Presidents of EBRD and ADB Confirm Readiness To Help Georgia Return to High Rate of Economic Development in Video Conference With Giorgi Gakharia
Prime Minister of Georgia Giorgi Gakharia held a video conference with the presidents of the European Bank for Reconstruction and Development (EBRD) and the Asian Development Bank (ADB) regarding the possible assistance and financial resources to be allocated to Georgia due to the challenges associated with the global pandemic.
Economic problems caused by the global spread of COVID-19 were emphasized during the video conference. Funding allocated by EBRD and ADB to the Georgian private sector, Georgian banks, and other business entities was noted in particular.
The sides also discussed post-crisis measures and the assistance that Georgia might receive from the financial institutions, which would enable the government to continue the state funding programs that are being implemented today to support citizens and private businesses.
It was noted that the government team is actively working with the local representatives, as well as the head offices of both EBRD and ADB to jointly develop a package of measures that will focus on overcoming the ongoing challenges.
According to the assessment of the presidents of the financial institutions, the fact that Georgia is successfully coping with the crisis constitutes sufficient grounds to say that the country will very quickly regain the rate and positions of economic development that it possessed at the beginning of 2020. Suma Chakrabarti and Masatsugu Asakawa confirmed their readiness to actively support Georgia in this area.
The Georgian side stressed that EBRD and ADB are very strong and serious partners for Georgia. It was noted that the European Bank for Reconstruction and Development and the Asian Development Bank have financed extremely important projects worth hundreds of millions of dollars in Georgia, including in the area of infrastructure. It was noted that all major systemic infrastructural projects funded by them are still in the active phase of implementation today, despite the ongoing crisis.
The head of government thanked EBRD and ADB for their active cooperation and their support of Georgia.
Deputy Prime Minister and Minister of Regional Development and Infrastructure Maia Tskitishvili and Minister of Finance Ivane Machavariani participated in the video conference.
DETAILS RELEASED OF GEORGIAN GOVERNMENT’S CAMPAIGN TO STRANGLE ANAKLIA PORT PROJECT
Ruling Georgian Dream Party Reversed its Support for Vital Project,
Wiping Out Economic Benefits for Georgia
TBILISI, GEORGIA, 9 September, 2020 – The Anaklia Development Consortium (ADC), the company originally selected by the Government of Georgia to develop the strategic Anaklia Port Project, today shared additional details of the Government’s campaign, directed by the ruling Georgian Dream party, to undermine the project by dissuading potential project investors, lenders, contractors and suppliers from joining the project in order to kill it.
The following statement is issued on behalf of the ADC Supervisory Board:
“All infrastructure projects of such scale require government support; namely the encouragement of lenders and investors, the assistance in permitting, regulatory approvals and a favorable tax regime, and providing any ancillary support; in this instance, the provision of land and the construction of road and rail infrastructure. For a government to actually oppose an infrastructure project that it had itself approved is highly unusual in the global economy.
“The Georgian Government’s campaign to strangle ADC’s ability to develop the Anaklia Port Project represents a self-inflicted wound for itself and considerable injury to Georgia’s economy and its role in the region.
“Taken together, the Georgian Government's specific actions are part of a deliberate and well-orchestrated campaign to destroy a project which the Government itself originally sponsored and endorsed, but subsequently chose to destroy as a result of what appear to be the political and economic self-interests of the Georgian Dream Party and its principals.
“The Government manufactured all sorts of excuses for not wanting to see various investors, lenders and partners involved in the project, but the Government really only had one purpose: to choke the project to death by scaring away everybody who might have an interest in supporting it.
“Also, is it beyond coincidence that government ministers – including two Prime Ministers -- who voiced support for the project or otherwise expressed concern about the growing controversy with the project were tendering their resignations shortly after such comments were made?
“The damage to Georgia caused by the Government goes well beyond the potential loss of the Anaklia Port and the associated Special Economic Zone. The conduct of the Government is scaring away investors at a time when Georgia cannot afford to lose any more foreign investment. According to the National Statistics Office of Georgia, the amount of foreign direct investment in Georgia has fallen from nearly US$ 2 billion in 2017 to just over US$ 1.3 billion in 2019, and in the first quarter of 2020, stood at only US$ 171.8 million - a catastrophic decrease even before the Covid crisis began to take effect. As Retired U.S. Lt. Gen. Ben Hodges of the Center for European Policy Analysis said, ‘the government only has itself to blame.’”
Some examples of the Government’s efforts to strangle ADC and the Anaklia Port Project include:
- Georgian Dream party leader Bidzina Ivanishvili requested to meet with ADC to discuss the Anaklia Port Project and asserted that the expansion of Poti Port could achieve the same objectives of the Anaklia Port at a far lower cost.
- During a June 12 meeting of the Georgian Dream party, attended by more than 100 party officials, Party Leader Bidzina Ivanishvili personally blamed Prime Minister Giorgi Kvirikashvili for his actions in support of the Anaklia project and for having close ties to ADC investor Mamuka Khazaradze. Mr. Kvirikashvili resigned the day after that meeting.
