Turning connectivity into competitiveness: ADB Country Director for Georgia on how infrastructure, energy, and private investment can drive Georgia’s growth

Georgia has strengthened its reputation as one of the region’s most open and business-friendly economies, but sustaining long-term growth will require deeper investment in infrastructure, energy security, and private sector development. Asian Development Bank (ADB) Country Director for Georgia Lesley Bearman Lahm speaks with Investor.ge about the country’s investment outlook and the sectors she believes will drive future competitiveness.

What are the main sectors the Asian Development Bank is currently prioritizing in Georgia?

Our priorities in Georgia are guided by the ADB’s Country Partnership Strategy for 2024–2028, developed through consultations with the Government of Georgia, development partners, the private sector, civil society, and academia. We are focusing on a select group of high-impact sectors where we can deliver the strongest development results. These include continuation of Georgia’s strategic transport infrastructure upgrade and logistics connectivity, clean energy development, and private sector growth. We are also supporting greater value addition in sectors such as agriculture and tourism, while ensuring that development follows a low-carbon and climate-resilient path.

How has the ADB’s strategy in Georgia evolved in response to recent global challenges such as geopolitical tensions, inflation, and supply chain disruptions?

Recent geopolitical tensions, inflationary pressures, and supply chain disruptions have reinforced the importance of resilience. In response, the ADB has strengthened its focus on infrastructure that supports diversified trade routes, particularly along the Middle Corridor. We are also scaling up investments in energy security and renewable energy, deepening support for private sector development, and promoting local capital markets. These efforts help Georgia better withstand external shocks while sustaining growth.

How would you assess Georgia’s current investment climate from the ADB’s perspective, and what are the main constraints holding back higher-quality investment and productivity growth in the country?

Georgia offers a relatively favorable investment environment, with a liberal economic framework, open trade policies, and business-friendly regulations. However, addressing structural challenges—such as access to finance, skills development, and infrastructure gaps—will be important to further enhance competitiveness and attract higher-quality investment.

The key constraints include limited access to finance—particularly outside Tbilisi—skills mismatches in the labor market, and infrastructure gaps that affect productivity. In addition, further development of capital markets and institutional capacity will be important to sustain long-term growth. Addressing these challenges will require continued reforms to improve access to finance, strengthen education and vocational training, and enhance connectivity across regions. Advancing innovation, digitalization, and competition in key sectors will also be critical to boosting productivity and attracting higher-quality investment.

What opportunities do you currently see for both domestic and foreign investors in the near future, particularly in sectors with untapped potential?

There are strong opportunities in transport and logistics infrastructure, renewable energy, and green finance. Investors can also find growing potential in SME financing, trade, and supply chain development. As Georgia strengthens its role as a regional hub, these sectors are expected to expand further. Opportunities are also emerging in areas such as digital services, tourism infrastructure, and climate-resilient investments, supported by ongoing reforms and closer regional integration. Continued improvements in the business environment and connectivity are likely to further enhance Georgia’s attractiveness for both domestic and international investors.

The logistics sector offers significant opportunities, particularly through improved trade facilitation and integration into regional value chains. Renewable energy, including emerging technologies, remains underutilized. There is also strong potential to boost rural and regional economies through targeted investment and better access to finance.

What financial and technical instruments does the ADB use in Georgia to support development, particularly for small and medium-sized enterprises and inclusive growth?

The ADB provides a wide range of financial and technical support. This includes sovereign and private sector financing, investments in green and sustainability bonds, and trade finance guarantees. We also provide technical assistance and policy advice, along with capacity-building initiatives that support SMEs, particularly those led by women and those operating in underserved regions. The ADB’s investments in commercial banks’ affordable, local-currency, green, sustainability, and gender bonds enable access to financing for people in rural areas.

How does the ADB assess Georgia’s role as a regional connectivity and logistics hub between Europe and Asia in practical terms, and what are the key infrastructure bottlenecks that still limit this potential?

