The EBRD and Georgia are stepping up their cooperation as the country’s economy faces the challenge of the coronavirus outbreak.
The government of Georgia recently announced an economic stimulus package consisting of two parts to support the economy: benefits provided by banks in terms of restructuring loan repayments, and assistance allocated from the national budget.
The EBRD has made available an emergency solidarity package of €1 billion for its existing clients across 38 economies, including clients in Georgia.
Joining forces was the focus of a telephone call between Georgia’s Minister of Finance, Ivane Matchavariani, EBRD Managing Director for Eastern Europe and the Caucasus, Matteo Patrone, and EBRD Regional Director for the Caucasus, Catarina Bjorlin Hansen. EBRD officials pledged rapid financing to help local firms deal with the impact of the coronavirus outbreak.
Minister Matchavariani said: “The EBRD is a reliable partner of our country and we very much appreciate the Bank’s quick response to the crisis. The financial assistance provided by the EBRD will help the country to ensure its economic stability in the face of the global challenges caused by Covid-19. I would like to thank the Bank’s management for their support and hope that with the help and efforts of our international partners the Georgian economy will be able to overcome today’s situation with as little losses as possible.”
Mr Patrone praised the close cooperation between the EBRD and the ministry and the steps the government has taken to deal with the crisis. He reconfirmed the Bank’s strong commitment to supporting the country’s economy, especially in times of crisis.
He said: “The EBRD has set up a ‘resilience framework’ to provide financing for existing EBRD clients that have strong business fundamentals but are experiencing temporary difficulties. More generally, we are prepared to step up our efforts together with the Georgian authorities to support the economy.”
The EBRD is a triple A-rated international financial institution with a strong capital base. In a crisis it can increase its support rapidly and effectively. For instance, in the wake of the 2008 financial crisis, the Bank ensured a lifeline for Georgia’s financial sector with a large liquidity injection into the banking sector.
As Georgia faces new economic challenges, the EBRD’s current offer includes measures such as emergency liquidity, working capital and trade finance. The Bank is working with long-standing partners such as commercial banks to support access to finance for the private sector, especially for small and medium-sized enterprises (SMEs).
In addition, the parties discussed speeding up the development of several projects to secure job creation. For example, the Bank is working on designing a new framework to support municipalities across the country through improved access to infrastructure. The EBRD is also working to assist the upgrade of the electricity grid to further support the renewable energy generation sector.
The EBRD also plays an important role in leading private and public sector dialogue through the Investors’ Council platform, assessing the real and immediate needs of the private sector.
Futhermore, the Bank provides business advice to local SMEs and has helped more than 1,400 firms to improve their performance and growth. It is seeking ways to strengthen these activities to help SMEs overcome the crisis.
The EBRD is a leading institutional investor in Georgia. Since the start of its operations in the country, the Bank has invested over €3.7 billion in 249 projects in the financial, corporate, infrastructure and energy sectors, with 87 per cent of these investments in the private sector