World Bank Supports Improved Tourism Infrastructure in Georgia’s Samtskhe-Javakheti and Mtskheta-Mtianeti Regions

July 1, 2015

WASHINGTON, July 1, 2015 – The World Bank Board of Executive Directors approved today an International Bank for Reconstruction and Development (IBRD) loan in the amount of US$60 million to Georgia for the Third Regional Development Project. The project objective is to improve infrastructure services and institutional capacity to support increased contribution of tourism in the local economy of the Samtskhe-Javakheti and Mtskheta-Mtianeti regions.

The project includes two components: i) urban regeneration and tourism circuit development and provision of public infrastructure to attract private investments, and ii) institutional development.

“The main beneficiaries of the project are the residents and tourists in Mtskheta-Mtianeti and Samtskhe-Javakheti regions, who will have access to improved public and tourism infrastructure in renovated cities cultural heritage sites,” said Henry Kerali, World Bank Regional Director for the South Caucasus. “The goal is to attract private investments, promote public-private partnerships, revitalize local business activity, and develop regional tourism circuits. Owing to these improvements, the population of the region is expected to see an improved quality of life.”

The Samtskhe-Javakheti and Mtskheta-Mtianeti regions are expected to receive improved access to, and quality of, public infrastructure; increased volume of private sector investment; and increased number of small and micro enterprises in renovated sites and cities. The Government will benefit from increased overall tourism spending and satisfaction, job creation, improved institutional capacity of selected agencies, and improved capacity to operate and maintain assets.

A series of broad-based public consultations were held by the World Bank Georgia Office that helped to identify the needs of the region, complete the Tourism Development and Marketing Strategy for each region, and prepare the project to respond to these needs.

A tourism circuit was identified in each region in participation with all stakeholders. Each region offers a variety of tourism products with the potential to offer high-quality tourism through preserving and enhancing cultural heritage, ecosystems, wildlife, winter-ski resorts and summer-mountain adventure activities. Harnessing the tourism potential of both regions would help to provide job opportunities particularly in boutique hotels and SMEs sectors.

"The project aims to promote the local economy in the two regions by carrying out an integrated approach to developing tourism, focusing on infrastructure, urban renewal, cultural heritage restoration, developing skills and making the environment attractive for private sector investments in the regions,” said Ahmed R. Eiweida, Task Team Leader for the Regional Development Projects. “Overall, the project is expected to support better integration of these two regions in the broader Georgian and regional tourism context.”

The project is expected to support better integration of the two regions with the country-wide tourism circuits, to better utilize the hitherto untapped significant tourism and hospitality industry potential. The two regions will be reinvigorated to join Georgia’s key regions of growth and attraction in the broader tourism and economic growth context.

By focusing on promoting productive activities along with provision of complementary infrastructure and basic services, the proposed Project can offer income generating opportunities for these regions. Employment opportunities can, in turn, help boost shared prosperity in the two regions.

The Third Regional Development Project will continue to support institutional capacity and performance of the Georgia National Tourism Administration (GNTA), National Agency for Culture Heritage Preservation of Georgia (NACHP), National Museum, the project implementing agency – Municipal Development Fund of Georgia (MDF), and other local and regional entities

This is the third regional development project approved by the World Bank for Georgia. The first Regional Development Project for Kakheti (US$60 million IBRD loan) was approved by the World Bank in March 2012, and the second Regional Development Project for Imereti (US$30 million IBRD loan) in November 2012.

World Bank commitments to Georgia since 1992 total approximately US$ 2.39 billion.

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