IFC) has invested USD 40.5 million in the 87 Megawatt Paravani Hydropower Plant project and syndicated USD 11.5 million from Turkish Development Bank. IFC co-developed Adjaristsqali HPP Cascade through IFC InfraVentures, an early stage project developer.

“USD 56 million of near term investments are needed by SMEs, according to a survey and the industry could be saving up to 12% of energy costs,” said Thomas Lubeck, IFC Regional Manager for the South Caucasus. “In Georgia there is over 4,000 mW of undeveloped hydropower potential. For example, in Armenia USD 35 million is needed for SMEs and the industry could be saving up to 14.5% of energy costs,” he added.

“There is a huge role of the private sector in combating climate change. Now more than ever, major investment is needed to help mitigate climate change. 80% of that capital will need to come from the private sector. Solar, wind, and other forms of renewable energy pose great opportunities for private investors in emerging markets. IFC sees up to USD 1 trillion climate-related investment potential in Emerging Europe, Central Asia, and the Middle East and North Africa,” he added.

The private sector operates to see the profit and our job is to provide finance to them. From 1995 IFC has invested USD 650 million in about 50 projects. Right now IFC has an active investment portfolio of USD 328 million, out of which about 70 percent is in the financial market and another 25 percent is in infrastructure, hydro power, Airport s. The rest of the portfolio is directed to agriculture, which we also believe is important,” Lubeck said.

Asian Development Bank is another financial institution which supports investments and institutional reforms in the urban water supply and sanitation sectors in Georgia.  ADB works with governments and international finance funding agencies.

“In Georgia we have, what we call, a multitranche financing facility that provides USD 500 million investments over eight years,” said Kathie M. Julian, Resident Representative at ADB. “Of this amount some USD 250 million has been approved targeting 7 secondary towns which will benefit nearly 350,000 residents. These towns are Poti, Zugdidi, Kutaisi, Anaklia, Marneuli and Mestia. For the future there are several major investments that are needed to be implemented. USD 6.4 billion is estimated for the South Caucasus over the next ten years. The key question is the water tariffs, how Georgia will raise the tariff levels, how it will reduce the energy costs and how the country will realize that wastewater management is important,” she added.

"The problem in Georgia was that its vast hydropower potential was mostly unused, the domestic transmission network was unstable and technical obstacles as well as non-sufficient transmission lines prevented major energy export to Turkey,” said Lars Oermann, Director of the South Caucasus Office at KFW. “For solving this problem the construction of a new countrywide 500 kV transmission network was necessary including the construction of a back to back substation functioning as an adapter between the European and Russian power grid and connection Georgia to the Turkish network.  For financing this project EUR 100 million has been allocated by KfW, on behalf of the German Government. The energy project I referred to was the Black Sea Transmission Network which was finished in 2012/13. In December 2013 the Back to Back station in Akhalsikhe,  was opened under the attendance of PM Garibashvili, Minister Kaladze, Turkish and Azeri Energy Minister. All the problems mentioned (unstable network, technical obstacles) are solved with the opening of the 290 Mio. €  Black Sea Transmission Network. Energy exports to Turkey are possible now. The project was funded by KfW and its partners among them EBRD, EIB, OeEB." Oermann added.

 

When it comes to energy, the EU Association Agreement requires a number of reforms in the Georgian energy sector in terms of legislation, structures and institutions in order to create a more transparent, stable and effective regulatory framework.


“There are a number of instruments that we can use and I would like to start with the neighbourhood investment facility, which is a financial mechanism aimed at normalizing additional funding to cover the investment needs of the EU neighbouring region for infrastructure in sectors such as transport, energy and the environment,” said Boris Iarochevitch, Deputy Head of the Delegation of the EU to Georgia. “This facility also supports the private sector through risk capital operations in SMEs. To see the final results and benefits of the EU Association Agreement at least 6-7 years should pass. It is a long term effort. For instance, in the field of environment potential investors will know that such a directive, similar to the one in the EU, will be in Georgia in two years. It gives a very clear framework for potential investors,” he said.

