(MENAFN- Trend News Agency)
BAKU, Azerbaijan, August 20. As Georgia ramps
up its climate change initiatives ahead of the COP29 conference in
neighboring Azerbaijan, the Asian Development bank (ADB) is playing
a critical role in supporting the country's climate action efforts,
said Lesley Bearman Lahm, ADB Country Director for Georgia, in an
interview with Trend .
"ADB's new Country Partnership Strategy with Georgia outlines a
climate action plan which will be integrated into key areas of
engagement until 2028," Lahm stated. "These key areas include
transport, energy, waste management, and urban and regional
development." She emphasized that ADB is committed to strengthening
cooperation across the Central Asia Regional Economic Cooperation
(CAREC) region, particularly through decarbonizing value chains and
managing disaster risks.
In addition to these strategic initiatives, ADB is providing
technical assistance to support Georgia in aligning with the Paris
Agreement and achieving its updated national targets for 2030.
"Through technical assistance, ADB aims to provide policy support
for Georgia in ensuring Paris Agreement alignment and achieving
updated national targets for 2030," Lahm noted.
ADB has also been instrumental in fostering innovative
sustainable finance in Georgia, targeting climate-related
investments. "In 2023, ADB invested 20 million Georgian lari in
Tegeta's green bonds, promoting electric vehicles, expanding the
charging network and services, and decarbonizing the transportation
sector," the country director highlighted. Another significant
investment in 2023 was ADB's $16 million contribution to Georgia
Capital JSC's $150 million sustainability-linked bonds, which
support CO2 emissions reduction through energy efficiency projects
and the transition from fossil fuels to renewable energy
sources.
The bank is also exploring new renewable power projects,
including hydro, solar, and wind energy, which are expected to
boost Georgia's energy security and resilience while tackling
climate change. "These projects will have a positive impact on
Georgia's energy security and resilience, help tackle climate
change and prevent adverse effects, and have meaningful benefits to
the local communities and general public," Lahm said. "They will
also support Georgia in meeting its nationally determined
targets."
With COP29 on the horizon, Lahm underscored the importance of
regional integration and cooperation. "COP29 is a great opportunity
to explore opportunities for enhanced and comprehensive regional
integration and cooperation, and build sustainable and resilient
economies," she remarked. "ADB has been at the forefront of
regional integration efforts and is discussing its support to the
South Caucasus countries for COP29 preparations."
Further speaking, Lesley Bearman Lahm added that the ADB has
committed up to $5 billion in total assistance to Georgia.
"Of this amount, $935 million is allocated directly to the
private sector. The bank's sovereign loan portfolio currently
stands at $1.9 billion, with over half dedicated to transportation
and road infrastructure and a third to urban and water
infrastructure projects," she said.
Lahm highlighted Georgia's potential as a premier tourist
destination and natural transit hub, noting that ADB's efforts are
directed towards developing modern economic corridors, livable
cities, and a skilled workforce. "Ensuring that these developments
lead to green, inclusive, and resilient growth remains a top
priority," Lahm said.
The country director expressed strong support for Georgia's
ambitious projects, which aim to modernize road networks, water
supply and sanitation systems, and energy infrastructure. "These
investments have already started to yield benefits, improving
economic opportunities and enhancing regional significance," Lahm
noted. In recent years, ADB has expanded its portfolio to cover
education, health, and agriculture, believing that investments in
human capital, social protection, and agriculture will advance food
security, build climate resilience, and enhance quality of
life.
An example of ADB's recent engagement is its investment of $40
million in Georgia Global Utilities JSC's (GGU) $300 million Green
Bond, announced on July 26, 2024. This investment, comprising $20
million from ordinary capital and $20 million from the "LEAP 2"
fund managed by ADB with a $1.5 billion commitment from JICA, will
enhance Tbilisi's water supply network and improve climate
resilience for surface and groundwater resources. "This marks the
latest in approximately 45 transactions from ADB's Private Sector
Operations in Georgia, reinforcing ADB's role as a leading climate
solutions bank in the region," Lahm said.
Additionally, ADB has recently approved a health program aimed
at improving access to quality, affordable healthcare, particularly
for the poor and vulnerable. The program focuses on enhancing
health services, increasing public funding for primary care, and
improving digital health management.
ADB's agriculture program is set to modernize irrigation systems
and support institutional reforms in Georgia. "This initiative will
assist farmers in the Kakheti region with advanced agricultural
production technologies for high-value crops like grapes. It
includes climate-smart water management, local water storage and
recycling, and measures to address soil erosion," Lahm added.
