How are billions of aid appropriated in Georgia


On 22 October 2008, in Brussels was held donors’ international conference that as an aid assigned $4.5 billion to Georgia.

The structure of costs is very interesting and the funds that according to Georgian government’s plan should be spent for the development of specific fields. I suppose our readers are quite interested in these questions. Therefore, the article covers the overview of funds distribution scheme that was published by Ministry of Finances of Georgia.
EBRD – European Bank for Reconstruction and Development, will assign €702 million. €65 million is assigned for the rehabilitation of Georgian railway system. €21 million is allocated for the reconstruction of Tbilisi airport runway and airport’s navigation system. Every detail of the mentioned project is defined and consultations are in the process. €50 million is assigned for the construction of 500-kilowatt transmission line (co-financing KFW, EBRD and EIB) that should be completed in 2011. EBRD assigned €90 million as a direct loan for private sector, the funds will be spent for the rehabilitation of Oni coordinated hydroelectric system and Faravani hydroelectric power plant. €18 million is assigned for municipal water supply projects (in Adjara, Bakuraiani, Poti, Kutaisi, Borjomi and Tskhaltubo regions). EBRD assigned €351 million for Georgian banking sector (credits, capital). €157 million of the total sum will be spent in 2008, €84 million – 2009, €110 million – 2010. This is a direct loan for private sector. EBRD cooperates with the banking sector directly. €108 million is allotted for the financing of enterprises (€44 million – in 2008, €24 million – 2009, €40 million – 2010). Moreover, EBRD assigned direct loan to private sector and it cooperates with real sector directly.
World Bank has assigned the overall sum in amount of $530 million. $40 million is already transferred to the budget for the support of projects struggling against poverty. This sum was remitted in October 2008 and the project was already accomplished in December of the same year. World Bank assigned $70 million for the encouragement of credit development policy in Georgia. Supposedly, the first part ($40 million) of the allotted funds will be remitted in the first quarter of 2009, while the rest $30 million will be remitted in February 2010. Roads department of Georgia will receive $380 million for the development of various road construction projects such as secondary and local roads infrastructure development project ($70 million), East –West Highway rehabilitation Project-Svaneti-Rikoti tunnel reconstruction- ($250 million). The project execution is planned in 2011. Vaziani-Gombori-Telavi Highway ($60 million) – accomplishment is planned in 2010. $40 million will be remitted for encouragement of municipal and regional infrastructure development. Project is already in the process and it should be accomplished at the end of 2012.
EIB (European Investment Bank) – remits €56 million for the construction of 500-kilowatt transmission line (co-financing KFW, EBRD and EIB). €90 million was assigned for the rehabilitation of hydroelectric station. Government’s debt or EBRD direct loan for the private sector. €65 million – for the reconstruction of railway, project will be accomplished by Georgian railway and it must be completed at the end of current year. Besides this, it is planned to reconstruct Samtredia-Grigoleti road, but details of the project and its terms and the allotted sum need to be defined.
ADB (The Asian Development Bank) – assigns the sum in amount of $300 million. $70 million of which is a direct budgetary support that has been fully remitted in the budget in Novermber-December of 2008. $40 million is allotted for the municipal and regional infrastructure project that has been started in 2008 and the project completion is expected at the end of 2012. For the rehabilitation of Adjara bypass road is assigned $70 million. $80 million has been allocated for the debt development policy encouragement that is expressed in budgetary support in 2009-2010 years. $40 million is assigned for – urban development mechanism, Tbilisi urban infrastructure development. Project should be completed in 2011.
CEB – €1 million grant for the post-conflict rehabilitation, by means of donor international organizations.
Untied States of America will assign One billion US dollars by means of various donors and governmental institutions, including:
MCC (Millennium Challenge Corporation) – $60 million is assigned for the construction of Samtskhe-Kavakheti roads. The project is in the process and it should be finished in 2010. $26 million – municipal infrastructure development project for Georgian government. The project should be accomplished in 2011. $14 million is assigned for the preparation works of electricity/gas storage construction.
OPIC (Overseas Private Investment Corporation) – $176.3 million – loans for private companies with US co-participation or ownership, for mortgaging and for the construction of hotels, multifunctional buildings, business centers and apartments. For the development of foodstuff production field. This is a direct loan for private sector. Project implementation is already started and it should be completed at the end of 2010.
