World Bank approves $ 114.9 mm for Georgia

Jul 01, 1999 02:00 AM

The World Bank today approved the following four credits for Georgia totalling $ 114.9 mm equivalent: Third Structural Adjustment Credit ($ 60 mm equivalent/SDR44.3 mm); Energy Sector Adjustment Credit ($ 25 mm equivalent/SDR18.1 mm); Structural Reform Support Project ($ 16.5 mm equivalent/SDR12.2 mm); and Judicial Reform Project ($ 13.4 mm equivalent/SDR 9.9 mm).

Third Structural Adjustment Credit (SAC III)
This credit is designed to support the government's efforts to accelerate its economic reform program by providing assistance in the following areas: Reduction of Macroeconomic Imbalances and Strengthening Fiscal Performance. The SAC III will assist the government in reducing the overall fiscal deficit, lowering inflation, and stabilising the exchange rate. It will contribute to: (1) improving revenue mobilisation through measures to reduce exoneration and special tax advantage; institutional changes in the tax and customs administration; training of tax inspectors; and establishing formal appeal and investigation systems; and (2) enhancing expenditure management through strengthening the Ministry of Finance and Treasury Department; introducing a new computerised system of revenue allocation; and establishing a special monitoring mechanism for health, education, and poverty benefit.

Private Sector Development.
The credit will help the government: (1) create an environment favourable to private sector growth; (2) accelerate change in land ownership and develop land and real estate markets; and (3) promote private participation in infrastructure and complete state divestiture from the enterprise sector.

Energy Sector Adjustment Credit (ESAC)
The ESAC will enhance financial management, increase the availability of energy on a sustainable basis, catalyse private investment, help realise Georgia's pipeline transit potential, and upgrade environmental management. The credit will support the government's energy sector reform program in the following areas:
Power Sector: lay the foundations for a competitive wholesale electricity market, and mitigate the social costs of the reform program;
Natural Gas Transmission and Distribution: establish a new gas regulatory framework and further privatise municipal gas distribution companies;
Oil and Gas Exploration and Production: attract investment for exploration and production of oil and natural gas;
Oil and Gas Transit Pipelines: improve the investment climate for oil and gas pipelines as a potential major source of tax revenue and other benefits for Georgia; and
Environment: strengthen environmental management and strengthen the legal framework including the adoption of legislation clarifying environmental liability and reviewing the existing insurance arrangements.

Structural Reform Support Project
The project will provide technical assistance to the Georgia in implementing the reform measures included in the SAC III and ESAC, along with the implementation of a hospital restructuring program.
The four components of the Structural Reform Support project are:
Private Sector Development, which will support the open, competitive, and strategic privatisation of a few large infrastructure enterprises through the financing of financial, legal, and technical advisory services; strengthen the capacity of the energy and infrastructure regulatory institutions to enable strong private sector participation; and strengthen the supervision department and monetary policy capacity of the National Bank of Georgia.
Public Sector Reform and Public Information, which will assist the government in strengthening the institutional capacity of the Ministry of Finance and enhancing budget management; implementing public procurement reforms; improving the licensing regime; and implementing the program of public information on economic reforms.
Social Sustainability, which will support the establishment of a credible and affordable safety net through an improved information and monitoring system to track poverty impact; design and pilot a workfare program as a means to target assistance to the poor; and assist the government in developing a pension reform strategy, including building institutional, technical, and human resources capacity for its successful implementation.
Hospital Restructuring, which will help the government improve the efficiency of the health care system; reduce the number of hospitals in the public sector while improving the quality of services in these institutions; and improve equity in health care financing.
Judicial Reform Project
This project will support the development of an independent, professional, and equitable judiciary in Georgia by providing assistance in the following areas: Improvement of Court Administration and Case Management through: (i) establishment of a court administration system under the leadership of bodies with adequate representation of the three instances of the court system; (ii) implementation of a modern computerised system of case management; and (iii) provision of a system for audio recording of court proceedings to ensure the integrity of court protocols. This component will include a training program for managing judges and court administrators; Infrastructure Rehabilitation through adaptation and rehabilitation of up to eleven court buildings, facilities for the Judicial Training Centre, and offices for the Department of Legal Services and the Ministry of Justice; Enforcement of Court Judgements through establishing a new department for enforcement of court decisions within the Ministry of Justice; Establishment of Judicial Training Centre and Implementation of a Public Information and Education Campaign.

All four credits will be disbursed on standard IDA terms, with a maturity of 35 years, including a 10-year grace period. Since Georgia joined the World Bank in 1992, commitments total approximately $ 507 mm for 21 projects.

Source: M2 PressWire via Newspage
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