Georgia

With one foot in Asia, the other in Europe, Georgia is a key country in the South Caucasus. A series of reforms has modernized the country, but it suffers from socioeconomic fragility and an unstable geostrategic environment. Since 2012, AFD has been providing support under a mandate for “green and inclusive growth,” involved primarily in urban and rural development, infrastructures, social protection, and renewable energy.
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City limits of Tbilisi, Georgia
Georgia and afd: increasing the country’s economic potential and boosting growth
Tbilisi, Georgia

Developing clean, renewable energy

Inguri hydroelectric dam, energy, Georgia

Developing clean, renewable energy

In 2017, Georgia joined the Energy Community. This requires the country to transpose European energy directives.

AFD is bolstering the country’s efforts to structure the energy efficiency sector and implement the European Union’s Third Energy Package (which is designed to continue opening up the domestic electricity market to competition). Since 2018, it has worked alongside the KfW to support reforms of the electricity market and promote public policies on energy efficiency via a four-year program of public policy loans.

The Georgian government has also received AFD support via a FEXTE grant of €250,000 to implement technical assistance from French entities including EDF.It aims to help public electricity stakeholders model the country’s energy mix over the medium to long term.

This reform program should help Georgia initiate an energy efficiency policy, thus strengthening its economy and setting itself on a trajectory compatible with the energy transition in keeping with the Paris Agreement.

Scaling up our actions in the South Caucasus

Tbilisi, Georgia

Supporting rural development and agriculture

Access to credit is currently an obstacle to development for agriculture in Georgia. Despite the government’s introduction of a subsidy for agricultural loans in 2013, the volume of loans awarded in the sector remains very low, particularly for small- and mid-size family farms and cooperatives. 

To help small farms access financing, AFD is funding a technical assistance program via a delegation of funds from the EU’s Neighbourhood Investment Platform (NIP)—East worth €4 million. This program includes an initial phase of identifying promising small, semi-commercial farms and cooperatives, setting up a pilot mechanism to provide operating advice, considering the implementation of innovative financial tools and providing ad hoc expertise to financial institutions.

Proparco, AFD’s private sector subsidiary, will also provide two microfinance institutions with two lines of credit for €10 million and €7 million.

Supporting the health and social protection sector

Batoumi, city, buildings, Georgia

Supporting the health and social protection sector

Social protection is a crucial topic in Georgia. The transition to a market economy and changes in the working world have given rise to new challenges for the country, which has begun overhauling its healthcare system and adopting a new retirement system.

In order to offer the Georgian population greater security in the face of social risks, AFD is supporting these changes. In 2017, it awarded an initial grant of €60 million to Georgia as cofinancing of the World Bank program designed to support competition in the private sector. This funding comes with a technical assistance program coordinated by Expertise France, which aims to support the implementation of retirement reforms.

Since 2018, we have been supporting Georgia’s reforms of its social protection systems with a 3-year public policy loan, and we are focusing our support on three sectors of social action: social protection, mental health, and assistance to internally displaced persons from Abkhazia and South Ossetia. This support includes a technical assistance program run by Expertise France.
 

Providing high-quality water and sanitation services

robinet, eau potable, Guyane

Providing high-quality water and sanitation services

Since 2019, AFD has also been involved in the water and sanitation sector. To this end, it is funding a project to modernize water and sanitation services in the secondary city of Khashuri via a €58-million loan. This funding comes with a technical assistance and investment grant of €7.15 million delegated by the EU’s Neighbourhood Investment Platform (NIP) – East to AFD.

5
projects financed since 2012
€250.7
million committed in Georgia since 2012

Georgia is a country with 4 million inhabitants at the crossroads between Europe and Asia. For some fifteen years now, this former Soviet bloc country has been engaged in major economic and political reforms. These reforms have been fruitful: the country has been modernized.

However, its geostrategic environment is sometimes a source of instability, particularly the conflict between Armenia and Azerbaijan and the 2008 conflict with Russia, followed by an embargo. Georgia also suffers from a number of socioeconomic weaknesses, which have been exacerbated by the international financial crisis.

The country consequently needs to find the resources to achieve economic stability. Georgia can bank on the boom in tourism and an agricultural sector with strong potential, while taking advantage of its strategic position between the hydrocarbon producing areas of Central Asia and Europe.

AFD has been providing support to Georgia since 2012 under a mandate for “green and inclusive growth” and opened its office in capital city Tbilissi in 2017. For a total of €250.7 million in financial commitments, these projects have focused on urban and rural development, infrastructures, governance and renewable energy. AFD supports the country via sovereign and non-sovereign loans and European grants under the Neighbourhood Investment Platform(NIP) – East.

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