World Bank Supports Regional Development Project to Improve Infrastructure and Incomes in Georgia’s Kakheti Region

March 20, 2012

The project will improve the access and quality of public infrastructure, enhance tourism development and improve people’s welfare 

WASHINGTON, March 20, 2012 – The World Bank Board of Executive Directors today approved a loan in the amount of US$60 million to Georgia for the Regional Development Project. The project objective is to improve infrastructure services and institutional capacity to support the development of tourism-based economy and cultural heritage circuits in the Kakheti region.

The project includes two components: i) Infrastructure investment and ii) Institutional development. The envisaged activities are expected to bring direct benefits to the residents of Kakheti and the tourists visiting the region. The project is expected to generate employment and improve infrastructure and transport connections.

A series of broad-based public consultations were held by the World Bank Georgia Office that helped to identify the needs of the region and adequately prepare the Project.

 “The main beneficiaries are the residents and tourists in Kakheti who will have access to improved municipal services and restored cultural heritage sites, and local buildings,” said Asad Alam, World Bank Regional Director for the South Caucasus. “Owing to these improvements, the population of the region is expected to see enhanced welfare and incomes.”
"The tourism strategy aims to position Kakheti as a new high quality tourism destination, seeks to attract both domestic and international tourists and is based on Kakheti’s rich cultural heritage, natural parks and wine tourism,” said Ahmed R. Eiweida, Task Team Leader for the Regional Development Project. ”The goal is to attract private investments, promote public-private partnerships, revitalize local business activity and develop regional tourism circuits.”
The project builds on a series of World Bank interventions in the region over the years. These include the Kakheti Regional Roads Project and the Secondary and Local Road Projects, which have significantly reduced travel time. In addition, the Regional and Municipal Infrastructure Development Project has improved water services and urban roads in several Kakheti towns and villages. The Rural Development Project has helped to support lines of credits to microfinance institutions in the region. The Irrigation and Drainage Project allowed to rehabilitate headworks and main irrigation channels in Kvemo Alazani. Under the Education System Realignment and Strengthening Project, two new schools with modern infrastructure tailored for interactive teaching and learning were built in the villages of Jugaani and Gavazi.

Since 1992, World Bank commitments to Georgia total approximately US$1.62 billion for 52 projects.

The loan for the Regional Development Project has a final maturity of 25 years, including a grace period of 10 years.

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