The FINANCIAL — Georgia will be receiving a total of 4827.48 million USD support and funding from donor organizations and different countries for the period 2008-2013.
According to the Ministry of Finance of Georgia eight international organizations and 20 countries of the globe announced support of 2530.04 million USD and 1615.64 EUR (2297.44 USD) at the Brussels Donor Conference in October 2008.
The majority of directions are in support of the development of infrastructure, industry and the financial sector as well as combating poverty and social problems in Georgia. The FINANCIAL interviewed donor organizations about the major priorities for the years 2010-2011.
EBRD
“Key areas for support in the infrastructure sector will be power and energy, municipal and transit infrastructure,” said Paul-Henri Forestier, Director for the Caucasus, Moldova and Belarus at EBRD.
“In developing the enterprise sector, the Bank will increase funding of local businesses, particularly SMEs and micro enterprises. In the financial sector, the EBRD will expand support to existing and new partner banks in Georgia, as well as developing the non-bank financial sector with a specific focus on leasing, insurance and private pension schemes,” Forestier added.
“EBRD envisages investing 300 million EUR in Georgia in 2010 only. Since the beginning of its operations in Georgia, EBRD has committed over 1 billion EUR in approximately 129 projects in the financial, corporate, infrastructure and energy sectors,” Forestier declared.
The main projects for 2010 at EBRD were: Black Sea Transmission Line (80 million EUR), Tbilisi Railway Bypass (100 million EUR), Poti Port (8 million EUR), Enguri Hydro Plant Rehabilitation (20 million EUR), and Adjara Solid Waste Project (3 million EUR).
In the financial sector EBRD’s key priority is to support the stability of the financial banking sector in particular. The Bank’s focus will be on ensuring adequate levels of capital and supporting the resumption of lending by existing clients in the financial sector.
“Infrastructure rehabilitation and modernisation, and improvement of regional transit infrastructure are important for economic recovery. The Bank will support rehabilitation, construction and expansion investments in the power sector that will help Georgia achieve security of energy supply while facilitating trading of electricity in the region,” Forestier declared.
“Strong emphasis will be put on supporting the enterprise sector. Support to enterprises in general, and micro, small and medium-sized enterprises (MSMEs) in particular, will address their financing needs, support competition through innovation, and development of the tradable sector, in particular manufacturing and agribusiness,” Forestier said.
USAID
USAID has five strategic objectives in Georgia according to Jock Conly, Mission Director at USAID in Georgia. The objectives are broken down into five directions such as to improve economic competitiveness and welfare, strengthen democracy and governance, improve delivery of social services, energy security and help clean the environment.
“In the area of economic competitiveness and welfare we have been helping the Government of Georgia to revise reform policies, laws and regulations that make it easier or more difficult for businesses to get started. The Government has made a lot of progress in this area with our assistance and we have moved up to 11th position in the ease of doing business,” declared Conly.
USAID has supported the identification of specific industries that could be more developed, such as agriculture and tourism. “The key is to identify industries where Georgia has a comparative advantage and is very competitive in global markets. We will continue support of Georgia in both agriculture and non-agriculture sectors,” declared Conly.
“The second objective is strengthening democracy and democratic governance. We can help Georgia to use its own resources in governance more efficiently. We help parliament to strengthen itself as an institution and to become more independent. Moreover, we try to help political parties to be more competitive. Any political party can benefit from our training, what we offer is training of how to do fundraising, how to build a party, develop a platform and how to work with the media,” declared Conly.
Furthermore, USAID helps local government and municipalities to govern more effectively on a local level by involving citizens. “We want to see the media continue to strengthen and become independent, we would like to see clear laws and for media ownership to be more transparent. We are trying to help media outlets improve content and develop more content locally, that’s really relevant to Georgians particularly TV station contents,” said Conly.
The third objective of USAID is for social services and is split into three areas: education, health and the socially vulnerable population. In the education field USAID helps the Ministry of Education and Science to improve its management through development of an educational database of students.
“We are helping the Ministry to strengthen local community councils, develop a funding plan and keep resources according to the priorities. Moreover, we would like to respond to the initiative of the Prime Minister having the idea of developing a technical business university in Batumi. We want to help them do an analysis to decide whether or not to invest in the new university,” declared Conly.
The fourth objective is to enhance energy security. USAID has helped the Government to develop a building system that was instrumentally restoring power throughout the country.
“We are funding construction, including a big portion of the East-West gas pipeline stretching from Senaki to Poti and down to Turkey. This will connect the city of Poti as well as free industrial zone just north of Poti to a gas distribution system, which should be completed by February. Moreover, construction of tunnels and agro-power distribution lines will add a lot of capacity to electricity distribution and create a way to increase electricity export to Turkey,” said Conly.
