Private sector investors, including those in energy, welcome the creation of the Economic Development Bank, hoping it will simplify access to financing. According to Giorgi Margebadze, head of the Small and Medium HPP Association, the bank is expected to focus on supporting the energy sector, making loans more affordable for developers.
Currently, the Energy Development Fund provides financing, but its interest rates are higher than commercial banks for certain projects. Margebadze explained that the Fund typically covers part of a project’s cost with a higher interest rate, creating a need for cheaper credit options.
The new bank is expected to offer lower interest rates, especially for projects like hydroelectric and electricity generation, helping investors and the state electricity system meet long-term plans. Margebadze highlighted that rates in Georgia (10–11%) are significantly higher than subsidized rates in neighboring countries like Armenia (6–7%).
The plan, proposed by “Georgian Dream”, is to merge the Georgia Development Fund and “Enterprise Georgia” into a single state-backed development bank. Prime Minister Irakli Kobakhidze noted that while the bank will not be a traditional commercial bank, it will operate with similar functions and provide credit, including for energy projects, similar to the existing Energy Development Fund model.