Georgia plays a key role in regional connectivity, particularly along the CAREC Corridor 2 and the Middle Corridor linking Central Asia, the South Caucasus, and Europe. Expanding road networks, ports, railways, and border crossings can improve Georgia’s position as an important logistics hub and further boost trade, tourism, jobs, and economic value in the country. ADB’s support for the East-West highway, including projects like the Batumi Bypass Road, reinforces this role by reducing congestion, improving safety, and shortening travel times. In parallel, policy reforms have improved transport efficiency, customs coordination, and cross-border logistics—helping turn infrastructure into real connectivity. As global supply chains seek diversification and resilience, Georgia is well positioned to benefit. Continued investment in integrated, multimodal transport—linking roads, rail, and ports—will be key to unlocking its full potential.

Georgia has made solid progress in modernizing its main highways, including ADB-backed projects. The next phase should prioritize road safety, climate resilience, and maintenance, while upgrading secondary and local roads to better connect regions to jobs, markets, and services.

Closer rail-port integration can reduce transport costs and boost Georgia’s competitiveness along multimodal corridors linking Central Asia and Europe, supported by better coordination across transport infrastructure.

Investments in roads and rail should be complemented by modern logistics infrastructure, digital freight solutions, efficient customs processes, and data-driven management. Advancing customs digitalization and cross-border connectivity, which Georgia is working on through the CAREC program, is a priority too. With coordinated investment and greater private sector engagement, Georgia can strengthen its role as a regional connectivity hub and support more inclusive, resilient growth.

Could you highlight some of the most impactful ADB-supported projects in the country?

The ADB has supported several transformative projects, including the East-West Highway and its Rikoti section, which is central to national connectivity and economic growth. Projects like the Batumi Bypass Road have improved transport efficiency and safety, movement of goods, and regional connectivity.

The Kvesheti-Kobi Road project aims to support regional connectivity by linking the East-West Highway and the North-South Corridor, boosting trade and tourism and enhancing access to more economic opportunities.

We have helped 13 towns in Georgia obtain a 24-hour water supply and modern water and sanitation networks as well as develop municipal services in the regions for the country’s balanced development. 

In the energy sector, we have helped modernize and strengthen the electricity transmission system to make it more efficient and financially sustainable. In 2025, ADB approved a $104 million investment to establish Georgia’s first battery energy storage facility—an important step toward integrating more renewables, improving grid stability, and reducing dependence on neighboring systems for balancing services. This will also help open space for greater private sector participation in clean energy generation.

In the private sector, we supported the first gender bond issuance and acted as an anchor investor in multiple green, sustainable, and sustainability-linked GEL bonds in the region, helping the local capital market grow and develop.

What are the ADB’s long-term strategic goals in Georgia over the next 5–10 years, and what kind of support can Georgia expect going forward?

Over the next decade, our goals are to strengthen Georgia’s role as a regional connectivity hub, accelerate the transition to a low-carbon economy, deepen private sector development, and promote inclusive growth across regions. Supporting integration into global value chains will also remain a priority. In addition, the ADB aims to help Georgia build greater economic resilience by strengthening climate adaptation, improving energy security, and enhancing disaster-resilient infrastructure. Expanding access to finance for small and medium-sized enterprises, including through green and digital finance, will be key to unlocking private sector potential. We will also continue supporting governance reforms, institutional capacity building, and digital transformation to ensure that growth is sustainable, transparent, and benefits all segments of society, including women, youth, and underserved communities.

The ADB will continue to provide strong financial and technical support across key sectors. We expect to deepen our engagement in private sector development, expand green and sustainable finance, and support policy reforms. The scale of our support will depend on reform progress, investment readiness, and opportunities to mobilize private capital in alignment with Georgia’s development priorities. We will place increasing emphasis on knowledge solutions, capacity building, and innovative financing instruments to help the country address emerging challenges such as digital transformation, regional integration, and resilience to extreme weather events. Close collaboration with the government and stakeholders will remain essential to ensure that our support is well-targeted, scalable, and delivers long-term impact.