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World Bank Supports Regional Development Project to Improve Infrastructure and Incomes in Georgia’s Kakheti Region

Published: March 28, 2012 | 7:53 pm
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The COMMERCIAL TIMES

TBILISI, March 28, 2012. The Government of Georgia and the World Bank signed the Financing Agreement for US$ 60 million IBRD (International Bank for Reconstruction and Development) loan to Georgia for the Regional Development Project. The agreement was signed by Dimitri Gvindadze, the Minister of Finance of Georgia and Asad Alam, World Bank Regional Director for the South Caucasus. The Project was approved by the World Bank Board of Executive Directors on March 20, 2012.

The Project objective is to improve infrastructure services and institutional capacity to support the development of tourism-based economy and cultural heritage circuits in the Kakheti region.

The Project includes two components: i) Infrastructure investment and ii) Institutional development. The  activities supported are expected to bring direct benefits to the residents of Kakheti and the tourists visiting the region. The project is expected to generate employment and improve infrastructure and transport connections.

A series of broad-based public consultations were held by the World Bank Georgia Office that helped to identify the needs of the region and adequately prepare the Project.

“It is my firm belief that the Kakheti regional development project has all prerequisites to become one of the flagship concepts and dimensions of Georgia’s cooperation with the World Bank. The project is geared towards improvement of quality of life of local population, creating job opportunities and generating public-private partnerships. I am certain that the project-specific work sponsored by the World Bank and implemented by the Government shall provide major impetus towards regional economic development through tourism, hospitality industry and agricultural development,” said Dimitri Gvindadze, Minister of Finance of Georgia.

“The main beneficiaries are the residents and tourists in Kakheti who will have access to improved municipal services and restored cultural heritage sites, and local  buildings,” said Asad Alam, World Bank Regional Director for the South Caucasus. “Owing to these improvements, the population of the region is expected to see enhanced welfare and incomes. Overall, the project will help regenerate the region’s economy, improve people’s lives and attract more visitors.”

The project builds on a series of World Bank interventions in the region over the years. These include the Kakheti Regional Roads Project and the Secondary and Local Road Projects, which have significantly reduced travel time. In addition, the Regional and Municipal Infrastructure Development Project has improved water services and urban roads in several Kakheti towns and villages. The Rural Development Project has helped to support lines of credits to microfinance institutions in the region. The Irrigation and Drainage Project allowed to rehabilitate headworks and main irrigation channels in Kvemo Alazani. Under the Education System Realignment and Strengthening Project, two new schools with modern infrastructure tailored for interactive teaching and learning were built in the villages of Jugaani and Gavazi.

Municipal Development Fund of Georgia (MDF) is the implementing agency for the Project.

Since 1992, World Bank commitments to Georgia total approximately US$ 1.62 billion for 52 projects.

The loan for the Regional Development Project is a variable spread loan with a maturity of 25 years, including a grace period of 10 years.

 

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