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EBRD issues new strategy for Georgia
Georgia, among the poorest countries of the EBRD’s 27 countries of operations,
has achieved notable progress since the elections of a new president and
government earlier this year, the Bank says in its new strategy
for the country.
The new authorities have addressed key problem areas, namely those affecting
Georgia’s investment climate, such as organised crime and corruption,
governance and structural issues in vital sectors such as energy and the weak
external position with high foreign debt. The government’s commitment,
willingness and ability to reform are crucial to meet the significant
challenges the country faces.
Georgia forms part of the EBRD’s “Early Transition Countries” (ETC) initiative
launched this year to stimulate market activity in the Bank’s poorest
countries of operations. The initiative aims to stimulate market activity by
using a streamlined approach to financing more and smaller projects,
mobilising more investment, and encouraging economic reform. The initiative is
part of an international effort to address poverty in these members of the
Commonwealth of Independent States (the former Soviet Union). The Bank will
accept higher risk in the projects it finances in the ETCs, while still
respecting the principles of sound banking.
The EBRD has defined the following priorities in its new strategy for Georgia:
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In infrastructure the focus will be on power and energy, regional transport,
water utilities and telecommunications. New investments would be considered
mainly on a non-sovereign basis – meaning without a guarantee from the
national government – and only if accompanied by appropriate regulatory and
institutional reforms.
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The Bank will expand funding of local enterprises, including micro, small and
medium-sized enterprises and larger private enterprises, directly and through
local banks.
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In the financial sector, the EBRD will support existing and new partner banks
using the full range of debt instruments and will seek suitable equity
investments.
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The Bank will intensify its policy dialogue with the authorities in an effort
to improve the investment climate for local and foreign investors.
As of mid-2004, the EBRD has signed 35 investment projects in Georgia in the
energy, transport, agribusiness, general industry and banking sectors worth
more than €240 million.
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