EBRD to pour $975 million into Georgia by 2010

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TBILISI, Oct 23 (Reuters) - The European Bank of Reconstruction and Development (EBRD) will provide Georgia with $975 million in loans and investment between 2008 and 2010, the bank said in a statement on Thursday.

Most of the funds will go toward repairing damage caused by Georgia's war with Russia in August and toward restoring the trust of foreign investors in the country, the bank said.

"In 2009 the volume of investment in the form of loans and acquired shares will grow to $350 million," the statement said.

"Aside from the financial sector, the EBRD will finance the energy and transport sectors. In 2010 we plan to extend around $300 million."

This year, the bank has already provided Georgia with $100 million for the realisation of various projects. By year's end, it will provide another $225 million.

Resource-poor Georgia depends on foreign capital to keep its economy growing. It had enjoyed an investment boom since the election of Mikheil Saakashvili's pro-Western government in 2003.

Private inflows ran at 23 percent of gross domestic product in 2007 as foreigners ploughed capital into construction, tourism, telecoms and transport infrastructure.

The country is also an energy transit hub, hosting a section of the BP-led <BP.L> Baku-Tbilisi-Ceyhan pipeline, which supplies they world with over 1 percent of its oil needs.

In March, the IMF predicted Georgia's economy would grow 9 percent in 2008. But its economic development minister said last month the economy could expand just 5-6 percent this year after 12.4 percent growth in real terms in 2007.

An international conference of donors was held in Brussels on Oct. 20-21 to discuss the amount of financial aid to be allotted to Georgia by the international community.

The conference decided to extend more than $4 billion over the next three years in the form of grants and loans to help with post-war recovery efforts.

(Reporting by Niko Mchedlishvili; Writing by Simon Shuster; editing by Patrick Graham)

Reuters - Thomson Reuters Foundation
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