The FINANCIAL — The Asian Infrastructure Investment Bank approved EUR45 million loan to Georgia to mitigate the impacts of the novel coronavirus. The loan provides emergency budgetary support to enable the Government of Georgia to respond to the pandemic more effectively. The financing will enhance inclusive growth and competitiveness, invest in human capital and build resilience by improving connectivity and integration
The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors has approved a loan of EUR45 million to Georgia to mitigate the negative economic and social impacts of COVID-19 and sustain the momentum of pre-pandemic reforms that support economic growth and resilience, as reported by Georgian Public Broadcasting.
Funded under AIIB’s COVID-19 Crisis Recovery Facility (CRF) and cofinanced with the World Bank, the loan will fill the unanticipated financing gap that has arisen due to the impact of the COVID-19 outbreak, which could jeopardize Georgia’s ongoing reforms under the Economic Management and Competitiveness Program (EMCP).
AIIB has created a Crisis Recovery Facility to support AIIB’s members and clients in alleviating and mitigating economic, financial and public health pressures arising from COVID-19. Over the next 18 months (April 2020 to Oct.16, 2021), the Crisis Recovery Facility will offer USD5-10 billion of financing to both public and private sector entities in any AIIB member facing, or at risk of facing, serious adverse impacts as a result of COVID-19.
Before the pandemic, Georgia adopted reforms under the EMCP designed to sustain rapid growth and ensure inclusion, job creation and resilience through measures to strengthen economic management and enhance competitiveness. COVID-19 has caused government financing constraints, creating huge funding needs for the ongoing implementation of reforms under the EMCP.
“The loan provides emergency budgetary support to enable the Government of Georgia to respond to the pandemic more effectively,” said AIIB Vice President, Investment Operations, Konstantin Limitovskiy. “By providing financing to support mitigation measures and safeguard macroeconomic stability, AIIB’s response will help minimize losses and put the country back on the recovery path,” he added.
This loan is the second for Georgia under the CRF, following an earlier emergency assistance of EUR91.34 million approved in May 2020, under which Georgia’s health infrastructure and social protection measures for COVID-19 preparedness were financed.
The financing will enhance inclusive growth and competitiveness, invest in human capital and build resilience by improving connectivity and integration, diversifying sources of finance, and improving the quality of the education system and macro-fiscal management.
As of July, AIIB’s Board of Directors has approved a total of 16 projects amounting to over USD5.9 billion to help 12 members navigate the challenges of these highly uncertain times. AIIB is currently reviewing other projects from clients.
It should be mentioned that, In January-June 2020, China was number one top trading partner (USD 205.1 million) by exports of Georgia. Also, China took third place in the list of top ten trading partners by imports