The French Development Agency allocates €190 million to Georgia to support the Covid-19 pandemic crisis response

On April 9, 2020, major international donors, including the French Development Agency (AFD), expressed their strong support for Georgia as it faces the health and economic effects of the Covid-19 pandemic. 

On May 22, 2020, this commitment came to fruition when the French Development Agency and the Georgian Ministry of Finance signed two loan agreements for a total of 190 million euros. The first loan agreement, amounting to 70 million euros, aims to continue supporting the Georgian health and social protection system with a particular effort on the measures taken in Georgia to fight against Covid-19. The second loan agreement, amounting to 120 million euros, aims to deepen the reforms of the electricity sector with specific attention paid to the care of vulnerable consumers. Compared to the commitments initially envisaged, the amount of these loan agreements has been increased by 110 million euros to take into account the effort linked to the fight against Covid-19. These two agreements were signed between Mr. Ivane Matchavariani, Minister of Finance of Georgia, Mr. Diego Colas, Ambassador of France to Georgia, and Ms. Gaëlle Assayag, Director for the South Caucasus of the French Development Agency.

The objective of the three-year program (2018-2020) in the area of social protection is to provide financial and technical support to the reforms under way in Georgia aimed to:

• Strengthen the social protection and solidarity system for vulnerable populations;
• Improve the efficiency, quality and accessibility of the health system and support the health response plan to the Covid-19 pandemic;
• Adapt the support system for internally displaced persons so that it better meets the needs of the most vulnerable.

The second program, co-financed by the AFD and the German KfW, and supported by a grant from the European Union, aims to support the reforms of the electricity sector by accompanying Georgia in its efforts to:

• Structure a regulatory framework favoring the improvement of energy efficiency;
• Establish an electricity market along the lines of the one in force in the European Union, conducive to the integration of new renewable energy capacities;
• Support vulnerable consumers, both through the establishment of a specific social assistance scheme during the Covid-19 crisis, and in the longer term as part of the reform of the electricity market.

On the occasion of the signing of these agreements, Mr. Diégo Colas, Ambassador of France to Georgia, declared that: “France, as well as its main European partners with whom we constitute 'Team Europe' and in particular our German partners, stands alongside Georgia to fight the virus and its consequences not only in the short term, in the area of health in Georgia, but also in the medium and long term, especially when it comes to economic recovery. The messages of mutual support and friendship exchanged between Presidents Mr. Macron to Ms. Zourabichvili are materialized today through unprecedented financial support from France, which testifies to the importance of the partnership between our two countries. This shows the strength of the strategic partnership between France and Georgia and which bears the name of Prince Amilakhvari".

Ms. Gaëlle Assayag, Director of the regional agency for the South Caucasus of the French Development Agency (AFD), stated that: “The French Development Agency is fully mobilized in Georgia to support the country in the fight against the health, economic and social crisis caused by the Covid-19 pandemic. In addition to the funding made available to enable the government to rapidly deploy its plan to respond to the crisis, these programs will make it possible to pursue major reforms to strengthen the efficiency of the social protection, health and energy sector in the long term, for the benefit of the whole Georgian population, and in particular vulnerable people”.