Business Insider Georgia conducted an exclusive interview with Alkis Vryenios Drakinos, Regional Director for the Caucasus.

"- How does the EBRD assess the current economic and geopolitical trends in the Caucasus region for 2025?

- The EBRD sees the South Caucasus entering 2025 with moderating but resilient growth, as the post‑2022 boost from intermediated trade and migration flows wanes, while services and connectivity continue to underpin activity. Across the EBRD regions, economies are projected to continue growing well in 2026, amid heightened uncertainty from tariff changes, weaker external demand, and geopolitical tensions.

- What are the main structural challenges affecting the region as a whole, and Georgia in particular?

- The South Caucasus faces a complex set of structural challenges that shape its long-term growth trajectory. Regionally, persistent geopolitical uncertainty and trade fragmentation continue to expose economies to external shocks. Energy dependency remains a critical issue: although renewable potential is significant, integration and storage infrastructure are still underdeveloped, slowing the green transition. Skills and productivity gaps further hinder competitiveness, particularly as global demand shifts toward ICT, logistics, and climate-resilient sectors. Connectivity bottlenecks - especially in transport corridors - limit the region`s ability to fully leverage its strategic position as a transit hub between Europe and Asia. For Georgia, these challenges are compounded by the need to strengthen governance and rule-of-law frameworks to maintain investor confidence. Capital markets, while improving, remain shallow, restricting access to long-term local-currency financing. Accelerating renewable energy deployment and modernizing grid infrastructure are essential for energy security and export ambitions, particularly in light of projects such as the Black Sea Submarine Cable. Human capital alignment is another priority: vocational education and digital skills must scale up to support growth in ICT and green industries. Finally, Georgia`s potential as a logistics and energy hub depends on harmonized standards and infrastructure upgrades to deepen regional integration. According to the EBRD`s latest assessments, addressing these structural issues will be critical to sustaining Georgia`s strong growth momentum and attracting larger-scale private investment.

- In terms of infrastructure and energy integration, where does the EBRD see the greatest opportunities in the region?

- The EBRD identifies infrastructure and energy integration as pivotal drivers of sustainable growth and regional connectivity in the South Caucasus. The most transformative opportunity lies in the development of cross-border energy corridors, particularly the Black Sea Submarine Cable and the associated Green Energy Corridor. This initiative not only strengthens energy security but also positions the region as a strategic supplier of clean energy to Europe, aligning with global decarbonization goals. Beyond interconnection, grid modernization within Georgia and Armenia is critical to integrate variable renewable sources such as hydropower, wind, and solar. Investments in smart grids, storage solutions, and transmission upgrades will enable more reliable and efficient power flows across borders. The EBRD is actively supporting these efforts through financing and technical assistance, ensuring compliance with international environmental and social standards. On the transport side, the Bank sees significant potential in multimodal logistics corridors, including Armenia`s North-South Road Corridor and Georgia`s Black Sea port infrastructure. These projects enhance the region`s role as a transit hub along the Middle Corridor, linking Central Asia to Europe. Upgrading roads, railways, and port facilities, combined with digitalized customs and border systems, will reduce trade costs and improve resilience against geopolitical disruptions. Finally, the EBRD emphasizes synergies between energy and transport investments. For example, integrating renewable-powered charging infrastructure for freight and passenger transport supports both decarbonization and connectivity objectives. By leveraging blended finance and public-private partnerships, these projects can attract large-scale private investment while delivering long-term economic and environmental benefits.

- Which areas of the EBRD portfolio are currently the highest priority in Georgia.

- The annual investments for 2025 will reach to almost €350 million that is 12 projects invested in private sector companies from various sectors of economy. Our investments span a diverse mix of sectors - from financial institutions and manufacturing to energy, transport, and ICT - with a growing share dedicated to green projects. In fact, more than half of our private-sector investments in recent years have supported climate resilience, renewable energy, and energy efficiency initiatives. This approach ensures that our financing not only drives economic growth but also aligns with Georgia`s long-term sustainability goals… Since the start of our operations in Georgia in 1992, the EBRD has invested more than €5.7 billion across over 300 projects, making us one of the largest institutional investors in the country.

- To what extent is Georgia prepared to attract larger-scale private sector investments, and where should reform efforts be focused?

- Georgia boasts strong macroeconomic fundamentals, yet further enhancements to investor-friendly frameworks are essential to attract larger-scale capital flows. Unlocking private investment hinges on robust rule-of-law and governance reforms to reduce perceived risk and strengthen confidence. Equally important is the deepening of capital markets - particularly through the implementation of covered bond frameworks - and the introduction of additional liquidity instruments to support long-term local currency financing. Finally, addressing skills gaps and aligning vocational education and training (VET) with industry needs will be critical to sustaining competitiveness across emerging sectors", - said Alkis Vryenios Drakinos in the interview with Business Insider Georgia.