- In February 2019 ADC learned that during an October 2018 meeting with senior U.S. State Department officials in Tbilisi, Mr. Giorgi Gakharia (then Minister of Interior) advised the U.S. officials that the Anaklia Port project was not in Georgia’s interests.
- SSA Marine, which was selected as the Anaklia Port operator and was a potential investor, alerted ADC of its concerns about what seemed to be the Government’s support of an expansion of the Poti Port. (Following detailed studies sponsored by the Government back in 2013-14, it had been determined that Poti Port could never meet Georgia’s needs for a Deepwater Port, which is why the government itself selected Anaklia for development at that time. The Government’s subsequent expressions of support for expansion at Poti was a clear signal to the lending and investment community that the Government was no longer supportive of Anaklia.)
- A sovereign European development bank advised ADC that it had decided against supporting the project because of the negative actions of the Georgian Government, and the possible shift of support to the Poti Port.
- Another sovereign European development bank advised ADC that it was withdrawing its support because one of its counterparts had just done so (above) due to the state’s apparent shift of support from Anaklia to Poti.
- It has been reported that Infrastructure Minister Maya Tskitishvili, in ministerial hearings before Parliament, undermined SSA Marine as a potential investor and as the port operator, claiming the company lacked experience and financial capacity. These assertions were not true. In the process of her speech, the minister also breached legal obligations of confidentiality that were associated with the investment agreement.
- SSA Marine advised ADC that it was suspending its activities related to the Anaklia Port project.
- Mr. Giorgi Kobulia, Minister of Economy and Sustainable Development, told “Forbes Week” that the negative public discussions and media reports of the Anaklia project were having a negative impact on the business climate within Georgia. He subsequently resigned within days of the interview.
- A major U.S. private equity firm which was in advanced negotiations with ADC to join the project revealed to ADC that Government officials warned the firm to stay away from the project.
- Prime Minister Mamuka Bakhtadze, in a trade visit to the U.S., met separately with SSA Marine, the leadership of the U.S. private equity firm that were interested in investing in the project, and with U.S. Secretary of State Mike Pompeo in Washington, D.C. Secretary Pompeo expressed support for the Anaklia project with the prime minister standing next to him, saying it would “strengthen Georgia’s ties with free economies and not allow Georgia to be under the economic influence of Russia or China.” Upon his return to Georgia, Mr. Bakhtadze resigned, and this again put the project in unchartered waters.
- At a meeting in Tbilisi, a large Hong Kong-based private equity group with significant Central Asian transportation synergies that was considering joining the project was told bluntly by Infrastructure Minister Tskitishvili that the Government did not desire their participation in the project. At this same meeting Ms. Tskitishvili reaffirmed the Government’s seeming opposition to SSA Marine’s involvement in the project.
- Giorgi Volski, Vice Speaker of Parliament, falsely claimed that the Hong Kong private equity group mentioned above is a “Russian” company, with the intention either of disparaging it or sowing further confusion about the government's position in respect of the project.
- In a meeting between Prime Minister Gakharia and an Anaklia Supervisory Board member, Mr. Gakharia stated that “things had to get quiet” before he could reassure the major potential U.S. investor of the state’s support for the Anaklia Project, which the board member understood to be a condition that ADC and Mr. Khazaradze stop criticizing the government publicly on its opposition to the Anaklia Project, and the government would stop criticizing ADC.
- Also, the Supervisory Board was promised a letter of support to a U.S. investor from the highest levels of the Government, but this never materialized, even though ADC did comply with the Government’s request.
- A delegation from the U.S. (in Tbilisi to participate in the 5th annual Tbilisi International Conference sponsored by the McCain Institute) met with new Prime Minister Giorgi Gakharia, and subsequently with Mamuka Khazaradze. Representatives of the delegation told Mr. Khazaradze that Prime Minister Gakharia told them the Anaklia project was not commercially viable when this was patently not the case.
- Fadi Asly, chairman of the International Chamber of Commerce in Georgia, is quoted in the media saying, “No one will invest in Anaklia project as long as Bidzina Ivanishvili wants to destroy it.”
Taken together, these are only a selection of the instances where the Government of Georgia actively undermined the project in an effort to prevent ADC from developing the project. ADC intends to present evidence during the upcoming arbitration proceedings to demonstrate the degree to which the Government took such steps.
Further details of the Anaklia Port project and ADC can be found at http://anakliadevelopment.com
EBRD to finance modern municipal infrastructure in Bakuriani, Georgia
The population of Bakuriani, a city in the Borjomi municipality of Georgia, will benefit from improved public transport and services thanks to a €5 million loan provided by the European Bank for Reconstruction and Development (EBRD).
The financing will help to acquire special vehicles for street cleaning, snow removal and waste collection, as well as to purchase multi-purpose trucks, and 10 modern buses for passenger transport.
The new low-floor buses will considerably reduce emissions in this popular mountain and ski resort and offer more comfortable journeys. The EBRD is also providing technical cooperation funding aimed at training and promoting women for bus-driver roles.
