In September 2005, the Millennium Challenge Corporation signed a five-year, $395.3 million compact with the Government of Georgia to improve the two main barriers to economic growth: a lack of reliable infrastructure and the slow development of businesses, particularly agribusiness. The compact projects focus on rehabilitating regional infrastructure and enterprise development to improve the lives of the poor by helping them integrate economically through improved access to jobs and markets, by providing more reliable access to basic services, and by providing capital and technical assistance for enterprise development. The compact in Georgia entered into force (EIF) in April 2006, formally initiating the five-year timeline for project implementation. The compact closed out in April 2011.
In November 2008, MCC and the Government of Georgia signed a compact amendment providing up to $100 million in additional funds available to complete works in the Roads, Regional Infrastructure Development, and Energy Rehabilitation Activities under the original compact.
September 13, 2005
Entry Into Force:
April 8, 2006
April 7, 2011
Enterprise Development Project
- $52,040,800Project Total Amount
This project aims to increase profitable investments in small and medium enterprises (SMEs) and improve the economic performance of agribusinesses. This project consists of the following activities:
- Investment Fund Activity, created a professionally and independently managed investment fund, the Georgia Regional Development Fund, to provide long-term risk capital and technical assistance to agribusiness and tourism SMEs, primarily in the regions outside of Tbilisi, and
- Agribusiness Development Activity, provides technical assistance and grants to farmers and agribusinesses in critical value chains that supply agricultural products to the domestic market or have export capacity.
Projected Long-Term Results
- Estimated Beneficiaries 8,000
- Estimated Net Benefits $76,000,000
Regional Infrastructure Rehabilitation Project
- $314,240,000Project Total Amount
This project aims to rehabilitate key regional infrastructure by improving transportation for regional trade, increasing reliability of energy supply, and improving municipal services in the regions. This project consists of the following activities:
- Samtskhe-Javakheti Road Rehabilitation Activity, to rehabilitate and construct over 220 kilometers of main road traversing the Samtskhe-Javakheti region in southwest Georgia, which will improve access to markets to support economic growth. The Compact amendment has allowed for the full rehabilitiation and construction of the road as originally planned in the Compact, which will fully connect this region to Armenia, Turkey, and central Georgia.
- Energy Rehabilitation Activity, to repair the north-south gas pipeline, the sole transmission line transporting gas to Georgia. In Georgia, natural gas fuels electric power generation and supplies power directly to households and businesses. As a result of the compact amendment, the Government of Georgia will undertake studies required to prepare for the construction of an underground gas storage facility to provide further energy security for Georgia. These studies consist of a full economic, geological and environmental study, technical design and public/private financing plan for the proposed gas storage facility and associated infrastructure.
- Regional Infrastructure Development Activity, to fund the rehabilitation of municipal infrastructure for water supply and waste-water in five cities in Georgia. As a result of the compact amendment, projects in Borjomi, Kutaisi and Kobuleti have received additional funding to expand water services.
Projected Long-Term Results
- Estimated Beneficiaries 125,000
- Estimated Net Benefits $216,000,000