Georgia

In 2017, Georgia joined the Energy Community. This requires the country to transpose European energy directives.

AFD is bolstering the country’s efforts to structure the energy efficiency sector and implement the European Union’s Third Energy Package (which is designed to continue opening up the domestic electricity market to competition). Since 2018, it has worked alongside the KfW to support reforms of the electricity market and promote public policies on energy efficiency via a four-year program of public policy loans.

The Georgian government has also received AFD support via a FEXTE grant of €250,000 to implement technical assistance from French entities including EDF.It aims to help public electricity stakeholders model the country’s energy mix over the medium to long term.

This reform program should help Georgia initiate an energy efficiency policy, thus strengthening its economy and setting itself on a trajectory compatible with the energy transition in keeping with the Paris Agreement.

Access to credit is currently an obstacle to development for agriculture in Georgia. Despite the government’s introduction of a subsidy for agricultural loans in 2013, the volume of loans awarded in the sector remains very low, particularly for small- and mid-size family farms and cooperatives. 

To help small farms access financing, AFD is funding a technical assistance program via a delegation of funds from the EU’s Neighbourhood Investment Platform (NIP)—East worth €4 million. This program includes an initial phase of identifying promising small, semi-commercial farms and cooperatives, setting up a pilot mechanism to provide operating advice, considering the implementation of innovative financial tools and providing ad hoc expertise to financial institutions.

Proparco, AFD’s private sector subsidiary, will also provide two microfinance institutions with two lines of credit for €10 million and €7 million.

Social protection is a crucial topic in Georgia. The transition to a market economy and changes in the working world have given rise to new challenges for the country, which has begun overhauling its healthcare system and adopting a new retirement system.

In order to offer the Georgian population greater security in the face of social risks, AFD is supporting these changes. In 2017, it awarded an initial grant of €60 million to Georgia as cofinancing of the World Bank program designed to support competition in the private sector. This funding comes with a technical assistance program coordinated by Expertise France, which aims to support the implementation of retirement reforms.

Since 2018, we have been supporting Georgia’s reforms of its social protection systems with a 3-year public policy loan, and we are focusing our support on three sectors of social action: social protection, mental health, and assistance to internally displaced persons from Abkhazia and South Ossetia. This support includes a technical assistance program run by Expertise France.
 

Since 2019, AFD has also been involved in the water and sanitation sector. To this end, it is funding a project to modernize water and sanitation services in the secondary city of Khashuri via a €58-million loan. This funding comes with a technical assistance and investment grant of €7.15 million delegated by the EU’s Neighbourhood Investment Platform (NIP) – East to AFD.