Vice President, Policy and Partnerships (Executive Committee), European Bank for Reconstruction and Development (EBRD)
A Conversation with Mark Bowman, Vice President for Policy and Partnerships at the EBRD
The European Bank for Reconstruction and Development (EBRD) is supporting the development of greener public transport in Georgia. A sovereign loan of up to €50.6 million will finance the rehabilitation and upgrade of up to 12 metro stations in Tbilisi. The financial package includes an investment grant of up to €5 million from the Green Climate Fund (GCF).
With a population of 1.2 million, Tbilisi was one of the first cities to join the EBRD’s flagship Green Cities programme, which supports members in addressing their environmental challenges through sustainable investments and policy measure...
Transcript (22 segments)
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Narrator0:00
The checkpoint is presented by GM Larva, the first international multinational pharmaceutical company in Georgia. For those who need it most, the European Bank for Reconstruction and Development (EBRD) is supporting the development of greener public transport in Georgia. A sovereign loan of up to 50.6 million euros will finance the rehabilitation and upgrade of up to 12 metro stations in Tbilisi. The financial package includes an investment grant of up to 5 million euros from the Green Climate Fund. With a population of 1.2 million, Tbilisi was one of the first cities to join the EBRD's flagship Green Cities program, which supports members in addressing their environmental challenges through sustainable investments and policy measures. The city was also one of the first to develop a Green City Action Plan. Tbilisi has already made significant progress thanks to its efforts, according to EBRD, including the bus fleet renewal and network restructuring. The new loan builds on this broader effort, part of which seeks to encourage people to shift from private to public transport. The city's transport system is set to benefit from the improved reliability, efficiency, and climate resilience of its metro stations. Better lighting and ventilation and greater energy efficiency of escalators will improve the daily commute of passengers, while an overhaul of the drainage systems is set to make the network more climate resilient. Infrastructural improvements are coupled with a new asset management plan to be financed as part of the project, which are set to boost the public transport company's non-fare revenues while improving service by reducing the overall downtime required for critical maintenance. The EBRD has invested 5 billion euros in Georgia to date through 283 projects, with more than 80 percent of those in the private sector. The bank's key areas of investment in the country include the financial sector, sustainable infrastructure, manufacturing and services, and small and medium-sized enterprises. The EBRD is a multilateral bank that promotes the development of the private sector and entrepreneurial initiative in 36 economies across three continents. The bank is owned by 71 countries as well as the EU and EIB. EBRD investments are aimed at making the economies in its regions competitive, inclusive, well-governed, green, resilient, and integrated. Mark Bowman, Vice President for Policy and Partnerships at the EBRD, visited BMG for a sit-down interview with Georges Academy, which focused on this important decision and also some other broader development issues.
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Interviewer2:52
Mr. Vice President, thank you so much for your time and for being with us, for visiting us, and thank you that you find time during quite a tough schedule you have in Georgia.
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Mark Bowman3:02
Well, thank you very much for inviting me on your program. It's a real pleasure to be here. First time.
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Interviewer3:11
By the way, when we hosted Madam President when she was here in our office, the first question was similar to you about the purpose of this visit. We are in charge of quite high-level meetings with governmental officials and with the private sector. Could you be more specific about the purpose of your visit?
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Mark Bowman3:34
Well, the purpose of my visit here to Georgia is to come here to meet with the government, to understand the current economic situation, the current challenges that the government is facing, and to discuss our cooperation, how we can continue with our cooperation and continue to deepen our cooperation at the same time.
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Interviewer3:56
You're covering regional countries. I mean, you're visiting also Azerbaijan and Armenia together with Georgia, so this week visiting three countries in the region. A real opportunity to visit all three countries, countries that have all been long-standing partners of the bank. And with exactly the same purpose: to understand the current situation, the current challenges, the current economic challenges, and to see how we can continue and deepen our cooperation. Besides some official meetings which we are already aware of, I mean about the signing of a memorandum in regards to the policy subway modernization, metro modernization, which is an important loan for us — about 50.6 million euros as far as I'm aware. Could you be more specific about other details of your meetings with governmental officials, and then I will move to the private sector where you have a lot of partners?
