The Asian Infrastructure Investment Bank’s (AIIB) Board of Directors has approved a loan of EUR45 million (approximately USD50 million equivalent) to Georgia to mitigate the negative economic and social impacts of COVID-19 and sustain the momentum of pre-pandemic reforms that support economic growth and resilience.
Funded under AIIB’s COVID-19 Crisis Recovery Facility (CRF) and cofinanced with the World Bank, the loan will fill the unanticipated financing gap that has arisen due to the impact of the COVID-19 outbreak, which could jeopardize Georgia’s ongoing reforms under the Economic Management and Competitiveness Program (EMCP). Before the pandemic, Georgia adopted reforms under the EMCP designed to sustain rapid growth and ensure inclusion, job creation and resilience through measures to strengthen economic management and enhance competitiveness. COVID-19 has caused government financing constraints, creating huge funding needs for the ongoing implementation of reforms under the EMCP.
“The loan provides emergency budgetary support to enable the Government of Georgia to respond to the pandemic more effectively,” said AIIB Vice President, Investment Operations, Konstantin Limitovskiy. “By providing financing to support mitigation measures and safeguard macroeconomic stability, AIIB’s response will help minimize losses and put the country back on the recovery path.”
The financing will enhance inclusive growth and competitiveness, invest in human capital and build resilience by improving connectivity and integration, diversifying sources of finance, and improving the quality of the education system and macro-fiscal management.
This loan is the second for Georgia under the CRF, following an earlier emergency assistance of EUR91.34 million approved in May 2020, under which Georgia’s health infrastructure and social protection measures for COVID-19 preparedness were financed.
While AIIB does not have a regular instrument for policy-based financing or budget support, the Bank is extending such financings on an exceptional basis under the CRF to support its members through programs cofinanced with the World Bank or ADB.
As of July, AIIB’s Board of Directors has approved a total of 16 projects amounting to over USD5.9 billion to help 12 members navigate the challenges of these highly uncertain times. AIIB is currently reviewing other projects from clients. Projects being proposed under the CRF can be found here.
More information on the project can be found here.
About AIIB
The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank with a mission to improve social and economic outcomes in Asia. Headquartered in Beijing, we began operations in January 2016 and have now grown to 102 approved members worldwide. By investing in sustainable infrastructure and other productive sectors in Asia and beyond, we will better connect people, services and markets that over time will impact the lives of billions and build a better future.
