Georgian Railways issues Eurobonds

Georgian Railways has issued 5 year Eurobonds on the international financial markets worth USD 250 million. Press Secretary of the Prime Minister Niko Mchedlishvili states that these Eurobonds were issued with the support of Bank of America, Merrill Lynch and JP Morgan.

The sums accumulated from this issue will be used to finance different projects, the major one being the construction of a new track to bypass Tbilisi and some modernising projects. As is known EBRD has given a Euro 100 million loan to finance the Tbilisi bypass route. 100% of Georgian Railways belongs to the state.

Former PM Lado Gurgenidze thinks that selling railway Eurobonds is a positive step, but some economic analysts are challenging it, suggesting that in only 5-7 years the railway cannot pay back the loans it has taken out to issue the bonds, so privatisation and the selling of the railways could be on the agenda.