2017-09-06

Georgian Prime Minister Giorgi Kvirikashvili:

Greetings,
I would like to welcome Sir Suma Chakrabarti, the President of the European Bank for Reconstruction and Development and a good friend of Georgia, and thank him for his visit. It is his third visit to our country, which demonstrates his exceptional support.

Allow me to emphasize that we had a very productive meeting, during which we discussed our ongoing cooperation and prospects for the future.

As you know, EBRD is one of Georgia's most important partners. The cooperation between Georgia and EBRD spans 25 years. Over this period, the bank has implemented over 200 projects and invested about 3 billion euro in our country. Georgia is EBRD's largest beneficiary (assistance per capita).

The bank has financed vitally important projects for Georgia in such areas as energy and municipal infrastructure. Invaluable are EBRD's investments in the private sector.
Our successful cooperation is reflected, among others, in EBRD's active and consistent support of Georgia and its priority goals. Very important is EBRD's support in the implementation of our Government's four-point reform agenda. The bank's new policy focuses precisely on supporting this four-point agenda.

Allow me to point out that EBRD is very active in ushering in innovative products in Georgia's economy. Among the recent innovative projects, we must single out the issuance of GEL-denominated bonds in the local market by EBRD. Thus initiative has encouraged other financial organizations to follow suit.

In addition, a few months ago, the European Bank for Reconstruction and Development issued GEL bonds in the international market, which has also encouraged different organizations as well. These products are very important for sustaining economic growth and spurring Georgia's stock market.

I would like to emphasize the role of EBRD in the cause of Georgia's drawing closer to the EU. One of the priorities of the bank's new policy involves supporting Georgia in this process.

Equally important is EBRD's assistance in the implementation of DCFTA, under which Georgian banks have been given an opportunity to finance businesses in national currency. This project fosters the development of SMEs in our country. This support targets new export-oriented enterprises. The program plans to allocate a 110 million euro credit line.

Besides financing investment projects, EBRD provides vital assistance in implementing economic reforms.

As you know, governance reform is one of the strategic directions under the Government's four-point agenda, which seeks to introduce the principles of inclusive governance implying the Government's communication with the private sector and the public at large in the process of important decision-making. In this vein, extremely important was EBRD's support in the process of establishing the Investors Council in whose format the Government, together with the business sector, discusses systemic issues vital for the country's development.

Other important projects include the procurement, with EBRD assistance, of modern buses, accommodating the needs of people with disabilities, for Tbilisi's transport system. The procurement of 10 e-buses for Batumi is also planned. The e-bus project will be the first project of this type financed by EBRD and the first initiative of this kind in the region.

The development of the banking sector and boosting the development of the local capital market, which also makes up an important part of our reforms, is one of the priority directions under the bank's new policy.
With EBRD assistance, the PPP (public-private partnership) framework document has been developed, and numerous important economic reforms will be carried through our joint efforts.

It is also important that EBRD, as part of the work of the Investors Council, came up with an initiative to team up with other donors and support Georgia's judicial reform component in order to establish a network of commercial chambers and professionally train judges for this system of commercial chambers. I am convinced that our achievements so far will pave the way for even more effective cooperation in the future.

Once again, I express my sincere gratitude to Mr. Chakrabarti, the EBRD team, and the EBRD Regional Office in Georgia for their tireless work. Of course, we have even more ambitious and exciting plans to implement in cooperation with EBRD for the benefit of Georgia's development.
Thank you so much!

Suma Chakrabarti - the President of the European Bank for Reconstruction and Development

Thank you, Mr. Prime Minister for your words.

I think I can be relatively brief. This is my third visit to Georgia: in 2013, in 2015 when we had an annual meeting in Tbilisi, and now in 2017.

We had very productive meetings with the Prime Minister, the Finance Minister, Energy Minister, Justice Minister, and Economy Minister. We shale engage private sector entities as well.

I think I can honestly say that the relationship between EBRD and Georgia is really a benchmark to us. It is a strategic partnership. It has flourished for many years. We now stand, as the Prime Minister said, 3 billion euro of investment over the years. I think the other really important thing to note is so much innovation in our relationship. We often use the projects and investments with the Georgian authorities and the private sector here that we are trying to take to other countries, too.
I strongly believe that where we are now with Georgia makes this country very much the leader in the next way of transition countries after those European ones that we worked on in the 90s and 2000s. Georgia now is the leader among the next wave.

