Since Georgia joined the Asian Development Bank (ADB) in 2007, the bank has become one of the Caucasus nation’s largest development partners – helping to build climate-resilient infrastructure, develop more livable cities, and implement policy reforms in crucial areas.
ADB also provided considerable support for Georgia’s response to the coronavirus pandemic. As the country looks to its post-COVID future, ADB is preparing to extend its support including into new areas such as climate-smart agriculture and improving the quality of teaching.
This Q&A with ADB Country Director for Georgia Shane Rosenthal outlines the main areas of cooperation in 2022 and beyond.
1. What are the main objectives of ADB’s cooperation with Georgia in 2022?
ADB’s partnership with Georgia is focused on expanding trade, creating more jobs, and combating poverty through the development of economic corridors. ADB is one of the country’s largest development partners, and our active portfolio of projects includes more than $1.7 billion in development assistance.
For several years now, we have been helping Georgia maximize the potential of its road corridors with extensive infrastructure investments to increase traffic capacity, connectivity, and boost economic activity along the country’s key East-West and North-South highways. This is improving market access and the competitiveness of the local economy.
ADB is also helping to develop livable cities in ways that ensure balanced development across rural and urban areas. Substantial investments have been made to enable the delivery of safe water and sanitation services to hundreds of thousands of people, and to strengthen the electricity transmission sector.
During the pandemic, ADB provided $300 million in financing to support government measures to protect vulnerable groups and support businesses. The government’s fiscal stimulus played a critical role in sustaining growth, but this is now transitioning to fiscal consolidation which will ensure public debt remains manageable so that the country remains on the path to sustainable growth.
ADB has been building and sustaining momentum in key policy reform areas such as transport and trade facilitation, water and sanitation infrastructure, agriculture and irrigation, energy, and state-owned enterprise reform. We are also supporting investments in people through education and health, helping ensure urban development is inclusive, and are focused on climate-resilient growth.
Now the challenge is to ensure the safe and sustainable operation and maintenance of new infrastructure assets – so that these remain operational over the long term. Knowledge services and evidence-based policies will play an increasing and central role in our future operations. In fact, a significant part of our assistance is now centered on public sector reforms including public investment management, access to finance, capital markets development, and state-owned enterprise reforms.
2. Are there any particular projects you plan to carry out in Georgia this year and if so, roughly how much has been budgeted for this activity?
In November 2021, ADB approved the $120 million Livable Cities Investment Program, which aims to upgrade existing infrastructure and improve services in urban areas across Georgia to boost economic opportunities and the quality of life. ADB also supported the development and dissemination of urban area guidelines for inclusive cities.
We have also committed more than $1.3 billion to develop strategic transport corridors and secondary roads, which are helping to bring the sector in line with European standards. Ongoing projects are upgrading major sections of the East–West Highway and developing a new climate-resilient roadway along the North–South Corridor that includes construction of the longest tunnel in Georgia.
We are also preparing new programs in education – to increase quality, access, and affordability of gender-inclusive education services for improved teaching and learning – and in agriculture and railways. Knowledge products that bridge global best practices to local experience will be central components of each.
Structural reforms remain crucial, not just for mitigating the impact of COVID-19 but more broadly, for supporting economic growth and job creation – and we will continue supporting Georgia in this critical area.
3. Does ADB plan to implement any projects in Georgia’s energy sector including “green” energy?
Bolstering Georgia’s green and renewable energy potential is critical for environmental sustainability and for addressing the effects of climate change. As part of its private sector operations, ADB was an anchor investor in the green bond issued by Georgia Global Utilities in 2020. This helped the company expand water supply and sanitation in Tbilisi and nearby municipalities, and to refinance debt taken for earlier investments in renewable energy and water operations.
Last year ADB also approved a $100 million policy-based loan to help the government transform the electricity transmission sector into an efficient and financially sustainable operation. The loan augments Georgia’s energy export capacity and electricity market liberalization reforms with its planned establishment of Georgia’s first Energy Exchange – an initiative that is in line with international best practice, where prices are determined by market forces.
In future, we will support innovative approaches in e-mobility, the use of hydrogen technologies, and climate-smart irrigation for a more resilient and diversified economy.
4. What are the prospects for cooperation in new areas between ADB and Georgia?
ADB’s strategic interventions in Georgia will support critical infrastructure, governance and public sector reforms, and human capital development. We are working with the government on a new program for climate-smart agriculture and irrigation, and on expanding operations in education beyond vocational education and training. This means doing more to support skills development and labor market productivity with modernized general education.
We are also continuing to support improved transport and connectivity, water supply and sanitation, livable cities, and the energy sector. As already mentioned, a top priority is completing the missing sections of Georgia’s key trade and transport corridors linking regions with economic activity. This will help Georgia capitalize on its geographic position as a regional trade, transport, logistics and transit hub including through improved commerce and logistics performance.
In doing so, ADB will promote policies and investments to support new technologies, integrate urban development and municipal finance with green and sustainable transport for balanced development and private sector-led growth. One of our top priorities will be to better align our assistance program to the government’s knowledge needs while helping the government advance its climate change agenda. We will develop a dynamic country knowledge plan in 2022, which will inform our programming discussions and the preparatory work for the new country partnership strategy for 2024-2028.
A version of this article was first published by Trend News Agency.