Giorgi Kvirikashvili: “For the European Bank of Reconstruction and Development, 2016 was a record year in terms of volume of investments in Georgia.”

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The FINANCIAL — The Prime Minister of Georgia, Giorgi Kvirikashvili, in his interview with Commersant, stated: “For the European Bank of Reconstruction and Development (EBRD), 2016 was a record year in terms of volume of investments in Georgia – historically speaking, the biggest amount of investments was made in Georgia and it is planned to increase this year. Their expectations are very positive.”

FactCheck verified the accuracy of Giorgi Kvirikashvili’s statement.

International finance institution, European Bank of Reconstruction and Development (EBRD), was founded in 1991. The bank is very active in the post-Soviet countries, funds the implementation of projects both in private and public sectors and supports sustainable economic and democratic development of the nations.

In the strategic document of the EBRD, drafted in December 2016, there are four central investment directions, prioritizing the bank’s activities in Georgia:

• Funding of innovative projects in the private sector convergent with Deep and Comprehensive Free Trade Area (DCFTA) standards and obligations

• Funding of projects supporting financial intermediation of the commercial banks

• Funding of projects enhancing Georgia’s transit potential

• Funding of projects improving Georgia’s energy efficiency

The investment archive of the European Bank of Reconstruction and Development indicates that the first funding for Georgia in the amount of EUR 4 million is dated on 23 October 1996. From 1996, up until 2001, total investment of EBRD in Georgia equals EUR 165 million. In 2001-2001, the bank ceased investment activities in Georgia, whilst total amount of investment made in Georgia in the period of 2003-2016 reaches EUR 2.8 billion. Since the entrance of EBRD in Georgia up until the present day, EBRD has allocated EUR 3 billion for 201 projects implemented in Georgia. Of this amount, 41% was spent on energy sector, 27% on industry, trade and agriculture, 24% on finance sector and 8% on infrastructural projects.

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In the period of 2010-2016, EBRD invested EUR 860 million in Georgia. In this period, the biggest amount of money – EUR 248 million was invested in 2016.

According to the currently published information the EBRD will allocated money for TBC Bank’s 3 projects with total value of EUR 94 million in 2017.

Conclusion

European Bank of Reconstruction and Development started to operate in Georgia in 1996 and invested EUR 3 billion in total. Of this amount, 91% was allocated for the private and 9% for the public sector. The amount of money invested by EBRD throughout 2016 in Georgia reaches EUR 248 million and exceeds the analogous data of the previous years.

Giorgi Kvirikashvili’s statement about EBRD’s positive estimate in regard to Georgia is also right. The aforementioned strategic document highlights Georgia’s slow economic growth for the last period and names negative regional factors as a reason behind it. Despite the existing recession, EBRD judges that there is a stable and profitable business environment in Georgia and the country continues to implement the standards and modernize legislation envisaged by the EU-Georgia Association Agreement.

FactCheck concludes that Giorgi Kvirikashvili’s statement is TRUE.

 

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