USAID – (United States Agency for International Development) – has assigned $250 million. This is direct budgetary aid and the remittance has already been made.
US governmental agencies will remit the sum in amount of $474 million. These funds will be allocated in the following way: humanitarian aid – $70.8 million, police support package; assurance of the feeding, refuge and means of subsistence for IDPs (Internally displaced persons) in Shida Kartli – $47 million. Second phase of Shida Kartli reconstruction covers the following aspects: employment and professional trainings in building specialties; reconstruction of schools and municipal infrastructure; support of IDPs settlement; security – $50 million, recommence the production of agricultural products in Shida Kartli, development of municipal infrastructure, regional trading, hydro energy, health insurance, professional training, mine clearing, support of civil society development, mass media development etc – $57.1 million. The decision about the allocation of rest of the sum ($245 million) will be made by the new administration. Aimed budgetary support made by the Georgian government from 2008 budget for the financing of the construction of the houses for IDPs – €10 million. Humanitarian aid that is provided by the non-governmental organizations – €9 million. The program of winter spending of compactly settled IDPs, micro financing for professional educational trainings, development of small infrastructure (€15 million). Georgia-Europe neighboring policy 2008 action plan support (€6 million). Target budgetary support of the construction of the houses for IDPs in 2008 and 2009 (€51.5 million). The sum provided in terms of European neighboring policy for the regulation of the conflicts (€4 million). Micro financial aid for budget – €11.5 million. Budgetary support of criminal law reform in amount of €16 million that will be remitted in three tranches in 2009-2011. Monitoring mission of European Union in Georgia received €35.5 financing. Support program of sector policy, settlement of IDPs, technical aid, grants, and EU monitoring mission. The total amount of macro financial aid for the above-mentioned projects is €200 million that will be remitted in successive steps up to 2012. Within the framework of the same program, €128.7 million is assigned for 2013.
Japan has provided $200 million. Japan International Cooperation Agency provided $190 million for the reconstruction of Samtredia-Kutaisi-Zestafoni highway. This project should be completed in 2010. Japan government provided $10 million non-project grant for the purchasing of agricultural tractors.
Germany – €133.7 million. Foreign Affairs department of Germany provides €12.2 million as a humanitarian aid that is destined for the IDPs settlement projects, for internally displaced children and their educational programs. Project is also intended for the reconstruction of Gori, support of EU monitoring mission, creation of database of civil registry agency etc. Various German donor organizations like BMZ and KFW assigned €100 million for the construction of high voltage transmission line that should be completed in 2011.
Below we list the amounts of aid that various countries provided for Georgia: Poland – €3.3 million, Sweden – €49 million (municipal infrastructure development support projects are of special importance). The Netherlands – €12.5 million, including direct budgetary aid and court field support project. FMO (the entrepreneurial development bank of the Netherland) – $30 million for banking sector supporting. France – €7.53 million aid that is intended for Tbilisi airport equipment, humanitarian aid, environment protection, health care etc. Ukraine – $14.5 million that is assigned for budgetary support and special health care program in Crimea and west of Ukraine for the children who suffered damage. In addition, trade cooperation improvement support. Malta – €0.01 million assigned as a budgetary aid. Czech Republic – $8.4 million. Dania – $12.5 million for the development of rural private sector, support of junior footballers’ schools. Estonia – $1.45 million as a technical and humanitarian aid. Finland – humanitarian aid in amount of €3 million. Belgium – $1.32 million. Bulgaria – $0.66 million. Hungary – $0.31 million. Ireland – $2.64 million. Italy – $3.69 million that is assigned for the settlement of IDPs, social aid, agricultural development support, irrigation system development mainly in Shida Kratli region. Latvia – $0.76 million. Lithuania – $1.32 million. Luxemburg – $0.37 million. Rumania – $2.2 million. Slovenia – $0.03 million. Spain – $1.32 million. Canada – $4.97 million. Norway – $39.55 million that is provided for good management development support and hydro projects. Austria – $1.78 million. Switzerland – $18.88 million for physiological rehabilitation of IDPs, providing shelter for them, provision of foodstuff, agriculture development projects etc. United Kingdom – $3.39 million – technical support of National Bank of Georgia and financial supervision agency. Some humanitarian aid either.