Why is that?
Firstly, very good economic management. If you look at the way Georgia's economy has emerged in the last few years, particularly attributed to the Finance Minister and the Central Bank, and the Government as a whole, it is fantastic! I think I would be the first one to say that I would be really pleased if EBRD's own forecast for Georgia for this and next year are big. I am pretty sure that the forecast for this year, which is about 3.8%, will be beaten, because already Georgia has gone a little over 4%.

I think the forecast we had for next year will also be beaten, because Georgia will go beyond 4% next year. We will have a new forecast in November to share with you. But I am pretty sure Georgia will be growing really fast among our country operations.

The second are I think to emphasize is how the Government has really worked with the private sector, with international institutions like EBRD, including the Investor Council really trying to bring further improvements in the business climate to really encourage domestic and foreign investors to do more in this country.

I am very pleased to see how Georgia has moved up in all the international rankings throughout the last five years -to really prime place compared to many of our other countries of operation. And that, that context, Georgian context has allowed us, as EBRD to invest more and more. That is why we had a record year in 2016. We had 250 million Euros in 17 projects, which is record of EBRD for Georgia. We had within those investments in 2016 some really innovations and real firsts. We had for example 80 million Euros of investments in a wide range of private sector projects: healthcare, agribusiness, telecommunications, property and tourism. In the power energy sector we had very first ever windfarm here in Gori in Caucasus. Very first one ever in Caucasus. In the municipal sector we had three extraordinary projects for 40 million: blue buses in Tbilisi everyone knows about, solid waste collection vehicles across the nation and Kobuleti water processing plant. In transport we signed a sovereign loan to finance a construction of Sadakhlo-Bagratashen Bridge - a main border crossing point in the linkage of the regional economy. In the financial sector and I am very proud of this- we signed and launched the first DCFTA facility with the bank of Georgia and TBC. And I think that this is extraordinary, because it really helps Georgian SMEs to reach EU standards and it really helps the whole approximation process. It will take some years, but it means that Georgian companies are getting to the rights levels much faster and very ready to export into the European markets. That is really important to do so as well.

What about our future - as the Prime Minister knows, we signed I think one of the most exciting country strategies that was provided to our board last December. It has four main elements to it, all of which are very important. First of all the private sector competitiveness - our job focusing of private sector development is to make the Georgian private sector as competitive as possible. Of course the business climate change is a great help; the DCFTA indications will also help with that. We are going to be focused particularly on agribusiness, hospitality, innovation. It is important in doing all this to embrace the whole Georgian population to make sure no one is locked out from access to finance. When I went to Materia yesterday I was so pleased to see that workforce and management composition had many more women and many representatives of my age. That is good to see. We want to do more in local currency lending, more in terms of local capital market development. We have been working with Georgian authorities on that. Georgia has stood out for EBRD for issuing local bond in 2014. We want to do much more to help Georgia take advantage of its geographic positions, its interregional connectivity. We need to help Georgia in improving country's infrastructure, to take advantage of that geographical position in South Caucasus, its linkages to Europe and Central Asia. I have always said, I think its quite fortunate that you are not an oil and gas country, because that brings some other pressures. But you have water and you need to maximize water as an economic resource and development of hydro-resource and renewable resources generally is very important. We have been pleased with working with Ministry of Energy on these issues as well. I expect more investment in the hydro area. I am very pleased with Shuakhevi; I am looking forward to Nenskra and also some other projects in a couple of years. So big agenda there too. Finally, I think this is great momentum that can be stopped, but I think it will in Georgia. I think we have a group here in Government, that really wants keep reforming the economy and the political space to make it more European in every angle. Our job of EBRD is to help them do that. We will always advise them on the issues, on the policy issues and framework, but we will be investing as well. There is a bit of a job here to do. Georgia is pretty much in the top of the EBRD table, but during our meeting with the Prime Minister we just gave the leader of our team Bruno Balvanera and his colleagues a new challenge to get atop of the table and they will. It is fantastic team that does a great work here in Georgia with our teams in London, because we have wonderful colleagues both in private sector and in Government to work with.
Thank you very much.