Bank pledges urgent financing to support economy affected by coronavirus
The EBRD and Georgia are stepping up cooperation as the country's economy faces the challenge of the coronavirus outbreak.
The Government of Georgia recently announced an economic stimulus package to support the economy consisting of two parts – benefits provided by the banks in terms of restructuring loan repayments and assistance allocated from the budget.
The EBRD has made available an emergency Solidarity Package of €1 billion for its existing clients across 38 economies, including clients in Georgia.
Joining forces was the focus of a telephone call between Minister of Finance, Ivane Matchavariani and EBRD Managing Director for Eastern Europe and the Caucasus, Matteo Patrone and the Regional Director for Caucasus Catarina Bjorlin Hansen. EBRD officials pledged urgent financing to help local firms deal with the impact of the coronavirus outbreak.
Minister Machavariani said: “EBRD is reliable partner of our country. We very much appreciate the quick response the Bank has made to support Georgia. The financial assistance provided by the EBRD, will help the country to ensure its economic stability, during the global challenges caused by the COVID-19. Once again, I would like to thank the Bank's management for their permanent support. I hope with the help and efforts of our international partners, the Georgian economy will be able to face this global challenge with as little loss as possible“.
Mr Patrone praised the close cooperation between the EBRD and the Ministry and all the steps the Government is taking to deal with the crisis. Mr. Patrone also reconfirmed the Bank’s strong commitment to supporting the country’s economy, especially in the times of crisis.
He said: “Under the emergency programme, the EBRD has set up a ‘resilience framework’ to provide financing for current EBRD clients with strong business fundamentals who are experiencing temporary credit difficulties. More generally, we are prepared to step up our efforts, together with the Georgian authorities, to support the economy."
During crises, the EBRD ramps up support. In the wake of earlier crisis in 2008, the Bank ensured a lifeline for Georgia’s financial sector. Against the background of the conflict and global economic recession, it arranged for a large liquidity injection into the banking sector.
As Georgia faces new economic challenges, the EBRD’s support includes measures such as emergency liquidity, working capital and trade finance. The Bank is working with its long-standing partners - commercial banks - to support access to finance for the private sector, especially for the small and medium sized enterprises.
In addition, the parties discussed speeding up the development of several projects to secure job creation. For example, the Bank is currently working on designing a new framework to support all municipalities across the country with improved access to infrastructure. The EBRD is also working to support the upgrade of the electricity grid to further support the renewable energy generation sector.
The EBRD also plays an important role in leading private and public sector dialogue through the Investors Council platform, assessing the real and immediate needs of the private sector.
The Bank also provides business advice to local SMEs and has helped more than 1400 firms to improve performance and growth; and is seeking ways to strengthen these activities to support SMEs to overcome the crisis.
The EBRD is a leading institutional investor in Georgia. Since the start of its operations in the country, the Bank has invested over €3.7 billion in 249 projects in the financial, corporate, infrastructure and energy sectors, with 87% per cent of these investments in the private sector.