“We continue to be involved in development of hydro power sights through the country. We have a new hydro power investment promotion project doing technical feasibility studies of 97 small hydro power stations around the country. Private investors have the opportunity to get information and make further investments. There are big resources unrealized in Georgia and the market to export to Turkey,” declared Conly.
In terms of its energy efficiency objective USAID is trying to help Georgians to use their energy resources more efficiently. Not to waste as much electricity and keep the environment free from pollution.
The amount obligated into projects during the fiscal year 2010 (regular and supplemented funds) consists of 339.871 million USD. For the budgets of the main objectives the total amount in 2010 is 46.72 million USD and for the fiscal year 2011/2012 it is 52.612 million USD.
World Bank
The World Bank has provided financing for 50 projects in different sectors totalling over 1.47 billion USD of IDA Credits and Grants, and IBRD loans. Approximately 62% of the Bank’s financing for Georgia is for investment projects while 38% is directed to budget assistance through development policy operations (DPOs).
The new Country Partnership Strategy (CPS) was approved by the Board in September 2009 with new planned IDA/IBRD lending of about 396 million USD. The strategic objectives of the CPS are to meet post conflict and vulnerability needs, and strengthen competitiveness for post-crisis growth.
“The current portfolio consists of 12 active investment projects, financed by 12 IDA Credits/Grants and 4 IBRD loans for a total of 469 million USD, of which about 171 million USD is undisbursed. In addition, the second in a series of Development Policy Operations – DPO2 was approved by the Board in July 2010 with total financing of 50 million USD and disbursed just recently,” declared Inga Paichadze, External Affairs Officer at World Bank.
“Additional Financing to the Regional and Municipal Infrastructure Development Project (45 million USD IBRD) was negotiated in September and will be presented for approval to the World Bank’s Board of Directors in November 2010,” Paichadze added.
According to Paichadze a key social challenge is support for internally displaced persons (IDPs). The Bank is working closely with the UN to assess and monitor the needs of IDPs. The ongoing Regional and Municipal Infrastructure Project provides direct assistance on IDP housing.
The Bank supports the Education Sector of Georgia through the Education System Realignment and Strengthening Programme – a three phase Adaptable Programme Loan (APL) which seeks to effectively realign the objectives of the education system and enhance the policy and the management capacity to improve efficiency, quality and relevance of learning outcomes. The Bank has mobilized 260,000 USD from the Education Programme Development Fund (EPDF) for the financing of international assessment of students’ learning achievements in 2009-2010.
The Bank supports the agriculture sector of Georgia through the Rural Development project and the Avian Influenza project. The Bank is also carrying out a Rural Investment Climate Assessment study.
“The World Bank is already financing the most congested section through its series of East-West Highway Operations, as well as rehabilitating Kakheti roads and various secondary and local roads of Georgia. The Bank also finances technical assistance components to strengthen capacity of the Roads Department as well as local government units in management and maintenance of the road network,” declared Paichadze.
“The Bank has been providing significant support through the Georgia Municipal Development Fund (MDF) to assist in improving the intergovernmental fiscal relationship, raising the capacity of local governments, restoring infrastructure, improving efficiency and reliability of selected municipal infrastructure and service, and improving housing and infrastructure conditions of IDPs. Investments results in improved access to, and quality of water, improved energy efficiency and reduced transport time and cost on local roads. In 2009 the Bank extended a new Regional & Municipal Infrastructure Project in the amount of 40.00 million USD IDA, which is providing both regular and emergency support in light of the August conflict. The Bank is also administering a Cities Alliances Grant for Tbilisi to develop a City Development Strategy,” declared Paichadze.
European Commission
The National Indicative Program (NIP) priority areas for Georgia period 2007-2010 are the following: democratic development, rule of law and governance (31.5 million EUR), economic development (31.5 million EUR), poverty reduction and social reforms (38.4 million EUR), and peaceful settlement of Georgia’s internal conflicts (19.0 million EUR).
NIP priority areas for Georgia period 2011-2013 are the following: democratic development, rule of law and governance (45-63 million EUR), trade and investment, regulatory alignment and reform (27-45 million EUR), regional development, sustainable economic and social development, poverty reduction (63-81 million EUR) and peaceful settlement of conflicts (9-18 million EUR).
Sida
Sida with the Embassy of Sweden have allocated a total of 100,000,000 Swedish Kronna for projects to be financed in the years 2010-2013. The projects cover different aspects and mainly address the issues of IDPs, infrastructure, agriculture industries, support with state structures as well as promotion of different activities such as an open fun football school in the South Caucasus.
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