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Mark Bowman4:58
Let me do that, and let me first say a word about that — please, the metro modernization project which we signed today. We're very pleased to sign that project, a 50 million euro loan to help with the rehabilitation, the repair, rehabilitation of 12 metro stations here in Tbilisi. As I'm sure you know, Tbilisi was the first city to join our Green Cities program, and our Green Cities program is a flagship program where we work with city authorities to help them to develop comprehensive plans for the management of their city, for the environmental management of cities. It's been a great success here in Tbilisi. I think we've had eight projects under the program, a number of projects in the transport sector. As residents in Tbilisi will know, there is an imperative to shift people from private transport to public transport, and helping the metro system to develop to provide a more efficient and better service is our objective here, which will bring benefits in terms of reducing pollution and improving the quality of life here in the city.
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Interviewer6:15
During the conversation with the president of EBRD, Madam President also mentioned about the role model of Tbilisi in regards to Green City. Exactly, Tbilisi was the first city to join this flagship program of the EBRD, and it's been extremely successful. As I say, nearly eight to ten projects that we've done, a number in the transport sector, and the experience we have had working here in Tbilisi has been extremely helpful in terms of rolling out the project in other countries of operation. Mr. Bowman, did you get all the necessary feedback, information, statistics, and analysis from your Georgian counterparts, I'm talking about governmental officials, in regards to the information you requested and mentioned that you want to understand more how the Georgian economy is moving forward?
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Mark Bowman7:07
So, exactly, to come back to your earlier questions. One of the things today was signing this project, but more generally, meetings with the government were very productive and intense discussions. Understanding the current economic situation and the current developments in the country. Clearly, the economic situation here, the macroeconomic situation, is I think more positive than people might have expected a year or so ago. But we live in a world of great uncertainty, and the importance of taking advantage of the current situation in order to progress vital reforms, in order to be prepared for the future. Our conversation with the government was both about understanding the current economic situation but also discussing progress with their reform priorities and discussing specific projects where we can continue our collaboration.
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Interviewer8:09
I also want to remember my last interview with EBRD and Madame President in regards to the Investment Council operating in Georgia, which is also a sort of role model. She was telling me that it's maybe the best how the Investment Council is working here. My question to you is the following: tell me about your meetings with the private sector and how did it go?
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Mark Bowman8:35
So, the Investor Council here in Georgia is very successful. We think it's a very successful forum for the private sector to share its views with the government. We have been involved with the Investor Council for a number of years since its creation in 2015, and it's an extremely useful forum for businesses, for the private sector, to put forward their ideas, their suggestions in terms of where improvements can be made to the regulatory framework, to legislation. It's been a successful model in terms of actually delivering concrete reforms which have led to tangible investment. It's a model, as you hinted, that we have also been able to roll out in other countries, but we've been particularly pleased with the progress made with the Investor Council here in Georgia.
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Interviewer9:31
Could you be more specific in regards to EBRD projects in Georgia? I would love to share with our viewers and followers about the ongoing projects and about plans or strategic focus that our strategic partner, the EBRD, might have in the following years and in the current year as well.
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Mark Bowman9:55
Absolutely. The EBRD has been a long-standing partner here in Georgia. We've been active in this country for 30 years. Cumulatively over those 30 years, we've invested 5 billion euros, getting close now to 300 projects. Our focus has been primarily on the private sector — 80% of our investments have been in the private sector. We support small and medium enterprises through working with partner financial institutions, working with local banks, giving them credit lines which they can on-lend to SMEs. We work with the banking sector, we've worked with cities as we were just discussing, and we've also been active in infrastructure investments. Infrastructure investments in roads, a project that we completed recently with the railway company in terms of digitalization of the railway company. So that combination of primarily focusing on the private sector but also working with the government. One of the unique things about the EBRD is our ability to combine investments with policy dialogue, policy advice, and technical assistance, playing our part in terms of helping to contribute to the modernization of the Georgian economy.
