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Georgia a country that remains attractive for IFIS in 2019

Since its independence, Georgia as attracted many capital of the IFIs in particular, to modernise its infrastructures.

Georgia a country that remains attractive for IFIS in 2019

Georgia, thanks to its political stability, its geographical location and the quality of its signature, has attracted since its independence, many capital of the IFIs in particular, to modernise its infrastructures. The year 2018 marks the renewal of the partnership frameworks of most donors. The latter have again chosen this year to consolidate their relations by renewing their commitment in Georgia. The year 2019 is in line with the durability of volume commitments with a strong new orientation towards the education sector.

Multilateral donors, the main providers of capital in Georgia, continue to set aside their financial allocations for infrastructure and regional connectivity projects while weighing on reforms for development and support to the most vulnerable populations

World Bank

In 2018, the World Bank unveiled its new partnership framework, the Country Partnership Framework (CPF), for the period 2019-2022 with the objective of developing sustainable and inclusive growth and improving the living conditions of the population. This new framework has been developed in collaboration with the government and is part of its vision of development of the country and its program "Georgia 2020" which is articulated around four axes of reform:

  • the economy,
  • the education ,
  • spatial planning and
  • governance.

With this new partnership framework, the institution is adopting a strategic shift aimed at rebalancing its portfolio, which is now largely focused on infrastructure, which accounts for 78% (and only 60% for the east-west motorway corridor and roads). the risk of lowering its disbursement rate.

As a reminder, since Georgia became a member of the World Bank in 1992, the World Bank Group has financed 77 projects, for a total of US $ 2.8 billion, and has an active portfolio of 11 investment and development of public policies projects, amounting to USD 699 million.

The history of the World Bank's partnership with Georgia:


The projects constituting the new partnership framework are currently in the preparation phase (horizon end of 2019) and will focus on

  • education, with limited investments in infrastructure, construction of new school under the respect the social and environmental standards of the Bank,
  • the development of the health system and the social system, with a probable investment in information systems,
  • energy, with projects that are respectful of the environment
  • regional development.


Georgia has also been a member of the International Finance Corporation (IFC) since 1995. This organisation of the World Bank Group has the potential, unlike the IBRD, to provide loans to private investors. According to the latest available figures (31-Dec-16), IFC has provided total financing in Georgia of over USD 1.7 billion in the following sectors: Financial Services, Agribusiness, Construction and Infrastructure. Note IFC's current project, PGC Housing, signed on May 22, 2018 for $ 20 million.


The EBRD has a flawless commitment in Georgia with a balance sheet in August 2018 (latest available data) of 233 projects and € 3.2bn in funding, of which 80% is in the private sector.

A portfolio of 80 projects is currently under study for an additional € 812 million.

The EBRD's share of capital investment remains stable at 5% compared to 6% in 2017.

The sectoral breakdown of the EBRD's activities in August 2018 is

  • energy for 33% of the portfolio and which continues to strengthen with three hydropower projects to start soon
  • financial institutions for 32% whose volumes have increased significantly with the concentration of the banking sector and the slow development of the manufacturing and private sector,
  • industry and commerce with 28% funding for two agribusiness operations, and finally
  • infrastructure with 7% reflecting the EBRD's intervention strategy.

For more details :

As in 2018, the EBRD is also expected to re-allocate a USD 750 million credit facility (all countries) in 2019 for projects under its Non-SME Direct Finance Framework (DFF) program. Most of the projects in this program are investments in industry, commerce and agribusiness


The European Investment Bank (EIB) supported 21 projects with a total loan volume of over EUR 1.5 billion.

Of the most recent projects, a EUR 250 million loan will be used to modernize priority road infrastructure, and EUR 3.5 million of EU technical assistance support to finance the completion of the rehabilitation of the cascade of the hydropower plants of Enguri and Vardnili, the largest hydropower complex in the country. In addition, under the Eastern Partnership Countries Technical Assistance Trust Fund (FFATPO), an EIB expert based in Tbilisi will work with the Ministry of Regional Development and Infrastructure (Directorate of Roads) in the region to improve the preparation and implementation of the large and technically complex financed by EIB in the road sector in Georgia.

