BUSINESS
WB enhances its support for Georgia by USD 235 million
12 May, 2011

World Bank will be disbursing additional USD 235 million to Georgia within the frame of the Country Partnership Strategy for Georgia for 2010-2013. The financing will be spent on needs of socially vulnerable people, as well as on regional and road infrastructure development.
The World Bank (WB) continues supporting Georgia through long-term preferential credits. The World Bank Group having presented its Progress Report on the Country Partnership Strategy (CPS) for Georgia for 2010-2013 on May 4, 2011, underlined “strong results

from the programs supported by the World Bank” that encouraged the WB to earmark additional USD 235 million to Georgia in the next two years “to sustain economic growth and support the needs of the vulnerable” Asad Alam, World Bank Regional Director for the South Caucasus, said. Much of this financing will go towards local and secondary roads and regional development.
Prepared against the backdrop of the twin crises of the August 2008 conflict and the global economic downturn, the CPS was built around two pillars as following: meeting post-conflict and vulnerability needs, and strengthening competitiveness for post-crisis recovery and growth.
Strong results of the WB-supported programs [in Georgia] from 2009 to date goes as following: of over 600 km of roads were rehabilitated,  about 20 thousand person-months of employment created and public access to markets and social services improved; seven new schools were constructed, serving 4150 students and employing more than 300 teachers; over 1800 health specialists were trained in family medicine; a 25-bed hospital was constructed in Ambrolauri, Racha region of Georgian highland; a primary health care center was opened in the administrative center of Gori serving about 69 thousand beneficiaries 10 thousand of which are Internally Displaced People (IDPs); the targeted social assistance (TSA) scheme was scaled up to cover 408 367 beneficiaries; expansion of e-filing system for all tax payments to 75% of all declarations from 10% in mid-2009 contributed to the improvements in the business environment.
The new USD 235 million worth lending program includes USD 160 million from International Development Association (IDA) and USD 75 million from International Bank for Reconstruction and Development (IBRD) - both long-term loans with about 10 years of grace period.
The IDA/IBRD support to Georgia through the CPS for 2010-2013 will now total USD 630 million out of which USD 385 million have already been committed and disbursed. The Bank’s current lending portfolio comprises 10 investment projects and its lending program is going to be underpinned by analytical and advisory services focusing on such key areas as sources of growth, expenditure efficiency, poverty and inequality analysis, and skills.
The Bank will continue with an annual Development Policy Operations (DPOs) series that would support further improvements in social safety nets, fiscal efficiency, and competitiveness.  Investments in secondary and local roads will be deepened to support domestic connectivity and access to markets and public services, especially in rural areas.  The regional development program scheduled to be piloted in the Kakheti region - will build upon the delivery of public services, transport links with Tbilisi and trade logistics, and the potential for targeted interventions to foster growth in selected sectors. 
In addition, International Finance Corporation (IFC), a member of the World Bank Group, will continue to invest in private sector initiatives.
“After large investments in the financial sector to respond to the global financial crisis, IFC is now focusing on sectors which will remove constraints to longer term growth,” Thomas Lubeck, IFC Regional Head for the Caucasus, said. ”We see a lot of potential to leverage areas where Georgia has a natural competitive advantage including renewable energy, agriculture, and infrastructure.”
In 2009 IFC invested USD 224 million in Georgia including USD 190 million in the financial sector. In the current CPS period, IFC invested an additional USD 41 million in the banking sector in risk management products, trade finance and credit lines for small and medium enterprises (SMEs) in order to support banking sector recovery and help the banks expand access to finance local companies.
IFC’s portfolio clients provided loans to around 5220 Micro Small and Medium Enterprises (MSME) and held an outstanding MSME portfolio of USD 416 million. It also provided a wide range of advisory services in the financial sector as well as in the real sector, agriculture and infrastructure. On advisory side IFC launched a food safety improvement project with targeted seminars for food producers to improve food safety practices in Georgia. To improve business operation in Georgia IFC is also advising Georgian government on simplifying tax policies and procedures for SMEs.

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