According to the Bank’s website, the Project Development Objective (PDO) is to improve the performance and resilience of the Trans-Caspian Transport Corridor in Georgia. The proposed operation supports Georgia's efforts to strengthen its role as a competitive, resilient, and sustainable transit hub along the Trans-Caspian International Transport Route (TCITR), linking Europe and Asia.

The Project combines targeted transport infrastructure investments with institutional strengthening, climate resilience, and sustainability measures. It aims to reduce transit times and logistics costs, improve multimodal reliability, strengthen sector governance, and enhance the economic benefits of transport connectivity, including private investment and employment generation. The Project comprises five components:

Component 1: Improving Rail Freight Performance and Sustainability - Supports the renewal of electric locomotives and implementation of performance-based institutional, operational, and financial reforms in Georgian Railway to improve freight capacity, reliability, and financial sustainability.

Component 2: Road Connectivity Improvements - Finances climate-resilient construction of missing highway links and secondary roads along the East-West and Kakheti corridors, supported by enhanced supervision, road safety measures, and project management capacity.

Component 3: Roads Sector Institutional Strengthening - Strengthens the Roads Department's institutional capacity through digitalization, Intelligent Transport Systems, and integration of climate risk screening, resilience planning, and climate-informed asset management.

Component 4: Economic Empowerment and Analytics for Regional Integration and Road Sector Sustainability - Supports logistics market strengthening, women's economic participation, and analytical work to enable private sector participation and evidence-based transport policy.

Component 5: Contingent Emergency Response Component (CERC) - Provides a mechanism for rapid reallocation of funds to support emergency response and recovery in the event of an eligible crisis.

The rail component emphasizes the deployment of modern electric locomotives, associated infrastructure, and capacity-building measures, with disbursements linked to clearly defined Performance-Based Conditions (PBCs) to ensure that capital investments translate into sustained operational, financial, and governance improvements. The road components embed climate change adaptation and resilience through climate-informed design standards, nature-based solutions, enhanced Road Asset Management Systems, and real-time monitoring and incident management via a National Highway Control Center.

The Project will support over 68km road construction along new alignment. Risks include vegetation clearing, earth works, generation of excess material and construction waste, river pollution, dust, noise, vibration, extraction of natural construction materials, transportation, operation of work camps. Negative impacts may include pollution of air, soil, and water; damage to habitats and disturbance of fauna; slope erosion; damage of chance finds; nuisance to local communities and agro-producers; worksite and road accidents; spread of disease among workers and communities. As large areas in Kakheti are used for agriculture, particularly wine-making and growing grapes, communities within the impact zone may reveal high sensitivity to potential impact of highway construction and operation on the quality of crops grown in plots adjacent to the highway corridor. Highway construction will require removal of forest cover with tangible residual impacts on the landscape. While the highway will improve connectivity and facilitate tourist flow to the Kakheti region, in some locations, residual aesthetic impacts of highway construction may negatively influence visitor experience.

Social risk is substantial due to the scale of land acquisition, as well as economic and physical displacement in the Road component. Project will involve construction of three road sections, which will necessitate land acquisition, impacting over 1,000 households and physically displacing 27 households. Project area includes diverse stakeholders such as micro and small enterprises, agricultural producers, and informal vendors. Effective stakeholder engagement and tailored communication strategies will be critical, especially for vulnerable groups.

Total Project Cost: US$ 729.00 million
IBRD Commitment: US$ 372.00 million

CONTACT POINT - World Bank

Task Team Leader: Saroj Ayush
Title: Senior Transport Specialist
Email: sayush@worldbank.org

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