Bakuriani is a small town in the central part of the country. It is one of the most-visited mountain and ski resorts in Georgia and famous for its climate and natural environment.
The technical cooperation will make recommendations for safe, accessible and inclusive transport that integrates the needs of passengers into urban transport services. Additional technical assistance funded by the donors of the Early Transition Countries Fund (Canada, Finland, Germany, Ireland, Japan, South Korea, Luxembourg, the Netherlands, Norway, Spain, Sweden, Switzerland, Taipei China and the United Kingdom) will help the company improve its corporate development.
“This project will help to improve the quality of municipal services and safety measures in an important resort town. Improving Georgia’s municipal infrastructure, especially in the regions, is of paramount importance for the EBRD. The project will also help promote gender equality across the workforce,” said Catarina Bjorlin Hansen, EBRD Regional Director for the Caucasus.
The EBRD is a leading institutional investor in Georgia. Since the start of its operations in the country, the Bank has invested over €3.8 billion in 252 projects there, in the financial, corporate, infrastructure and energy sectors, with 89 per cent of these investments in the private sector.
EU supports information campaign in Georgia for EU Sustainable Energy Week 2020
On 22 June, the EU Delegation to Georgia launched the EU Sustainable Energy Week (EUSEW) campaign. The campaign consists of tips for citizens on saving energy and money, caring about the environment and making their homes more energy efficient.
This year, the EUSEW will run from 22 to 26 June. The event will be held virtually, and the topic will be Beyond the crisis: Clean energy for green recovery and growth.
The EUSEW is the biggest event dedicated to renewables and efficient energy use in Europe. It is organised by the European Commission and brings together public authorities, private companies, non-government organisations and consumers to promote initiatives to save energy and move towards renewables for clean, secure and efficient power.
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Giorgi Gakharia: Every citizen of the country should call a doctor and get PCR tested on COVID-19 as soon as feverish or suspecting other respiratory symptoms
Giorgi Gakharia, Prime Minister of Georgia instructed respective institutions to extend the coverage of COVID-19 tests in parallel with re-opening of the economy and on the background of increased epidemic risks. Head of the Government of Georgia held a working meeting today on the topic.
On the background of COVID-19 circulation and restrictions being lifted in the country, greater importance is acquired by the timely detection and treatment of possible cases. Every citizen should immediately call 112 or a family doctor and get PCR tested on COVID-19 if and when gets fever, cough, and difficulty in breathing or other respiratory symptoms.
As of June 11, 2020 the country has identified 6 new cases, out of which 4 are not traceable and thus contain an outright threat. Hence, Government of Georgia and healthcare professionals once again urge the population to strictly adhere to the pre-defined measures.
Gradual lifting of restrictions and resumption of the economy should not serve as a basis of lessening the effort or lead to an illusion that a virus has been defeated. Examples of various countries have been discussed at the working meeting, which have had repeated epidemic outbreaks. Significance of joint efforts and high degree of responsibility has been underlined in the process of tackling the global pandemic.
Prime Minister of Georgia and management officials of the National Centre for Disease Control and Public Health (NCDC) discussed the current stance at Fever Centers and inbound calls to 112, along with the resources required for the greater extension of testing practices. It was noted that as of today 18 labs in Georgia perform the polymerase chain reaction (PCR) tests and this number will increase to 24 in July 2020. Average daily number of tests performed in the country is around 1500, which is expected to increase to 4500 in the nearest future. By autumn daily indicator of tests will reach 6000-8000. Along with possible cases, tests at present will be performed among some number of groups, which will be defined in the nearest future under the Government Resolution. In line with the instructions issued by the Head of Government of Georgia, stock of test kits will be periodically increased. NCDC is also replenishing its material-technical base.
Press Service of the Government Administration
EU4Energy: Georgia adopts two key energy efficiency laws
On 21 May, the Parliament of Georgia adopted key energy efficiency legal acts: the Law on Energy Efficiency and the Law on Energy Performance of Buildings, which transpose the EU Directives in this field. Georgia has continued to implement electricity by-laws according to schedule, even during the COVID-19 pandemic.
By adopting the two laws, the Government of Georgia is given the opportunity to receive significant investments in public building renovation programmes, amounting to €80 million from the European Bank for Reconstruction and Development (EBRD) and German Bank KfW, €26 million in investment grants and €8.5 million in technical assistance from the EU. Georgia will get an additional €150 million in a policy-based loan tranche from KfW and the French Agency for Development (AFD) for the implementation of reforms.
"The new framework will not only make Georgia's building industry more competitive, but also its households better supplied with energy services, and its building stock better insulated. It will boost the usage of greener energy sources for heating, cooling and lighting," said Violeta Kogalniceanu, Head of the Energy Efficiency Unit at the Secretariat.
The laws were developed under the coordination of the Ministry of Economy and Sustainable Development of Georgia in close cooperation with the Secretariat, and with technical assistance provided by the EU supported project EU4Energy for the Buildings Law and by the EBRD for the Energy Efficiency Law.