A decade of success: the EU bank marks ten years of activities in Georgia with major new loans
- Release date: 13 July 2017
- Reference: 2017-196-EN
The European Investment Bank (EIB) marked the tenth anniversary of its activities in Georgia on Thursday with major new loans and a keynote speech by Vice-President Vazil Hudák at the 14th Batumi International Conference.
A EUR 250m loan, signed by EIB Vice-President Vazil Hudák in the presence of Georgian Prime Minister Girogi Kvirikashvili and European Commission Vice-President Maroš Šefčovič, will be used to upgrade Georgia’s priority road infrastructure. In addition, the EU bank increased its support by EUR 3.5m to finance the completion of rehabilitation works at Georgia’s largest hydropower complex, the Vardnili-Enguri HPP cascade.
In the framework of the Eastern Partnership Technical Assistance Trust Fund (EPTATF), an EIB expert based in Tbilisi and paid by the EPTATF will work with the Ministry of Regional Development and Infrastructure (Road Department) towards enhancement of the preparation and implementation of the large scale and technologically complex road sector investments financed by EIB in Georgia.
Delivering a keynote speech at the 14th Batumi International Conference entitled “Georgia’s European Way - Ensuring Regional Stability”, Vice-President Hudák highlighted the successful cooperation between the EIB and Georgia, where the Bank has so far supported 21 projects with a total loan volume of over EUR 1.5bn. A regional EIB office was opened in Tbilisi in 2015.
“In Georgia, we are marking ten years of activity this year – ten successful years since we signed our Framework Agreement with the government and started looking for projects in which we could invest”, noted Mr. Hudák in his speech at the conference. “Our ultimate goal is job creation, economic growth and improved living standards and the loans that we signed today go firmly in that direction.”
Maroš Šefčovič, Vice-President of the European Commission, stated: “The European Union and Georgia are closely linked, notably through the Association Agreement and its economic pillar, the Deep and Comprehensive Free Trade Agreement. The European Union's commitment to economic development, sustainability, and energy transition does not end at our borders. That is why the Energy Union is also an outward looking project which involves Georgia, an important partner of our Neighbourhood Policy. Investment loans into transport infrastructure and clean energies such as that signed today are instrumental for Georgia and the whole the region.”
First Vice-Prime Minister, Minister of Finance, Dimitry Kumsishvili: stated: “Ten years after entering Georgia, the EIB is set to become the country’s leading public sector financer and we strongly appreciate the existing cooperation with the EIB. The EIB’s activities/actions are country-tailored and we believe that the EIB-financed projects will yield significant results. At the same time, as we all know, the private sector is a key driver for growth, employment and innovation and we are looking for the EIB to increase the volume of operations in the private sector. The EIB has a lot to share with us - the DCFTA initiative and InnovFin being other examples.”
The EUR 250m loan is the second and last tranche of a EUR 500m framework loan for the construction and rehabilitation of approximately 253km of priority primary and secondary roads identified by Georgia’s Government for the 2017-2020 period.
The project, which will include road safety elements, will enhance both international connectivity – notably on the East West Highway, part of the extended Trans-European Transport Network – and domestic mobility. This will strengthen vital links between Georgia, Ukraine and Europe through the Black Sea ports, and also to Armenia, Azerbaijan and Turkey. The project is significant particularly in the context of the EU-Georgia Association Agreement, which includes a Deep and Comprehensive Free Trade Area Agreement, helping develop more efficient, reliable and safe transport connections for the benefit of Georgian citizens.
The extension of the EIB’s support for the Vardnili-Enguri HPP cascade follows the EUR 20m loan provided by the Bank in 2010 in line with EU policy guidelines for EIB activities in the Eastern Partnership and supported by a EUR 5m grant from the European Commission. The additional EUR 3.5m in funding from the EIB will help to finalise a rehabilitation programme concerning civil works as well as electrical and hydro mechanical works. This additional loan will provide assistance to secure the completion of a project that is expected to have a significant impact on Georgia’s hydroelectricity supply.