€2.5 million loan to finance purchase of new buses

London, United Kingdom – The EBRD is providing the city of Batumi with a €2.5 million loan for the purchase of up to 100 mid-sized buses and maintenance equipment. The acquisition is a key element of a wide-ranging plan to modernise urban transport in the capital of Georgia’s autonomous republic of Adjara.

After years of lack of investment and maintenance public transport is currently seen as one of the biggest problems in the Black Sea city which is a major tourist destination along the Black Sea coast. Batumi has seen significant investments in recent years to develop its tourism potential further.

This makes a modernisation and reform of urban transport even more urgent as the present system, which is dominated by the informal minibus sector, is seen as unreliable and expensive by customers and has resulted in a congested city centre, air pollution and a high accident rate.

Under the new system the Batumis Avtotransporti company, owned by the city, will improve services with the new, increased bus fleet, while complementing route licenses to private minibus operators will be awarded through a transparent tender system. A public service contract between the city and the company will not only outline the rights and obligations of both parties but also define the quantity and quality of services to be provided.

The EBRD’s involvement in the project goes well beyond providing finance. Technical-cooperation funds – provided by donor countries through the EBRD’s Early Transition Countries fund – have been instrumental in the preparation of the modernisation programme. Also the implementation will be supported with assistance from technical-cooperation funds to improve the operational performance and achieve the envisaged health, safety and environmental standards.

Michael Davey, EBRD Director Caucasus, Moldova and Belarus, said the project was an important sign of the Bank’s strong commitment to Georgia. “Municipal infrastructure has been a focus of our activities for some time and this has never been more timely than today.” The Batumi project will build on a similar, successfully implemented project in Tbilisi which demonstrates the EBRD’s rich expertise in the sector, he added.

Robert Chkhaidze, Mayor of Batumi, said “the project is very important for our city. Public transport has suffered from many years of under-investment. The fleet upgrade will enhance passenger comfort, service levels and make public transport more environmentally friendly, while maintaining affordability for the population.”

The EBRD has invested some €400 million in Georgia in recent years in all major sectors of the economy. The country is part of the Early Transition Countries Initiative, launched in April 2004 and including Armenia, Azerbaijan, the Kyrgyz Republic, Moldova, Mongolia, Tajikistan and Uzbekistan. Using a streamlined approach to financing, the initiative is aimed at mobilising more investment, and encouraging economic reform.