World Bank allocates $120m for Georgia
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The Georgian Government and the World Bank have signed two financial agreements on an IBRD (International Bank for Reconstruction and Development) loan of $120 million USD to develop the country’s private sector, raise competitiveness and foster inclusive growth.
This financial contribution was designed to implement various measures within the ‘Programmatic Private Sector Competitiveness Development Policy Operation for Georgia’ and the ‘Software Development Policy of Inclusive Growth in Georgia’. Each project will be allocated $60 million USD.
Georgia’s Finance Minister Nodar Khaduri and World Bank Regional Director for the South Caucasus Henry Kerali signed the documents today.
Both projects were approved by the World Bank Board of Executive Directors on April 28, 2015.
This was the first in a series of three Development Policy Operations (DPOs) aimed at strengthening shared prosperity and eliminating extreme poverty in Georgia. This will be done through policies that stimulate private sector productivity, foster investment and create a fair business environment that enables growth by small and medium enterprises (SMEs) and new firms.
"Our Government has successfully implemented a number of important reforms in the framework of the second Competitiveness and Growth Development Policy Operation. The agreements signed today will provide us with further opportunities to continue these reforms. I am pleased to state that over the years a strong cooperation between Georgia and the World Bank has been established,” said Finance Minister Khaduri.
Kerali of the World Bank stated: "These policies have been prioritised in the Government’s development strategy Georgia 2020, which sets out its vision for inclusive development. The DPO series is also a core element of the World Bank Group Country Partnership Strategy (CPS) for 2014-2017, and contributes to the CPS goal of enabling the private sector to become the main driver of employment creation and provider of income opportunities for the bottom 40 percent of the population.”
Meanwhile World Bank Senior Economist and Task Team of the private sector competitiveness program Leader John Gabriel Goddard said: "The policies supported by this DPO are expected to improve the living conditions of Georgian households by enhancing private sector competitiveness and increasing the country’s growth potential. Promoting a business-friendly environment, financial sector development, enhancing social and financial safety nets, and spurring innovation and trade lie at the center of Georgia’s inclusive growth agenda.”
World Bank Senior Economist and Task Team Leader of the DPO program Mona Prasad said the main development challenge the country faced was achieving more inclusive growth. This would require investment in human capital and improvements in private sector competitiveness.
"While private sector development, supported by another DPO series in Georgia, will help create more jobs, this DPO series will help build human capital and support macroeconomic stability and effective policy making,” Prasad added.
Both projects have been offered a flexible loan of $60 million with a 25 year maturity and 14 year grace period.
Since 1992, the World Bank’s commitments to Georgia total approximately $3.47 billion USD. IBRD is a member of the World Bank group.
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