TBILISI, October 3, 2008 – World Bank Country Manager for Georgia Roy Southworth and Minister of Finance, Nikoloz Gilauri today have signed a Development Credit Agreement for the Supplemental Credit to the Fourth Poverty Reduction Support Operation (PRSO IV) for Georgia in the amount of US$ 40 million. The Credit, that was discussed by the Bank’s Board of Executive Directors on 2 October, 2008, will provide supplemental budget support to the Government to help efforts to sustain implementation of the PRSO program in the face of unanticipated budget constraints associated with the August 2008 crisis.
The PRSO reform program focuses on four critical reform pillars: (i) strengthening public sector accountability, efficiency, and transparency; (ii) improving electricity and gas sector services; (iii) improving the environment for private sector development; and (iv) improving social protection, education and health care services.
“The Government of Georgia has responded quickly to the crisis by taking decisive first steps to address the needs of IDPs, rehabilitate basic infrastructure, and mitigate the shock to investors and consumers’ confidence. At the request of the Government, the World Bank quickly prepared a Supplemental Credit for the PRSO IV expeditiously. The results of the reforms supported by the PRSO program are encouraging and in some areas progress has exceeded expectation. The reforms have strengthened public finances and increased transparency and accountability for public resources, rapidly modernized the electricity and gas sectors, substantially improved the business environment and enhanced social services and the social safety net. In sum the reforms are serving Georgia well as the economy has shown increased resilience to shocks and the growth outlook remains positive”, said Roy Southworth.
“At the same time as requested by the Government, the World Bank recently is leading a Joint Needs Assessment (JNA) team including the Asian Development Bank, the European Investment Bank, the European Bank for Reconstruction and Development, the European Commission, the International Finance Corporation, and the United Nations. The JNA mission, working closely with the Government and the EC preliminary assessment team aims to provide a unified and consolidated view of the country’s recovery and reconstruction needs, whilst maintaining a development perspective”, said Roy Southworth. “Similarly at the request of the Government, the EC and the US are preparing substantial packages of financial assistance and a donors’ conference is planned for October 22, 2008.”
The series of Poverty Reduction Support Operations has been the cornerstone of the Country Partnership Strategy (CPS) for Georgia, which was approved by the World Bank’s Board of Executive Directors on 15 September 2005. A CPS Progress Report was prepared in June 2008 which confirms the overall direction of the program and indicates that assistance has been higher than anticipated—$166 million over the first three years of the program compared to $143 million originally envisioned over a period of four years.
New IDA credits carry a maturity of 20 years, including a grace period of 10 years.
Attached please find the Georgian version of Press Release:
SupplementalCreditPRSOIV.doc
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