The U.S. government foreign aid agency, Millennium Challenge Corporation (MCC), is considering an estimated USD 100-150 million for a new grant package for Georgia, according to MCC chief executive Daniel W. Yohannes.

In January MCC board of directors selected Georgia and Ghana eligible to develop proposal for package of grants under its aid program for the second time. The first USD 295.3 million aid program under the MCC was signed between Georgia and the U.S. in September, 2005. An additional USD 100 million was allocated under the program in 2008. The program will be completed this year.

Yohannes told the House Foreign Affairs Committee hearing on March 16, that Georgia and Ghana were selected because of “their continued strong policy performance, their status as important emerging markets, their strategic importance both globally and regionally, and their successful implementation of their first compact.”

The major part of the first MCC aid was allocated for Samtskhe-Javakheti road rehabilitation (USD 209 million); North-South gas pipeline rehabilitation (USD 49.5 million) and various regional infrastructure development projects (USD 57.7 million).

MCC chief executive said that the second aid package would focus on solidifying an economic growth path to attract private investments and eventually to reduce the need for aid.

“New MCC investments with countries that have successfully concluded their first compacts – are expected to target constraints to private investment,” Yohannes said.

Yohannes said that Georgia “is recognized globally as one of the best investment climate reformers, even though 30% of its population still lives on less than USD 2 a day.”

During his visit to the United States in February, Georgia’s Prime Minister Nika Gilauri said he expected new MCC aid package would be from at least USD 150 million to USD 250 million.

He said that Georgia’s package of proposal for funding, which has yet to be drafted, would include establishment of the Institute of Technology in Batumi, as well as rehabilitation of a road via Goderdzi pass, linking Samtskhe-Javakheti region with the Black Sea coast in Adjara Autonomous Republic and construction of, as the PM put it, “an American hospital” in Georgia.