Looking ahead, the ADB plans to continue supporting the growth
of micro, small, and medium enterprises (MSMEs) in Georgia through
both bank and non-bank finance, as well as capacity-building
initiatives, she noted.
"In 2023, we assisted Credo Bank JSC (Credo), one of Georgia's
largest banks, to expand its lending in the agriculture sector,"
Lahm said. "This effort was aimed at boosting domestic food
production and reducing imports to address food security
concerns."
ADB committed local currency loans totaling 65 million Georgian
lari (approximately $24.8 million) for the Credo Bank Supporting
Food Security through the Inclusive Access to Finance Project.
"This funding allowed Credo to extend loans to a diverse group of
rural borrowers, including women farmers and small business owners
involved in production, processing, and trade across the rural
value chain," Lahm explained. In addition to the loans, ADB
provided a $550,000 grant to help Credo's clients, particularly
women entrepreneurs, improve their skills in both agricultural
production and digital services.
As part of its Trade and Supply Chain Finance Program's gender
and inclusion strategy, ADB conducted several workshops in 2023 in
collaboration with the International Chamber of Commerce and
Enterprise Georgia. "These workshops aimed to support women
entrepreneurs in accessing international markets, improving
liquidity, and managing the risks associated with international
trade," Lahm noted.
Lesley Bearman Lahm emphasized the strategic significance of
Georgia's location at the crossroads of Asia and Europe.
"Georgia is at a unique location that allows it to serve as an
important transit route linking the Caucasus and Central Asia with
global markets through its roads, railways, and Black Sea ports,"
Lahm said. She noted that the performance of Georgia's transport
and logistics sector has wide-reaching implications for the entire
region, particularly for the landlocked countries of the Caucasus
and Central Asia.
Lahm highlighted the critical importance of the Middle Corridor.
"The route enhances trade opportunities and facilitates expanded
access to new markets," Lahm explained. "It also helps create new
jobs and plays a significant role in developing infrastructure
across the countries involved." She added that combining different
transport modalities could improve connections between economic
centers and increase logistics efficiency.
However, Lahm acknowledged that there are challenges to
overcome, including inadequate railway networks, insufficient
feeder vessels and port infrastructure, as well as time-consuming
border crossings and cumbersome customs clearance procedures.
"Addressing these issues, along with increased participation from
the private sector, is essential for optimizing the Middle
Corridor's potential," Lahm said.
The country director also provided insights into the ADB's
projections for Georgia's economic growth, inflation rate, and
monetary policy, while also discussing the bank's financing plans
for the coming years.
"ADB recognizes Georgia's strong track record of impressive
macroeconomic performance, ensuring resilient economic recovery and
price stability following COVID-19 and the Russian invasion of
Ukraine," Lahm stated. She highlighted Georgia's V-shaped recovery
post-pandemic, marked by two consecutive years of double-digit
growth in 2021 and 2022, alongside a low inflationary environment
and continued robust growth in 2023 and 2024, with a growth rate of
9.3 percent to date.
However, Lahm acknowledged the challenges ahead, especially
given the geopolitical tensions and economic developments in the
wider region. "Though revenue from tourism continues to remain
strong, increasing by 1.5 percent in the first quarter of 2024
year-on-year and demonstrating 40 percent growth compared to the
pre-pandemic level in 2019, we have observed a 36-percent decline
in money transfers in the same period, along with a 10-percent
annual decline in exports," she explained. These export challenges
were attributed to a slowdown in vehicle re-exports and weak global
demand for ferroalloys.
Despite these headwinds, Lahm noted that Georgia's unemployment
and poverty rates have dropped to historically low levels, with
unemployment at 14 percent and poverty at 11.8 percent. "The IMF
recently recognized Georgia as one of the best performers globally
in terms of job creation and unemployment reduction, assessing the
past 10-year unemployment trend across countries," she added.
Nonetheless, Lahm emphasized the need for Georgia to continue
implementing structural reforms to diversify its economy, enhance
labor productivity, and support technological innovation.
Looking ahead, Lahm outlined the ADB's financing plans for
Georgia, which are aligned with the country's National Development
Strategy, Vision 2030. "The 5-year partnership strategy that ADB
has endorsed for Georgia directly supports three major priorities –
economic development, social policy and human capital development,
and public administration," she said. ADB's focus will be on
promoting regional cooperation and integration, private sector-led
growth, and sustainable development.
"We will continue to help Georgia expand its multi-modal
transport network, strengthen the population's climate- and
disaster-resilience, and scale up clean energy generation and
trade," Lahm noted. ADB's support will also extend to strengthening
national social protection systems, pension reforms, and capital
market development, as well as enhancing vocational education and
training alongside the country's general education system through
ongoing and planned projects.
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