ADB's Work in Georgia

Located at the crossroads of Europe and Asia, Georgia is an important node for regional trade flows and has a unique geographic advantage for market integration with the rest of the world, including the European Union.

Old Town (Altstadt) is the historic city center of Tbilisi – Georgia's capital – boasting of old architecture, cobblestoned streets, and great finds.

The Government of Georgia has taken steps to deregulate the economy, streamline bureaucracy, and combat corruption. Committed to an inclusive growth process, the government has considerably increased social sector funding and made public expenditure transparent. Solid economic growth driven by the private sector is expected to support Georgia’s development and reduce the country’s poverty and unemployment.

ADB began its partnership with Georgia in 2007 and is one of the country’s largest multilateral development partners.

The ongoing $80 million Secondary Road Improvement Project includes 50 km of road rehabilitation to improve access for residents and tourists in the Kharagauli district.

In 2019, ADB committed $278 million for the rehabilitation of the East–West Highway’s Shorapani-Argveta section (14.7 km). This follows the 2018 commitment of $300 million for the Khevi–Ubisa section (12 km). Both investments are constructing four-lane sections of highway and strengthening the institutional capacity of Georgia’s Roads Department. Under these projects, ADB has mobilized $1.05 billion in cofinancing.

ADB also committed $415 million for the flagship North–South Corridor Project (Kvesheti-Kobi) in 2019, with cofinancing of $60 million from the European Bank for Reconstruction and Development. The project will improve road safety by constructing 23 km of climate-resilient highway and about 5 km of all-weather access roads.

A new 23-km highway bypassing the Jvari Pass in northeast Georgia will enhance road safety and boost the country's position as a regional trade hub and tourist destination.

The $500 million Road Corridor Investment Program was completed in September 2019. It includes a recently opened 34 km bypass that diverts heavy-vehicle traffic around the popular tourist destination of Kobuleti, enhancing the town’s business and recreational environment.

The $300 million Sustainable Urban Transport Investment Program is revitalizing Georgia’s public transport network and developing efficient transport systems in key urban areas. Meanwhile, the $500 million Urban Services Improvement Investment Program, scheduled for completion in March 2021, is delivering safe water and sanitation to 13 towns and regional cities across the country.

Tbilisi subway.

These recent investments complement ADB’s broader contribution to Georgia’s development over the past decade. Among other achievements, the bank has helped provide four new and upgraded power substations to reinforce Georgia’s energy grid, strengthen the country’s public debt and budget management, reform the pension system, develop capital markets, and promote private investment to help create jobs and provide better social protection to families.

Nonsovereign Operations

As a catalyst for private investments, ADB provides financial assistance to nonsovereign projects and financial intermediaries. Total commitments from ADB’s own funds (in equity and direct loans) in 2019 amounted to $3.00 billion for 38 transactions in economic and social infrastructure, the finance sector, and agribusiness. ADB also actively mobilizes cofinancing from commercial and concessional sources. In 2019, ADB mobilized $3.28 billion of long-term cofinancing and $3.69 billion of cofinancing in trade finance, microfinance, and supply chain finance programs. Total outstanding balances and commitments of nonsovereign transactions funded by ADB’s own resources stood at $13.78 billion as of 31 December 2019.

Financing Partnerships

Financing partnerships enable ADB’s development partners, governments or their agencies, multilateral financing institutions, and commercial organizations to participate in financing ADB projects. The additional funds are provided in the form of loans and grants, technical assistance, and other nonsovereign cofinancing such as B loans, risk transfer arrangements, parallel loans and equity, guarantee cofinancing, and cofinancing for transactions under ADB’s Trade Finance Program and Supply Chain Finance Program.

ADB began cofinancing operations in Georgia in 2010. Since then, sovereign cofinancing commitments for Georgia have amounted to $1.04 billion for four investment projects and $2.25 million for two technical assistance projects. Nonsovereign cofinancing for Georgia has amounted to $152.02 million for two investment projects.

In 2019, Georgia received $60 million in loan cofinancing from the European Bank for Reconstruction and Development for the North–South Corridor (Kvesheti–Kobi) Road.

Projects Cofinanced, 1 January 2014–31 December 2018

Operational Challenges

Disparities in income levels and employment opportunities exist across Georgia, especially between rural and urban areas. One key to addressing these disparities is expanding access to finance in peri-urban and rural areas. ADB has so far helped over 14,000 micro, small, and medium-sized enterprises to better access business development support and financing via start-up grants and commercial loans.

Old woman sells pottery along the roadside in Kutaisi, Georgia.

Georgia’s high unemployment rate reflects a lack of skills to match labor market demands. ADB will support the government’s education sector reforms to deliver appropriate skills and enhance labor productivity.

The bank will also assist Georgia in leveraging its facilitating infrastructure and bilateral trade agreements to better integrate into global value chains.

Future Directions

ADB will support Georgia’s efforts to develop an efficient and sustainable transport network, in line with making the country an international gateway. This includes creating corridors linking Georgia to Azerbaijan in the east, the Black Sea in the west, Armenia in the south, and the Russian Federation in the north. ADB also plans to finance improvements to secondary roads to connect small economic centers along these corridors. Financial and technical assistance will be extended for the integrated development of urban areas, turning transport corridors into economic corridors.

ADB will also support initiatives to deliver public infrastructure through public–private partnerships. The bank has established within its Georgia Resident Mission a regional hub of its private sector department to provide integrated development solutions within the country and across the region.