Georgia expects the donor countries to provide major new aid funds for Georgia to address the governance, budgetary and energy problems in 2004-2006.
At the Donors’ Conference in Brussels on June 16-17, which is co-chaired by the European Commission and the World Bank, Georgian Prime Minister Zurab Zhvania will submit a request for urgent financial priorities in the amount of USD 480 million for the years 2004-2006.
“This conference demonstrates once again the readiness of the international community to assist Georgia in overcoming current problems. We have to convince the donor countries that the Georgian government will affectively use this aid fund,” Zurab Zhvania said on June 15 speaking from Brussels to Imedi television.
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| Georgia estimates it needs total $480 million for: • Budget support – $125 ml. • Energy sector – $82 ml. • Governance – $78 ml • Poverty reduction – $73 ml. • Infrastructure rehabilitation –$77 ml • Agriculture/food safety – $ 28 ml • Adjara reintegration – $22 ml |
The European Union said on June 15 that it will announce a pledge of some USD 150 million of EU support to Georgia for the period 2004-2006 at the Donors’ Conference in Brussels.
“The assistance is designed to support the Georgian government’s urgent needs in order to carry through its substantial reform plans. Together with humanitarian assistance, through the European Community Humanitarian Office (ECHO,) as well as rehabilitation in areas of Georgia affected by the conflicts in Abkhazia and South Ossetia/Tskhinvali region, total EU assistance to Georgia for 2004-2006 amounts to USD 164 million,” the press release issued by the EU on June 15 reads.
This represents a doubling of EU assistance compared with the previous 3-year period 2001-2003.
Zurab Zhvania will present at the conference Georgian government’s reforms and development agenda, which outlines priorities of financial assistance.
Georgia intends to allocate estimated USD 480 million aid in the seven most vulnerable sectors of the country: rehabilitation of energy sector; budget support; governance and anti-corruption measures; poverty reduction; infrastructure rehabilitation; agriculture and development of food safety system; the measures aiming at reintegration of Adjara Autonomous Republic.
The Georgian authorities request most of the funds for its budget support, which is estimated by USD 125 million for 2004-2006.
Georgia estimates its needs in energy sector USD 82 million for 2004-2006. Government’s priorities will be to avoid a short-term collapse of the energy system, achieve energy security for 2004-2005 winter season and to make progress in financial self-sufficiency of the sector.
Governance and anti-corruption measures is the third largest priority. USD 78 million, requested by the Georgian authorities for these measures, aims at creation of efficient and transparent civil service through administrative, law enforcement and judicial system reforms.
Georgia urges for USD 73 million for poverty reduction programs, including protection of vulnerable, especially poor and children, through education, health and social assistance.
USD 77 million is requested for infrastructure rehabilitation, particularly for two major projects: rehabilitation of roads and improvement of water supply and sanitation service to cities.
Assistance for agriculture sector, estimated USD 28 million, includes development of a food safety system.
Georgian authorities also request USD 22 million for the projects aiming at further re-integration of Adjara Autonomous Republic. Democracy building process, rehabilitation of damaged parts of road from port of Poti, outside Adjara, to Batumi, the capital of the Autonomous Republic and rehabilitation of Batumi water supply system would be top priorities for Adjara re-integration programs.
In early May, the U.S. selected 16 countries, including Georgia, that were eligible for funding offered by the Millennium Challenge Account (MCA) – the U.S. major financial aid program.
The chief executive officer of the Millennium Challenge Corporation, which administers the MCA, was visiting Tbilisi in early June to discuss the development of the various assistance proposals for Georgia.
According to the Georgian Finance Minister Zurab Nogaideli, Georgia might receive USD 400 million over 3 or 4 year time frame under the MCA.