The loan agreement was signed at the EBRD Annual Meeting in London today by the Minister of Finance of Georgia, Nodar Khaduri, and EBRD President Sir Suma Chakrabarti.
Investment to cut emissions and improve mobility
The EBRD is bringing modern low-floor buses to Tbilisi in response to the ever-growing demand for public transport in Georgia’s fast-growing capital city.
The Bank is extending a €27 million sovereign loan to Georgia to be on-lent to Tbilisi City for the benefit of the Tbilisi Transport Company to acquire up to 200 new compressed natural gas buses. The new vehicles will improve service for the city’s 1.2 million inhabitants by increasing the reliability, safety and efficiency of public transport while benefitting the environment by reducing emissions.
This project is part of a wider undertaking that aims to enhance public transport mobility for Tbilisi and will include a restructure of current bus routes as well as priority lanes, where possible, to allow more fluid movement for the new buses in the city. The new low-floor buses will accommodate passengers with limited movement, including the elderly and disabled.
The EBRD loan is supported by a capital grant of up to €7 million provided by the Eastern Europe Energy Efficiency and Environment Partnership (E5P), a multi-donor fund managed by the EBRD. The European Union is the largest contributor to the E5P fund for Georgia. Other donors include the Czech Republic, Denmark, Estonia, Georgia, Germany, Lithuania, Norway, Poland, Sweden and the USA.
The loan agreement was signed at the EBRD Annual Meeting in London today by the Minister of Finance of Georgia, Nodar Khaduri, and EBRD President Sir Suma Chakrabarti. “I am very proud to sign this agreement which marks our successful cooperation in the public transport sector in Georgia”, Sir Suma said.
“This is yet another step to strengthen our longstanding engagement with the city of Tbilisi. We are confident that the new buses will be well received by the public and improve environmental and safety standards. This will boost demand for public transport and facilitate its expansion. Consequently, we hope to develop similar projects with other cities in Georgia.”
As part of the project, the EBRD will also provide €1.15 million in technical cooperation funds to assist the development of a Green Cities Action Plan for Tbilisi that will include the restructuring of bus routes, corporate development and stakeholder participation programmes. Additionally, a gender advisory programme will introduce human resource policies and standards to respect equal opportunities by promoting gender equality, career progression and raising the number of women employed by the company. To date, donor funds have been pledged by the Slovak Republic, the Czech Republic, Spain and the EBRD Shareholder Special Fund.
Bruno Balvanera, EBRD Director for Caucasus, Moldova and Belarus said: “Our priority is to improve lives for the citizens of Georgia and therefore we are increasing our investment in public transport and municipal environmental infrastructure all around the country.”
The EBRD is a leading institutional investor in Georgia. Since the start of its operations in the country, the Bank has invested over €2.6 billion in 190 projects in the financial, corporate, infrastructure and energy sectors, with 91 per cent of these investments in the private sector.
Background information on E5P
The E5P is a multi-donor fund operating in the Eastern Partnership countries of Armenia, Georgia, Moldova and Ukraine. The European Union is the largest overall contributor to E5P with committed funds of €70 million. For E5P in Georgia the EU has pledged €10 million which is boosted by additional commitments from the Czech Republic, Denmark, Estonia, Georgia, Germany, Lithuania, Norway, Poland, Sweden and USA. The pledged funds are to help Georgia improve energy efficiency, contributing to energy security and economic competitiveness and policy dialogue, while having a positive impact on the environment.
The main objective of the E5P initiative is to use grants to leverage loans dedicated to municipal energy efficiency and environmental projects, for example the rehabilitation of water and wastewater systems, solid waste management, street lighting, local transport and the insulation of public buildings.