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Interviewer11:23
While mentioning infrastructure projects, some ongoing or future involvement of EBRD in Georgia, let's talk about the prospects of the Middle Corridor which is becoming more actual after the disaster happening last approximately one year — I'm talking about the war happening in Ukraine. The role of Georgia and the bank in the development of this transitional transport route. We're discussing some possibilities here, but at the same time, due to some consequences, there are some talks and discussions, let me say, that Georgia should prepare more aggressively to be an active player, as an active government, as an active country itself, in coordinating this Middle Corridor.
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Mark Bowman12:19
It's a very interesting question and an interesting issue. Let me first of all say a word on Ukraine. The EBRD was very clear in its condemnation of Russian aggression, and we've been very active over the last year supporting Ukraine and continuing to invest in Ukraine, continuing to support the economy. But coming back to your question, clearly the Russian aggression has had very significant consequences for a number of other countries and consequences in terms of international trade and international connections. There is always a clear advantage in terms of countries developing new trading links, new corridors, new routes for trade, particularly so because of the Russian aggression in Ukraine. Georgia, because of its geographical position, has enormous potential to play a role in the Middle Corridor, connecting Central Asia to Europe. In order to do that, the requirement to develop infrastructure — whether it be road infrastructure, railway infrastructure, ports — these are all areas where we are very willing to engage and to discuss with the government potential options and to look in detail at the potential for further cooperation.
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Interviewer13:48
While you mentioned the ongoing war in Ukraine, how has the war affected projections of economic growth? Let us discuss not only Georgia but the Caucasus region itself, while you're visiting all three countries — I mean Armenia, Azerbaijan, and Georgia.
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Mark Bowman14:08
It's a very interesting question. Clearly, the Russian aggression in Ukraine has had significant implications for the region, and many of them in different dimensions. In some senses, the economies in the region are perhaps doing better than might have been expected because of the inflows from Russia, because of money that's come from citizens leaving Russia and relocating and establishing businesses in Georgia. But I think one of the issues, if we think more broadly about this question, has been the need for countries to reduce their reliance on Russia and on Russian energy because of the uncertainty of supply if you rely on Russia for your energy supplies. That brings us to a parallel topic. One issue I've been very keen to explore with the government here today is the potential for Georgia to develop as a renewables hub, to significantly develop its renewables potential. It already has significant hydroelectricity here, which means it was one of the key topics. It's a very important topic, a key priority for the bank: helping countries with the energy transition. Given the current circumstances with the war in Ukraine, the case for countries to develop renewable energy, to accelerate the transition to renewable energy, is even stronger than before. Obviously the climate case, but also the economic case and the energy security case. So it makes sense for a country to develop renewable energy in order to produce cleaner, cheaper, and more secure energy.
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Interviewer16:24
If I follow your content and at the same time key priorities as you mentioned, can we consider that EBRD might consider potential involvement in the Black Sea submarine electricity cable project? I'm more than sure that you are very much aware of this project.
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Mark Bowman16:49
I'm very much aware of this project and have been discussing it with various partners today and with the governments. It's certainly a project where we would like to look at the details and we certainly would consider involvement. It's a very ambitious project and technically complex, so there would need to be a lot of work done in terms of looking at the feasibility, looking at the technical details of the project. But the principle of Georgia thinking about how it can expand its own domestic electricity production and become a net exporter of electricity is a principle that we very much support and would be very keen to investigate.
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Interviewer17:35
Thank you so much for your time and for being with us. It was very interesting and informative. Thank you so much.
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Mark Bowman17:42
Thank you very much for having me today. Thank you.
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Narrator17:43
The checkpoint is presented by GM Vara. Serve those who need it most.