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Georgia Rejects 100 million EUR Assistance Program by EIB

Georgia has refused the 100 million EUR agribusiness project approved by European Investment Bank (EIB).

At the meeting of the parliament’s committee for agrarian issues, legislators discussed the Georgia-EIB agreement on funding Georgian agribusiness sector – production, processing, sales chain.

The issue was submitted to the Parliament by Deputy Finance Minister Giorgi Kakauridze.

The agreement was signed in 2016. EIB approved 100 million EUR for funding the project-determined activities.

Despite the efforts by Ministry of Agriculture, commercial banks refused to secure currency risks. As a result, the loan for farmers raised to 8%-9% interest rate. This was unacceptable figure and the Government decided to cancel the loan, Giorgi Kakauridze noted.

According to the reporter’s information, negotiations are underway with the EIB for redirecting the mentioned sum to funding the melioration infrastructure development project.

The sum will be spent on water storage reservoirs:

“the fact is that the agriculture sector is not the field, which may be developed by 8%-9% loans. Regretfully, this is very high interest rate and we should show more solidarity responsibility. In general, we need assistance for the production chain development”, the committee chairman noted.