TBILISI, March 24, 2023 – The World Bank’s Board of Executive Directors today approved two new operations for Georgia – the $75 million Georgia Resilient Agriculture, Irrigation, and Land (GRAIL) Project and the $50 million First Green and Resilient Georgia Development Policy Operation (DPO). Both programs will support reforms contributing to a greener and more resilient development of Georgia.
“Georgia, like many other countries, is exposed to climate change and has an opportunity to step up its mitigation and adaptation efforts,” said Sebastian Molineus, World Bank Regional Director for the South Caucasus. “We are delighted that both projects focus on addressing climate-related challenges. Through these projects, we will also support Georgia as it embarks on its “last mile” structural reforms that will help the country overcome the middle-income trap and align state institutions to EU requirements.”
Through the GRAIL Project, access to irrigation and drainage services will improve, which is expected to boost agricultural production in the country. In addition, it aims to strengthen national irrigation and land management institutional capacity for climate resilient planning. Farmers and agricultural enterprises will be the primary beneficiaries of the GRAIL Project, while the rural population will also benefit from enhanced services provided by land administration institutions, as well as from the supporting activities for agriculture development. These activities will enhance farmers’ incomes and increase their resilience to the effects of climate change.
“We are very pleased that as a result of strong and successful mutual cooperation with the World Bank, the GRAIL project was approved,” said Otar Shamugia, Minister of Agriculture and Sustainable Development of Georgia. “As the project will address climate-related challenges and support development of national irrigation and land management systems capacity, it will definitely bring benefits to farmers in Georgia. GRAIL also supports the implementation of the Georgian Government’s vision on land sector development, as reflected in the 2021-2024 Toward Building a European State Program, which considers the land reform one of the top priorities for Georgia.”
The First Green and Resilient Georgia DPO is designed to support the country in greening economic activity, mitigating fiscal risks, and building the institutional capacity for better access to land, water, and financial services in Georgia. It is the first in a series of two budget support operations that will assist the Georgian government in tackling complex and interrelated challenges, including economic, climate, and structural issues. The operations will support the adoption and implementation of: (i) the new law on industrial emissions; (ii) gender and climate change tagging of the government’s budget; (iii) a sustainable finance taxonomy by the National Bank of Georgia; (iv) a new renewable energy support scheme; and (v) regulation to implement the Forest Code of Georgia. Aiming to reduce fiscal risks, the DPO will promote enhanced governance of State-Owned Enterprises, as well as improvements in disaster risks financing.
“We deeply appreciate the support from the World Bank in all key sectors for Georgia,” said Lasha Khutsishvili, Minister of Finance of Georgia. “During our long lasting and successful cooperation, one of the very important projects is the DPO, which will cover the reform agenda in selected directions and advance climate change response to ensure resilient and inclusive growth. We believe that significant environmental improvements will be demonstrated also through the GRAIL Project. I want to thank the World Bank for contributing to the development of Georgia, and I hope that this fruitful cooperation will further deepen.”
Both newly approved projects will support the adoption of a new law on National Spatial Data Infrastructure, the introduction of a new tariff-setting methodology for irrigation water, and regulatory changes to facilitate e-Payments, thus bringing the national regulation in line with EU standards.