MANILA, PHILIPPINES (21 September 2021) — The Asian Development Bank (ADB) has approved a $100 million policy-based loan to support the Government of Georgia’s efforts to strengthen its electricity transmission sector by improving the operational structure, corporate governance, and financial management of the country’s electricity transmission company and its subsidiary.
“This is a flagship program for Georgia, focusing on improving the financial and corporate governance of two major energy sector state-owned enterprises (SOEs),” said ADB Director General for Central and West Asia Yevgeniy Zhukov. “We expect this to set the path for other Georgian SOEs to follow and ADB stands ready to support the government’s broader SOE reform agenda and economic growth.”
Under its Electricity Transmission Sector Reforms Program, ADB will support institutional reforms in the Joint-Stock Company Georgian State Electrosystem (GSE), helping to transform it into a modern, operationally efficient, and financially sustainable corporate entity.
GSE and its subsidiary EnergoTrans currently rely heavily on government funding and external borrowing and have accumulated substantial debt to support upgrades and the expansion of transmission infrastructure. The government has taken several steps to reform GSE, including approving a new company charter and an independent supervisory board that adopted codes and frameworks based on international best practice and local laws. The government has also enhanced GSE’s investment planning, debt management capacity, and resilience to external shocks through capitalization and increased revenue generation.
ADB’s program will continue to support reforms to improve GSE’s operational structure and efficiency, corporate governance and institutional environment, and financial sustainability. “This program will help improve the financial sustainability and performance of Georgia’s energy sector and free up fiscal space to allow the government to better allocate resources to critical areas such as the COVID-19 economic recovery,” said ADB Principal Energy Specialist Adnan Tareen.
Georgia joined ADB in 2007 and the bank has since become one of the country’s largest multilateral development partners with committed loans amounting to $3.92 billion and technical assistance projects worth $28.9 million. ADB’s key development priorities in Georgia include expanding trade, creating more jobs, and combating poverty by developing economic corridors.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.