|World Bank Enhances Support to Georgia|
|May 05, 2011|
World Bank Enhances Support to Georgia with Additional Financing of $235 Million for 2011-2013
TBILISI (MMD Newswire) May 4, 2011 -- The World Bank Group has presented today its Progress Report on the Country Partnership Strategy (CPS) for Georgia for 2010-2013. Prepared against the backdrop of the twin crises of the August 2008 conflict and the global economic downturn, the CPS was built around two pillars: (i) meeting post-conflict and vulnerability needs, and (ii) strengthening competitiveness for post-crisis recovery and growth.
"We are very pleased with the strong results from the programs supported by the World Bank," said Asad Alam, World Bank Regional Director for the South Caucasus. "As a result, the Bank is putting US$ 235 million in new financing for the next two years to help sustain economic growth and support the needs of the vulnerable. Much of this will go towards local and secondary roads and regional development."
Key achievements of the Bank-supported programs from 2009 to date have been:
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. These would also help to create short-term jobs and support the economic recovery. The regional development program -- which will 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.
New lending program will be financed through US$ 160 million from IDA and US$ 75 million from IBRD. The IDA/IBRD support to Georgia through the CPS for 2010-2013 will now total US$ 630 million, of which US$ 385 million have already been committed and disbursed. The Bank's current lending portfolio comprises 10 investment projects. The Bank's 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.
In addition, 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," said Thomas Lubeck, IFC Regional Head for the Caucasus. "We see a lot of potential to leverage areas where Georgia has a natural competitive advantage including renewable energy, agriculture, and infrastructure."
IFC began the CPS period coming off a record level of commitments. At the start of fiscal year 2009, IFC invested US$ 224 million in Georgia, including US$ 190 million in the financial sector. In the current CPS period, IFC invested an additional US$ 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 continued banking sector recovery and help the banks expand access to finance for local companies. In 2009, IFC's portfolio clients provided around 5220 MSME loans and held an outstanding MSME portfolio of $416 million. IFC also provided a wide range of advisory services. In the financial sector, these included corporate governance trainings and consultations as well as risk and portfolio management diagnostics to selected banks to improve their risk management practices.
At the same time, IFC has intensified business development efforts in the real sector, agriculture and infrastructure. On advisory side IFC launched a food safety improvement advisory project with targeted seminars for food producers to improve food safety practices in Georgia, boosting competitiveness, exports, and investments. IFC is also advising the Government on simplifying tax policies and procedures for SMEs to reduce administrative burden and improve operations for Georgian companies.
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