EBRD will fund rail and electricity supply improvements

The European Bank of Reconstruction and Development (EBRD) has allocated a 180 million euro loan for two very significant projects in Georgia, the agreement concerning this being signed at the Georgian Ministry of Finance on March 18. The signing was attended by representatives of the Finance and Energy Ministries, Tbilisi Mayor Gigi Ugulava and Chair of EBRD Thomas Mirow.

Two very important projects for the country which will be financed by ERBD are constructing a new railway route to bypass the centre of Tbilisi and building a new high-voltage power transmission line. From the total sum 100 million euro will be spent on the removal of the rail line from the capital and building a new two track line 10 km north of Tbilisi. Ugulava said at the meeting that this new bypass road will alleviate the ecological problems caused by the existing route, which practically divides the capital into two. "On the land cleared by the removal of the existing track a multifunctional centre will be built which will increase the number of people employed in the city,” Ugulava mentioned. This section of the railway is very important as it is part of the main freight route between western and eastern Georgia. Constructing the new line will start in spring and end in three years.

The remaining 80 million euro of the loan will be allocated for improving the Georgian electricity transmission system. This will involve constructing a 315 km high voltage electricity line between the Zestaponi region in western Georgia and Gardabani in the eastern part of the country and building a new substation in Akhaltsike near the Turkish border, which will connect the Georgian and Turkish power networks.

President of Georgia Mikheil Saakashvili talked about the importance of these projects while meeting Mirow on the same day. Both the President of Georgia and the EBRD representative believe the projects are essential and very significant for the country’s development. "These two projects can be called historic for our country’s advance and future," Saakashvili said. "This project will open the door to future investments in the electricity generation sector, in particular in renewable energy, for which the Caucasus region has great potential,” Thomas Mirow stated.

The projects will also have co-financiers. The transmission line project is being co-financed by the European Investment Bank, the European Union Neighbourhood Investment Facility and Germany's Kreditanstalt fur Wiederaufbau (KfW). The Tbilisi bypass rail project is expected to be co-financed by the European Investment Bank with grant financing from the EU’s Neighbourhood Investment Facility with additional grant funding from the German Government.