The FINANCIAL -- The European Investment Bank (EIB) has directly financed a company in Georgia for the first time.
The EU bank will provide a EUR 21.47m long-term loan to Tbilisi’s water utility – Georgian Water and Power (GWP) – to support its water and wastewater infrastructure development programme. EIB Vice-President Vazil Hudák today announced the signature of the loan together with GWP’s CEO Giorgi Tskhadadze.
The loan will enable GWP to rehabilitate the Gardabani wastewater treatment plant and to modernise and develop the water supply infrastructure. This will help GWP to meet its environmental objectives in line with the Georgia-European Union Association Agreement, and the investment into the wastewater treatment plant will improve ecological conditions in the river basin. The modernisation of the water supply network in Tbilisi will help to reduce water losses as well as energy use in the pumping stations, according to EIB.
“The contract signed today is unique as it is the first EIB loan provided directly to a private corporate in Georgia. This project will increase the quality of services in the water sector with a positive impact on the everyday life of citizens of Georgia’s capital Tbilisi”, said Hudák.
“The long-term loan facility agreement signed with the EIB affirms the trust of this institution in GWP. The debt financing enables the company to make investments in the development of its infrastructure, which on the one hand support Georgia’s long-term objectives with regard to the Georgia-European Union Association Agreement and on the other hand contribute to improvements in the living standards of Tbilisi’s population,” said Giorgi Tskhadadze.
The EIB – the European Union’s bank – finances projects in Georgia on the basis of an EU mandate for the countries of the Eastern Neighbourhood, the so-called External Lending Mandate (ELM). The 2014-2020 ELM provides for a total amount of Bank financing in the Eastern Neighbourhood of EUR 4.8bn to support projects of significant interest to both the EU and Eastern Partnership countries in the areas of local private sector development, social and economic infrastructure and climate change. The loan signed is covered by the EU comprehensive guarantee.
The EIB is committed to stepping up its support for Georgia following the June 2014 signature of the EU-Georgia Association Agreement, which includes a Deep and Comprehensive Free Trade Agreement (AA/DCFTA). This Agreement has led to much closer political and economic ties with the EU within the framework of the Eastern Partnership.
Since the start of EIB activities in Georgia in 2007, the value of EIB lending commitments in the country, including the loan signed today, has reached EUR 1.546bn.