The Government of Georgia this week announced the disbursement of its first-ever sovereign loan denominated in the national currency from an international financial institution. The Asian Development Bank (ADB) provided a loan of 68.2 million Georgian GEL(approximately USD 25 million) as part of the Modern Skills for Better Jobs Sector Development Program – Subprogram 2. The loan was approved in late 2024 and ratified by the Parliament of Georgia. It is a policy-based loan intended to support budgetary needs while advancing structural reforms in Georgia’s vocational education system.
This loan marks a significant milestone in Georgia’s partnership with ADB and reflects a growing level of confidence in the country’s macroeconomic management. The Ministry of Finance stated that it is the first time a sovereign loan has been issued in Georgian lari by a multilateral development bank. According to the ministry, the use of local currency aligns with the government’s debt management strategy, which aims to strengthen the resilience of public finances by reducing exposure to exchange rate fluctuations. Borrowing in lari is intended to support long-term debt sustainability and limit vulnerabilities to external economic shocks.
The program financed through this loan is designed to strengthen Georgia’s vocational education and training system. It focuses on improving the quality and relevance of vocational education in sectors that are considered vital to the country’s economic development. In addition, the program supports reforms to increase access to vocational education, particularly in rural areas and underserved communities. It also aims to boost the institutional capacity of the Ministry of Education, Science and Youth, and to promote private sector participation in shaping vocational education curricula.
The strategy includes the development of a new national framework for teacher qualifications and the establishment of a Skills Agency that will coordinate vocational training policy with input from both the public and private sectors
Subprogram 2 builds on the foundation established by Subprogram 1, which was approved in 2020. Under Subprogram 1, the Georgian government implemented several key measures, including streamlining the admission process to vocational colleges, developing a new regulatory framework for adult education, increasing public funding for private vocational institutions, and raising the salaries of vocational education teachers. These reforms were intended to make vocational training more attractive and accessible, while aligning it more closely with labor market needs.
Under Subprogram 2, the government has committed to advancing the Vocational Education and Training Strategy for 2024–2030. The strategy includes the development of a new national framework for teacher qualifications and the establishment of a Skills Agency that will coordinate vocational training policy with input from both the public and private sectors. According to information presented to the Parliament of Georgia, the loan has a term of fifteen years, including a three-year grace period.
The disbursement of the loan confirms the ADB’s support for Georgia’s education reform agenda and underscores the country’s progress in public financial management. Georgian officials, including Finance Minister Lasha Khutsishvili, have described the loan as a sign of international confidence in Georgia’s economic and institutional stability. According to ADB and Georgian government sources, the program also supports Georgia’s broader development commitments, including those made under its association agreement with the European Union.
As of mid-2025, the funds provided under this program are being used to implement policy actions agreed upon with ADB. While detailed impact data are not yet available, the program is viewed by both ADB and the Government of Georgia as a key component of ongoing efforts to improve education outcomes, workforce readiness, and economic inclusion across the country.
By Team GT
