ADB approves a $100 mln loan for Georgia

By Natalia Kochiashvili

Friday, May 29

ADB’s CARES package was developed in close coordination with the International Monetary Fund and other development partners as part of a coordinated effort to help Georgia tackle the COVID-19 crisis.

The loan is issued to mitigate adverse health, economic impacts of COVID-19 in Georgia. Photo: Opiniojuris

The Asian Development Bank (ADB) has approved a $100 million loan to help the Government of Georgia contain the spread of the Coronavirus, mitigate the negative impacts on business and protect the livelihoods of the most vulnerable groups, including women and children.

“As a major trade and tourism hub, COVID-19 poses a grave threat to the health and economic wellbeing of Georgia,” said ADB President Masatsugu Asakawa. He announced the bank’s full commitment to supporting Georgia’s response, adding that this comprehensive package will help address the country’s immediate health and socioeconomic needs.

ADB president also emphasised the importance of the cooperation in fiscal management and social protection between ADB and Georgia that has been building for more than a decade and stands as a key factor to the economy’s recovery.

ADB reports that Georgia began to introduce containment measures in January to shield its vulnerable public health system, but the pandemic has significantly impacted the economy. Travel restrictions hit the tourism sector, which recorded an almost 60% year-on-year decline in international visits in March.

The COVID-19 Active Response and Expenditure Support (CARES) Program will provide budget support to the government and help fund its comprehensive anti-crisis plan. This includes tax deferments for more than 4,000 small and medium-sized tourism businesses and subsidized loan repayments for at least 2,000 small and medium-sized hotels.

The loan will also be used to fund vulnerable groups by helping to fund the government’s social assistance measures. These include temporary payments for up to 350,000 formal-sector workers who could lose their jobs as a result of the pandemic; one-off payments for up to 250,000 informal or self-employed workers; subsidized utility bills for 1.2 million families; and a 6-month price freeze on 9 key food products.

To help contain the spread of the disease, the loan will help to fund free access to COVID-19 diagnostic and treatment services including for the poor, for whom out-of-pocket health expenses are particularly burdensome.

ADB’s statement reads that COVID-19 particularly threatens Georgian women, who make up around 60% of both tourism and frontline medical workers. Therefore, this loan will help provide personal protective equipment to frontline female medical workers and expand cash assistance to disabled women and children. Of the 6,000 tourism and hotel businesses supported through the government’s tax and loan subsidy scheme, more than one-third are owned or managed by women.

The loan is funded through the COVID-19 pandemic response option (CPRO) under ADB’s Countercyclical Support Facility. CPRO was established as part of ADB’s $20 billion expanded assistance for developing member countries’ COVID-19 response, announced on 13th of April.