The project will rehabilitate and upgrade metering, system control, and communications in the transmission network and electricity dispatch; rehabilitate the Zestafoni transmission substation;  finance private management contracts for the wholesale electricity market and for transmission and dispatch companies; and finance technical services for project implementation.

"This project builds on the achievements made in the power sector in recent years," said Vladislav Vucetic, World Bank Task Manager for the project. "On top of the greater reliability of the transmission system, it will lead to more transparency in electricity dispatch and trade, and to a better management and financial performance of the sector. These benefits are system-wide and should accrue to all consumers of electricity."

The first IDA-financed project in the electricity sector (the 1997 Power Rehabilitation Project) helped restructure and de-monopolize the sector, develop basic legal framework for regulation, and establish an independent regulatory commission. It succeeded in initiating the structural and regulatory reforms needed for privatization, as well as in physical rehabilitation of important generation assets. The project was accompanied by adjustment operations (the Second Structural Adjustment Credit and the Energy Sector Adjustment Credit), which aimed at further strengthening institutional and regulatory framework and financial position of the sector, leading to the privatization of significant parts of generation and distribution segments of the sector, better regulation, greater transparency in financial management, and better compensatory social protection measures.

The project will be co-financed by Kreditanstalt fur Wiederaufbau (KfW) of Germany (US$11.4 million), the European Bank for Reconstruction and Development (US$ 0.9 million), and by the project beneficiaries (US$16.9 million). The total cost of the project is US$56.6 million equivalent.

Since Georgia joined the World Bank in 1992 and the International Development Association (IDA) in 1993, the Bank has committed a total of US$635.5 million for 26 IDA credits to the country.