Finance Ministry Signs Loan Agreements Worth of EUR 181.8 Million with KfW, AFD
The Minister of Finance of Georgia Ivane Matchavariani has signed a €60 million loan with the German Development Bank (KfW) to develop water infrastructure in Batumi and a €120 million loan in total from KfW and French Development Bank (AFD) to develop the country’s energy sector.
The signing took place on October 7 with the participation of the Parliamentary State Secretary in the German Federal Ministry for Economic Affairs and Energy, Thomas Bareiß, the French Ambassador Diego Colas and the Ambassador of the EU to Georgia, Carl Hartzell. The joint efforts of Germany, France and the EU to support Georgia’s Energy Sector Reform receive significant grant contributions from the EU.
The €60 million loan will be used to improve the water supply system in Georgia’s coastal city of Batumi and promote tourism development.
The German side has allocated an additional €1.8 million grant for the energy sector to a grant of €5.7 million which was given by the KfW on June 14, 2019.
The project will provide for the reconstruction of 25 kindergartens per energy efficiency standards in Batumi and the reconstruction of one historic building which will be selected on the basis of negotiations between KfW and Batumi City Hall.
The EU allocated a grant contribution of EUR 8.44 million through its Neighborhood Investment Platform (NIP) to support the Sector Reform agreement. The grant will support the establishment of a strategic, institutional, and financial vision and framework for Energy Efficiency in Georgia, especially in the building sector. It will also promote energy efficiency through a reform program that moves Georgia from a centralized electricity market to an organized market as envisaged by EU’s Third Energy Package. The program’s implementation period will last until 2021.
In 2018, loans for the energy sector were received from KfW (€49 million) and AFD (25 million), while Georgia received €8.33 million grant from the European Union.
By Ana Dumbadze
Photo source: Ministry of Finance of Georgia
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