Georgia and the United States signed a USD 295.3 million, five-year aid deal in frames of the Millennium Challenge Account (MCA) on September 12, which is designed to help develop Georgia’s infrastructure and reduce poverty in the country. An estimated half-million Georgians are expected to directly benefit from this program. In her remarks, Condoleezza Rice emphasized that as a part of this assistance Georgia will be able to rehabilitate its major gas pipeline system. “Georgia will use some of its MCC funding to rehabilitate a gas pipeline that generates electric power and provides heat to homes and businesses. Reliable access to gas heat will reduce the environmental, health, and safety risk posed by the burning of wood and kerosene in the home – risks that are borne out disproportionately by women and by children,” the U.S. Secretary of State said. The Georgian President announced in February, 2005, that talks were underway with the Russian energy giant Gazprom over the privatization of the main gas pipeline network. The United States called on Georgia to exercise caution when making a final decision. As a result, during the consultations which were held between the Georgian and the U.S. sides to outline MCC assistance priorities, it was decided to allocate USD 49.5 million towards rehabilitating the gas pipeline system. Program Details Regional Infrastructure Rehabilitation and Enterprise Development are two major priorities set forth by the USD 295 million assistance program, with USD 211.7 million and USD 47.5 million respectively being allocated for this purpose. The remaining USD 36 million is envisaged for administrative costs, which include: administration and control (USD 27.6 million) as well as monitoring and evaluation of the entire program (8.4 million). Regional Infrastructure Rehabilitation A major part of the funding - USD 102 million - will be spent towards rehabilitating some 245 kilometers of the main road traversing Georgia’s southern region of Samtskhe-Javakheti. According to the Millennium Challenge Georgia Fund (MCG), which is the U.S. MCC’s Georgian counterpart organization in administering assistance, after the rehabilitation of roads in Samtskhe-Javakheti, travel time from Tbilisi – currently 6.5 hours – will be reduce by almost three hours, which will reduce transportation costs for farmers and for small business owners living along this route. USD 49.5 million will go towards the rehabilitation of Georgia’s gas pipeline system, known as the North-South Gas Pipeline. USD 60 million will fund projects to improve regional and municipal infrastructure for water supply, sanitation, irrigation, municipal gasification, roads and solid waste in regions outside of Tbilisi. Enterprise Development USD 32.5 million is allocated for an independently-managed investment fund to provide long-term risk capital and technical assistance to small and medium enterprises, primarily in the regions outside of Tbilisi, and will identify legal and policy reforms needed to improve the investment environment. |
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