ADB Approves First Sector Development Program in Georgia to Support Sustainable Water Supply and Sanitation Services
The Asian Development Bank (ADB) today approved $150 million (in euro equivalent) in loans to improve water supply and sanitation services in Georgia and help the government craft an integrated approach to the sector’s development. Under the Sustainable Water Supply and Sanitation Sector Development Program, ADB will provide a $130 million policy-based loan and a $20 million project loan.
“Presently, the management and operation of water supply and sanitation in Georgia is inefficient,” said ADB Principal Urban Development Specialist Heeyoung Hong. “This compromises the sustainability of the sector and leaves disparities between urban and rural areas’ access to reliable water supply and sanitation services. This program aims to help Georgia improve governance and efficiency of the sector and ultimately improve services for more households and businesses.”
Water supply in Georgia ranges from four hours to 24 hours per day, posing a significant health risk during the coronavirus disease (COVID-19) pandemic. About 92% of urban and 64% of rural residents receive piped water, while 84% of urban and 20% of rural residents have access to sewerage systems. Only 36% of the total population benefit from wastewater treatment.
ADB’s policy-based loan will support the government’s efforts to develop a cohesive water supply and sanitation policy that balances development in urban and rural areas. It will help improve the legal, regulatory, and institutional environment to pave the way for new investments and private sector engagement. It will strengthen the capacity of local governments and the United Water Supply Company of Georgia (UWSCG), a state-owned enterprise, to enable them to adequately meet the demand in urban and rural areas.
The project-based loan will fund operation and maintenance capacity and equipment of UWSCG. It will help to prepare for national-scale rural water supply and sanitation development. In Telavi city, a regional center that has an average of four hours of water supply daily, the rehabilitation of water systems and the creation of new reservoirs and wells will ultimately enable 24-hour water supply. The number of household connections will also be increased, and metering will be raised to 100% from the current 40%.
ADB will also administer a $250,000 technical assistance, which will introduce an asset management system with high-level technology for water supply in selected cities. Of this amount, $225,000 will be financed on a grant basis by ADB’s High-Level Technology Fund, while the government will provide the remaining $25,000.
ADB has been helping to improve water and sanitation in Georgia since 2011 when it began supporting UWSCG through a multitranche financing facility of up to $500 million. This increased access to water supply and sanitation services and benefited over 300,000 people in 12 cities. In July, ADB announced a $40 million investment in Georgia’s first-ever green bonds with proceeds to upgrade water supply and sanitation in Tbilisi and nearby municipalities, and refinance debt of renewable energy and water operations. The green bonds were issued by Georgia Global Utilities JSC, whose main subsidiary, Georgian Water and Power LLC, is the largest privately-owned utility company in the country, serving around 1.4 million customers.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.