In September 2018, the EIB announced the release of a € 30 million loan to TBC Bank to improve access to finance for 600 small and medium-sized enterprises.

The European Union

The European Union remains one of the most active cooperation institutions in Georgia, including since 2016 the establishment of a free trade area and a Deep and Comprehensive Free Trade Area (DCFTA).

Georgia is the 5th largest country by the volume of aid received from the European Union per capita.

The European Union is Georgia's largest trading partner, absorbing 24% of Georgia's total exports and providing an annual aid package of more than EUR 120m.

The European Neighborhood Policy Action Plan in Georgia (ENP) includes an indicative envelope for 2017-2020 of between EUR 371 and 453 million, divided into the following sectors:

  • economic development and outlets including 40% smart, sustainable and inclusive growth with an envelope of between EUR 148 and 181 million,
  • institution-building and good governance, including the strengthening of the rule of law, responding to the needs of security issues for 20% with an allocation between EUR 74 and 91 million,
  • connectivity, energy efficiency, environment and climate change for 15% with an allocation of between EUR 56 and 68 million
  • Mobility and interpersonal contacts, including support for the continued implementation of visa labeling and vocational training for 10% with an allocation between 37 and 46 M EUR,
  • additional support for capacity building and institutional strengthening between EUR 19 and 23 million,
  • additional support for the development of civil society between EUR 19 and 23 million,
  • additional support for the communication strategy between EUR 19 and 23 million.


The E5P Partnership (Eastern Europe Partnership for Energy Efficiency and the Environment), is a multi-donor fund set up in 2010 for Ukraine with the aim of unlocking investment in the fields of environment and energy efficiency. The fund has been active in Georgia since 2013. The fund operates according to its own rules, with the EU (DG Near) chairing the assembly as the main contributor (the main European contributors are SE and DE), the EBRD ensures management.

The EIB, the European Commission, the EBRD, the Nordic Investment Bank and the World Bank are part of the Partnership's steering committee, which is its main operational body. France is not a member of the Fund. Note that the Fund should cease operations in December 2019, an extension of its activities until 2024 must be negotiated.

Asian Development Bank

The Asian Development Bank (ADB) is one of the most committed donors in Georgia. In June 2018, ADB President Takehiko Nakao visited the country to reaffirm the institution's commitment and announce the mobilization of more than 1.2 billion USD of funding for the period 2019-2021.

In September 2018, ADB unveiled its new Partnership Framework for the period 2019-2021 (Country Operations Business Plan, COBP), which builds on the previous partnership framework by focusing on sustainable transportation, regional connectivity and the development of economic corridors.

As a reminder, the ADB has financed 56 projects to date in Georgia for financing over USD 2.3 billion, of which transport, water and energy, its first three sectors of intervention: with a respective sectoral distribution of its portfolio of 75%, 10% and 9%. The Bank also has 5 non-sovereign collateral transactions for a total amount of USD 330 million. The latest detailed information is available on

Asian Infrastructure Investment Bank

The Asian Infrastructure Investment Bank (AIIB) is a newcomer to the market, which has just co-financed with ADB its first project in July 2017. This is the Batumi Bypass Road for USD 114 million. The AIIB is also in the process of financing USD 100 million for the modernisation project of the Nenskra hydroelectric plant (280 MW), the total amount of which amounts to USD 1.03 billion.

Japan International Cooperation Agency

The Japan International Cooperation Agency (JICA), began its cooperation with Georgia in 1997, but only opened its first office for the Caucasus in July 2017. The main objectives of the Agency are to

  • improve the country's infrastructure, including the east-west highway corridor through linked loans (phase II, 70km lot, USD 350m) and
  • harmonise the standard of living of the population, through mainly technical assistance (training of government representatives, support for agricultural cooperatives).


KfW is by far the largest bilateral donor in Georgia, established since 1993. The main sectors of intervention are:

  • energy,
  • financial sector,
  • urban development, and
  • environment.

