Georgia receives financing for energy, SMEs

Prime Minister Nika Gilauri has announced a Euro 57 million agreement with German Development Minister Dirk Niebel – one part issued as a grant and the other as cheap debt.

As the Prime Minister stated on Thursday, commercial banks will use this money to build hydro-electric plants and rehabilitate current energy infrastructure. Included in the agreement are nature preservation projects. Gilauri called the investment, “the first serous step in this direction” for the country.

The German Minister said he is looking forward to a “highly developed economy and tourism [sector]” in Georgia. He said the existence of independent energy resources is of particular importance to this goal.

“In our co--op-er-a-tion with Georgia, I consider three areas par-tic-u-lar-ly important: I want to support the country in consolidating democracy – and I expect equal op-por-tu-ni-ties for the par-ticipants in the forthcoming parlia¬mentary and pre-si-dential elections. Secondly, the rule of law is to be strengthened. This relates to the independence of the judiciary, but also to an efficient and trans-pa¬rent legal frame¬work for the private sector, invest¬ment, and employ¬ment. Thirdly, Georgia's unique natural en¬vir¬on¬ment is to be protected through compliance with in¬ter¬na¬ti¬o¬nal biodiversity principles,” Minister Niebel said.

At the annual meeting of the European Fund for Southeast Europe (EFSE), co-hosted by the National Bank of Georgia, Gilauri focused on the challenges of small- and medium-sized enterprises (SMEs) in Georgia.

He thinks that in 4-5 years Georgia may enter the Russian market. Stressing how well Georgia has overcome the financial crisis of 2009-2011, the Prime Minster stated that Georgia has proved it is a democratic, pro-Western country since 2004. “We introduced different leaders to learn reform-making,” he added.

Emphasizing the interest of Germany in Georgian economic reforms, Gilauri welcomed the fact that the EFSE – one of the largest micro-finance funds in Europe – is increasing its contribution to the Georgian financial sector. Commercial banks will be able to use this money to provide micro-loans of 100, 200 and 500 GEL, thus making it easier for the public to develop their businesses, especially in rural regions.

Chair of the National Bank of Georgia, Giorgi Kadagidze, heralded the new loan agreements, which boost the availability of financing to SMEs. He said small- and medium-sized entrepreneurs will have greater access to financial resources and thus contribute more to the economic development of the country.

The international visitors, overall, found Georgia to be a very attractive place for business, but one that needs to advertise its openness worldwide.

The EFSE "fosters economic development and prosperity in the Southeast Europe region through the sustainable provision of additional development finance by offering long-term funding instruments to qualified partner lending institutions to better serve the financing needs of micro and small enterprises and low-income private households".