World Bank: Georgia could boost GDP by up to 4%, create quality jobs through investments in sustainability

The World Bank reported that investing in adaptation, clean energy and climate-smart agriculture could significantly raise productivity, competitiveness and resilience to future shocks and further noted that by 2050 Georgia could increase its GDP by up to 4% and generate quality jobs through smart, sustainability-focused development, enabling stronger resilience and responsible emissions management, the World Bank announced.

“The Country Climate and Development Report (CCDR) for Georgia identifies major economic opportunities in electrified transport, energy efficiency and renewable energy. Currently, 74% of Georgia’s electricity is generated from hydropower, and per-capita emissions are 32% below the EU average. Achieving a more manageable emissions level by 2050 would require an additional $4.4 billion in energy-sector investments beyond the measures included in the National Integrated Energy and Climate Plan. However, these investments could generate $6 billion in system-wide cost savings, reduce import dependence and strengthen energy security”, the report said.

According to the report, expanding and diversifying Georgia’s renewable energy mix to 15 GW would reduce energy-related emissions and imports while increasing employment in the energy sector by 21%. This shift, however, would require significant investment in workforce skills to qualify workers for high-tech jobs.

“Boosting resilience and managing emissions responsibly can help Georgia raise GDP, create quality jobs, ensure long-term economic growth and protect agriculture and infrastructure from future shocks - provided the right policies are in place to support labour mobility and skills development”, World Bank Regional Director Roland Price said.

He further added that investment in renewable energy, modern irrigation, climate-smart agriculture and sustainable infrastructure could generate broad, long-term benefits for the country at relatively moderate cost.

Financing for people- and job-focused smart development could come from the private sector, supported by strong sectoral policies and stable regulation. Strengthening public-private partnerships, improving corporate capacity and raising resilience to climate risks could encourage private capital investment and help unlock high-growth potential. Although Georgia has made progress in sustainable finance, further reforms are needed to attract large-scale investment and enhance financial resilience.

“Georgia’s economy will only become stronger if led by private companies. Renewable energy, clean transport and energy-efficient buildings are not just buzzwords - they are where jobs and opportunities lie. Smart reforms and genuine partnerships make this possible”, Tea Gigiberia, Acting Regional Manager of IFC in the South Caucasus, said.

The report stressed the need for a comprehensive reform package to increase sustainable investments in Georgia. Key measures include supporting the adoption of cleaner technologies, increasing carbon pricing, integrating emissions targets into energy-sector planning, expanding domestic renewable energy sources and electric vehicle markets through competitive pricing, improving energy efficiency and renewable heating in buildings, and investing in sustainable infrastructure. With the right policies and investments, the transition to green energy could foster growth, reduce poverty and enhance resilience to future shocks.

The report further outlined the potential benefits of targeted adaptation measures - such as modernising irrigation systems, providing farmers with drought-resistant seeds and drip-irrigation, and improving road infrastructure - to protect people, livelihoods and the economy from shocks that could increase unemployment, displacement and migration. These measures could generate up to $2 billion in agricultural income, directly benefiting farmers and rural communities.

“Without adaptive strategies, however, environmental risks could reduce agricultural productivity by 30% in rain-fed areas and 60% in irrigated regions, cause annual transport-infrastructure damage of around $95 million, and cut hydropower output by 20%. Under such a scenario, Georgia’s national poverty rate could rise by 0.5% by 2030. In contrast, effective adaptation combined with stronger social protection systems could reduce poverty by 0.6% by 2030”, the report concluded.