KfW is the main donor in Georgia for the energy sector: the institution is active in the electricity sector (they have been financing GSE for 20 years), energy efficiency (pilots in Batumi and discussion with EBRD on an EE program in public buildings), the gas sector (underground gas storage infrastructure co-financed with the EIB, € 350 million).

KfW is also present in the water sector (so far only in Adjaria, but is preparing a multi-city program on the UWSCG perimeter), waste, the financial sector (contribution to the creation of ProCréditbank ), internally displaced persons (IDPs) with grant tools, and protected areas (also on donations).

Three main financial instruments are available:

  • concessional sovereign loans: for projects defined in intergovernmental discussions held every two years,
  • "promotional" (non-concessional) sovereign loans: for intergovernmental projects,
  • grants: IDPs, protected areas, preparation support (feasibility studies) and project implementation (technical assistance).


The French Development Agency (AFD) opened its regional office in 2016 in Tbilisi and has managed to position itself as a bilateral and regional donor and in coordination with multilateral programs. The first AFD project in Georgia, signed in 2017, is underway. This is a public policy loan of € 60m, co-financed by the World Bank and accompanied by a € 500k FEXTE grant for a technical assistance program coordinated by Expertise France to support the creation and structuring of the new pension agency.

Since then, AFD has signed two new multiannual public policy loans, one in support of the reform of the electricity sector and the promotion of energy efficiency co-financing with KfW (€ 25m for the first tranche - program on 4 years), the other in support of the reforms of social protection, the health system and the care of internally displaced people (35M € for the first tranche - program over 3 years). These two operations will also be accompanied by technical assistance financed by FEXTE, which will highlight French expertise. Other projects are being prepared or discussed with the Georgian authorities, including a water infrastructure modernisation program in the Khashuri region or a regional development project.

The new instruments, namely the issue of bonds, microfinance and leasing, although embryonic, are beginning to attract donors and to structure themselves. Bonds issued by large private companies complement public financing capacity. In the same way that microfinance companies are structured, while remaining for the moment minor actors.


Bonds' emission

Bonds, which are still too few in number and of limited value, should enable in the medium term to release financing capacities of the banking institutions and large groups with public capital, notably the companies belonging to the State Fund Partnership Fund which issued bonds on foreign markets with more or less success.

The year 2018 was thus only marked by a cumulative issuance of USD 350 million. It should be noted, however, that rating of Georgia by the agency FITCH (BB-) was potively upgraded, passing the forecast in November from stable to positive.

As a reminder, it is estimated that the 2016 issuance of Georgian Oil and Gas Corporation marks the start of bond issues by companies owned by the JSC "Partnership Fund" that should be follow and monitored in their development. In addition, to note the Georgian Railways' issue, the first to make a bond issue of 500 million USD on the London market, which was poorly structured; the company is currently suffering from under-consumption of the line since the main operation to which the issue was affected, namely the construction of the deepwater port of Anaklia, may not be realised in its current structure. While the BGEO Group's USD 350 million issue in 2016 was followed by a second successful transaction, financed by the IFC and ISIC. It should be noted that none of the French banks took part in these issues, but the Société Générale testified its interest in Georgian financial instruments and will strive to support the SG's teams.

Microfinance and leasing

These are two tools growing in the Georgian financial market. The microfinance landscape is made up of 88 micro-credit institutions (MFIs) created from 2006, only 3 of which are of sufficient size to attract financing from IFIs (AFD, EBRD, ADB). This is Finca, Credo and Crystal. In 2018, the Central Bank introduced a regulation to institutionalise microfinance players and force them to have a minimum capital and to capture interest rates at 100% annual.

Regarding leasing, and in the absence of venture capital, four main players emerge: AG leasing, TBC leasing, Georgian leasing company and Alliance. Alliance founder Aieti Kukava has also inaugurated the first Tbilissi fair and trade fair, dedicated to leasing. It was also an opportunity for him to launch the Association of Leasing Companies. The sector is trying to organize itself.

Finally, the development of the capital market in Georgia is monitored by the IMF in the framework of its missions under Art.4 for reasons of financial stability, access to credit, the dollarisation policy of the economy and NPLs (non-performing loans).

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