Georgia

With one foot in Asia, the other in Europe, Georgia is a key country in the South Caucasus. A series of reforms has modernized the country, but it suffers from socioeconomic fragility and an unstable geostrategic environment. Since 2012, AFD Group has been supporting Georgia's commitment to combat climate change, by promoting a fair and inclusive transition. The Group also supports its convergence path with the European Union, primarily in the sectors of regional connectivity, energy, agriculture, water resources management and human development.
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Tbilissi-city
Georgia and afd: increasing the country’s economic potential and boosting growth
Tbilisi, Georgia

Building inclusive economic and political models

Evex-Géorgia

Building inclusive economic and political models

AFD Group supports Georgia in building a sustainable and inclusive model of society based on values it shares with the European Union. While Georgia has achieved impressive results in lifting people out of poverty, as well as improving their overall well-being, people remain vulnerable and tempted to emigrate.

AFD and Expertise France have supported Georgia's social protection policies since 2016. We have provided assistance to the government for the creation of the Georgian Pension Agency and the upgrade of mental health policy. In 2020, Proparco supported the upgrade of the Evex private hospital services.

Since 2022, AFD and the World Bank have supported Georgia’s human capital development programme, to support citizens to access quality education and health, skills development and employment.

AFD is also working to ensure Georgia’s macroeconomic stability. It supported the State budget during the recent Covid-19 crisis and promotes reforms of public enterprises and prioritization of public investments. Proparco encourages the development of Georgian SMEs, through the support of financial institutions (leading banks, microfinance institutions, and leasing organizations).

Encouraging sustainable management

agriculture-Georgia

Encouraging sustainable management

Addressing inequalities across the country means reviving rural areas through agricultural and agro-industrial development, promoting integrated management of water resources, and fostering the connectivity of the country.

Since 2019, AFD has been implementing the EU-funded FinExCoop project to develop new models for farmers’ inclusion in markets and access to technologies, and for the promotion of cooperative models. Building on this experience, AFD is now working with Ministries of Environmental Protection and Agriculture and of Georgian Amelioration to modernize irrigation schemes in the Zemo-Samgori perimeter. They are also collaborating on the establishment of an agribusiness cluster with greater productivity, and with the Asian Development Bank to support institutional reform of water and irrigation management.

Georgia is facing challenges connecting with the rest of the world due to infrastructural, institutional and logistical bottlenecks. AFD is working on regional connectivity via the support of the Georgian Railway to optimize green Trans-Caucasian corridors.

Consolidating urban infrastructure

Supporting urban adaptations in Georgia, AFD

Consolidating urban infrastructure

AFD supports the development of public services in Georgian major cities and middle-sized towns, by funding urban infrastructure such as water and sanitation systems, as well as urban mobility.

Since 2019, AFD finances the rehabilitation and the expansion of the water supply and sanitation infrastructure of the city of Khashuri. Technical assistance is provided to the public operator, United Water Supply Company of Georgia, for improving the quality of services in the city. In parallel, AFD supports the ongoing reforms of the water and sanitation sector, in association with the Asian Development Bank.

As air pollution is high in Georgia and as its capital Tbilisi has major mobility-related challenges, AFD cooperates with the land transport agency of the Tbilisi Municipality to support the development of a sustainable urban mobility plan and the improvement of the bus network.

Reforming the energy sector

Inguri hydroelectric dam, energy, Georgia

Reforming the energy sector

With a vast hydropower potential and favorable location to sell electricity, Georgia could become a regional energy hub. Georgia joined the European Energy Community in 2017, committing to adapt its laws to the European energy directives. Together with KfW and the European Union, AFD co-finances an ambitious 6-year policy reform program to support the country in its efforts to structure the electricity market, as well as to develop an adequate regulatory framework for the development of renewable energies and energy efficiency.

AFD has mobilized technical assistance to support this program – notably on impact mitigation of the electricity market reform on vulnerable populations in Georgia. The Georgian State Electrosystem company (GSE) also benefits from a cooperation program implemented by French electricity market experts (EDF and RTE), to improve the electricity system planning and optimization, and to deploy the balancing market, which are both key for renewable energies integration.

€715 M
committed since 2019
11
projects financed since 2019
44,000
beneficiaries with improved access to drinking water in Khashuri municipality

Georgia is a country with a population of 4 million, which is at the crossroads between Europe and Asia. For some fifteen years now, this former Soviet bloc country has been engaged in major economic and political reforms, which have helped to modernize the country. 

However, its geo-strategic environment is sometimes a source of instability, particularly given the conflict between Armenia and Azerbaijan, and the 2008 Russian invasion, followed by an embargo. Georgia also suffers from a number of socioeconomic weaknesses, which have been exacerbated by the international financial crisis.

The country consequently needs to find the resources to achieve economic stability. Georgia can bank on the boom in tourism and an agricultural sector with strong potential, while taking advantage of its strategic position between the hydrocarbon producing areas of Central Asia and Europe.

AFD has been providing support to Georgia since 2012 for “green and inclusive growth,” and opened its office in capital city Tbilissi in 2017. These projects have focused on urban and rural development, infrastructure, governance and renewable energy. AFD supports the country via sovereign and non-sovereign loans and European grants under the Neighbourhood Investment Platform (NIP) – East.

AFD's work in Georgia is directly attached to the Eurasia regional office in Istanbul.

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News & Events

Georgia Energy and Green Sector Reform Agenda Continues with Support of KfW, AFD and EU

Press Release

Georgia Energy and Green Sector Reform Agenda Continues
AFD and Ministry of Finance of Georgia sign the Policy-Based Loan co-financing Water Supply and Sanitation Reform of Georgia

Press Release

Policy-Based Loan in Favor of the Water Supply and Sanitation Reform

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