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Former economy minister unconvinced on Eurobonds issue

By Messenger Staff
Wednesday, March 12
Announcing the government’s decision in January to issue Eurobonds worth EUR 500 million, Prime Minister Lado Gurgenidze said that part of the money raised will go on the construction of natural gas storage units in Georgia.

Some experts have criticized this plan, pointing out that Georgia does not currently buy enough gas to warrant storage units.

However, Energy Minister Aleksandre Khetaguri has emphasized the long term benefits of a storage depot, reasoning that if gas imports from Azerbaijan’s Shah Deniz field increase, as the Georgian government hopes, gas can be stored during summer when prices are lower and used during winter.

“Constructing a natural gas depot is so vitally and strategically important for the nation that if private companies are not interested in doing it, the government will have to,” the newspaper Ekonomikuri Palitra quoted Khetaguri as saying.

Meanwhile independent MP and former economy minister Lado Papava—a vocal critic of the government’s issue of Eurobonds—said it is still not clear how the money will be spent.

“The prime minister has talked about using the money for energy purposes but when I asked [Finance Minister Nika] Gilauri in parliament why the government needs EUR 500 million I was astonished—he said it would go on the Stable Development and Future Generations funds,” Papava told the Messenger.

The government’s Future Generations and Stable Development funds will be financed by a portion of budget surpluses and privatization proceeds, and will be used for large-scale disasters or rehabilitation projects and economic development purposes, respectively.

“I still do not have a clear understanding of why they need to issue Eurobonds,” added Papava.