 

 

Make Your Comment

Add NewSearchRSS
Only registered users and facebook social network members can write comments!

This text is replaced by the Flash movie.
This text is replaced by the Flash movie.
Politics
Parliament issues strong call for EU lobby transparency register to become mandatory

16/04/2014 16:53 (1 Day 17:56 minutes ago)

The FINANCIAL -- The report approved by MEPs gives an important signal to the European Commission that a far more ambitious approach is needed to secure genuine lobby transparency in the EU, according to EUbusiness Ltd.

Read more...
TRAVEL BIZ
Marriott International Expands its Courtyard Footprint In Eastern China

12/04/2014 11:34 (5 Day 23:15 minutes ago)

The FINANCIAL -- Marriott International continues dynamic growth in China with the opening of the Courtyard by Marriott Hangzhou Qianjiang.

Read more...



World News
EBRD loans to boost energy efficiency and support competitiveness of Macedonian companies

16/04/2014 16:42 (1 Day 18:07 minutes ago)

The FINANCIAL -- The EBRD has teamed up with Macedonian bank, NLB Tutunska banka, to increase the competitiveness of the Macedonian private sector and to promote energy efficiency in the country with a €6 million financing package, according to EBRD.      

EBRD helps modernise Baltic freight handling

16/04/2014 16:29 (1 Day 18:20 minutes ago)

The FINANCIAL -- A €32.5 million loan from the EBRD to Klaipedos Smelte, the company operating the container terminal at Klaipeda port in Lithuania, helped modernise its freight handling capacities and upgrade the whole Baltics region as a transit hub, according to EBRD.

EBRD to provide first loan to Tunisian leasing sector

16/04/2014 16:26 (1 Day 18:23 minutes ago)

The FINANCIAL -- The European Bank for Reconstruction and Development (EBRD) is providing a €15 million senior unsecured loan to the Compagnie Internationale de Leasing (CIL) for on-lending to local micro, small and medium-sized enterprises (MSMEs) in Tunisia. The loan is the EBRD’s first investment in the country’s leasing sector, according to EBRD.

CityLife
Successful cities of the future are agile to adapt to global trends

11/04/2014 18:29 (6 Day 16:20 minutes ago)

newyork-streets-new-york-street-usa-feed-232220_copy.jpg

The FINANCIAL -- Cities worldwide face the challenge of growing economically while balancing the social and environmental side of the city to remain sustainable in the future.

TRAVEL BIZ »
PRESS RELEASES »
FINANCIAL »
UKRAINE »
GEORGIA »
WORLD »
BANKS »
BUSINESS »
TECH »
MARKETS »
B SCHOOLS »
SPECIAL REPORTS »

Markets
Attack of the Clones: New Kids on the Block Shake Up CEE Consumables Space

12/04/2014 16:44 (5 Day 18:05 minutes ago)

The FINANCIAL -- Thriving sales of cheap new-build compatible products are having a profound impact on the CEE printer and MFP consumables market, according to global market intelligence firm International Data Corporation (IDC).

Jobs
Philippines: Further reforms to strengthen growth, create more and better jobs

11/04/2014 12:00 (6 Day 22:49 minutes ago)

The FINANCIAL -- The Philippines is likely to remain as one of the fastest growing economies in the East Asia and Pacific region in the next two years.

Oil&Auto
Chevrolet Cruze Named Diesel Car of the Year

16/04/2014 17:40 (1 Day 17:09 minutes ago)

The FINANCIAL -- Diesel enthusiasts around the world have determined the 2014 Chevrolet Cruze Diesel is the top diesel car of the year and Chevrolet is the top diesel manufacturer of 2014, according to General Motors.

Read more...
INSURANCE
Attitudes towards life are changing: 60 is the new 50

16/04/2014 17:02 (1 Day 17:47 minutes ago)

The FINANCIAL -- Money matters: Across the world, people of different generations are worried about their financial wellbeing in retirement.

Read more...






Developed by Aleksandre Chiabrishvili

Design built by Creo Group