GEORGIA OIL AND GAS CORPORATION: GAS TRANSIT INFRASTRUCTURE CONSTRUCTION, REPLACEMENT AND REHABILITATION. THE DEVELOPMENT OF GEORGIA S ENERGY SECTOR IS OF STRATEGIC IMPORTANCE FOR THE COUNTRY S EMERGENCE AS A STRONG DEMOCRATIC NATION WITH A VIBRANT ECONOMY. DURING GEORGIA S SLIDE INTO POVERTY AFTER THE COLLAPSE OF THE SOVIET UNION, ALMOST NOTHING HURT THE POPULATION MORE THAN THE LOSS OF RELIABLE ENERGY. HOWEVER, VARIOUS MEASURES TAKEN BY THE GOVERNMENT WITH THE ASSISTANCE OF THE DONOR COMMUNITY HAVE BROUGHT IMPORTANT IMPROVEMENTS TO THE SECTOR. USAID ASSISTANCE HAS CONTRIBUTED SIGNIFICANTLY TO ITS RESTRUCTURING; KEY LEGAL AND POLICY REFORMS HAVE BEEN ENACTED; A CRITICAL PART OF THE SECTOR HAS BEEN PRIVATIZED; AND SEVERAL SUCCESSFUL DEMONSTRATION PROJECTS FOR MANAGEMENT REFORMS IN CRITICAL ENERGY INFRASTRUCTURE AND ENERGY EFFICIENCY PROGRAMS HAVE BEEN COMPLETED. THE DIVERSIFICATION OF GEORGIA S GAS IMPORTS AND EFFORTS TO MAKE THE COUNTRY SELF-SUSTAINABLE IN TERMS OF ELECTRICITY SUPPLY HAVE ALSO HAD A STRONG POSITIVE IMPACT. ALTHOUGH MUCH PROGRESS HAS BEEN MADE, GEORGIA'S INFRASTRUCTURE HAS NOT FULLY RECOVERED FROM THE DEVASTATION CAUSED BY THE RAVAGES OF CIVIL WAR, LACK OF REGULAR MAINTENANCE, AND SCANT INVESTMENT IN PHYSICAL INFRASTRUCTURE. NEW VULNERABILITIES HAVE SURFACED AFTER THE 2008 CONFLICT WITH RUSSIA, ESPECIALLY WITH REGARD TO ENERGY PRODUCTION AND TRANSIT. EVEN THOUGH IMPROVED ELECTRICITY AND NATURAL GAS TRANSMISSION ARE ESSENTIAL FOR ECONOMIC GROWTH, THE GOG DOES NOT HAVE THE RESOURCES TO ADDRESS THESE MAJOR PRIORITIES ALONE. THE TASK OF STABILIZING AND REBUILDING GEORGIA IS IMMENSE AND REQUIRES THE SUPPORT OF THE DONOR COMMUNITY, AS NOTABLY HIGHLIGHTED IN THE POST-CONFLICT WORLD BANK JOINT NEEDS ASSESSMENT IN WHICH ENERGY INFRASTRUCTURE DEMANDS FIGURED AMONG THE MOST CRITICAL FOR GEORGIA S RECOVERY AND LONG-TERM ECONOMIC DEVELOPMENT. THE INVOLVEMENT OF USAID IN POWER AND GAS TRANSIT INFRASTRUCTURE FITS SQUARELY WITHIN THE USG S EXPRESSED INTERESTS IN SEEING AN ENERGY-SECURE, STABLE, AND ECONOMICALLY PROSPEROUS GEORGIA. INVESTMENT IN CONSTRUCTION AND REHABILITATION OF GAS AND ELECTRICITY WILL CREATE JOBS, INCREASE SECURITY OF ENERGY SUPPLY, AND FACILITATE ECONOMIC GROWTH, ALL OF WHICH ARE USG ASSISTANCE PRIORITIES. THE PROPOSED ACTIVITY WILL BE IMPLEMENTED FROM 2010 TO 2013 IN COLLABORATION WITH MINISTRY OF ENERGY (MOE), GOGC AND GSE. THESE COMPANIES ARE GOVERNMENT-OWNED ORGANIZATIONS CHARGED WITH THE IMPORT, TRANSIT, AND, IN THE CASE OF GSE, DISPATCH, OF GAS AND POWER THROUGHOUT THE COUNTRY.