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PM Ivanishvili to donate $1 billion USD to Georgian Co-Investment Fund

By Ana Robakidze
Tuesday, October 1
The official presentation of the Georgian Co-Investment Fund (GCF) was held on September 30th.

A private equity fund created on Georgian PM Bidzina Ivanishvili’s initiative, GCF plans to serve as a reliable partner to potential investors in Georgia. The fund has strong support from Georgian and foreign Investors, including the Dhabi Group, RAK Investment Authority, State Oil Fund of the Republic of Azerbaijan, Batumi Industrial Holdings Limited, Calik Holdings A.S, Milestone International Holdings Group Limited, PM Bidzina Ivanishvili, Alexander Mashkevich, and the estate of Badri Patarkatsishvil.

The presentation was attended by the PM, Ministers of Energy and Finances, as well as by members of the Georgian government, representatives of the diplomatic corps accredited to Georgia, international organizations and financial institutions.

The Georgian PM opened the event and presented CEO of the Co-Investment Foundation Giorgi Bachiashvili who later presented the main goals of the foundation and said that the GCF will focus on making investments in the development of energy, tourism, agriculture logistics sectors.

“We are delighted to announce the establishment of Georgian Co-investment Fund and we are ready to start our operations. Over the next five years we plan to invest up to $6 billion in Georgian economy. We raised funds both locally and internationally in order to invest in attractive projects in Georgia. We believe that the Georgian Co-investment Fund will further strengthen investor confidence in Georgia and provide a significant boost to country’s economic growth,” Bachiashvili stated.

PM Ivanishvili announced he will donate $1 billion to the foundation. According to Bachiashvili from 25 to 75% of investments will be made in the projects in energy, tourism and agriculture sectors, also the foundation may present and launch its own projects as well.

Ivanishvili is confident the foundation will help to increase capital in Georgia.

“Along with the co-investors’ fund, we are establishing a venture fund to finance innovative projects. We will found a sovereign foundation based on our partner fund, which will be refined and comprehensible for the investors. The three funds will act as an additional stimulus for the investments to enter Georgia,” PM said.

Ivanishvili said that global projects will be fully supported by the state, especially those related to the transit abilities of the country. PM suggests building a new large port in the country, and it is alleged that a new port will be built in Anaklia and it will operate 24 hours throughout the year.

The government is also going to focus on railway capacities. The PM said that the amount of oil transported through Georgian railways should be increased several times. “We will have 5 million tons next year and after we will have the possibility to increase it to 16 tons,” Ivanishvili said. He is confident that the Georgian railway has the capacity to transport 100 million tons of oil per year.

“We have to send the correct messages to the business sector and promote development of the countries transit capabilities,” Minister of Economy, Nodar Khaduri commented after the presentation. He added that Anaklia port will be a great asset to the country's transit resources and the project is planned to be one of the main priorities of the new foundation.

Expert in economic issues Emzar Jgerenaia, who also attended the presentation, said that building new ports is a very complex and long process, requiring proper planning and calculations. Therefore citizens should not be expecting the project to be launched in nearest future. “This is a project for the long-term,” the expert said.

The official web-page of the GCF says the foundation is “looking to invest in medium and large-sized enterprises (MLEs) in Georgia, which can demonstrate significant growth potential.” Companies interested in getting financing from the GCF should submit a detailed business plan.

The fund intends to hold 25%-75% equity share in investment projects. GCF is expected to retain its ownership interest in the portfolio companies up to seven years extendable to a maximum of nine years. After nine years the fund will exit from its investment projects through sale of its ownership interest to either the exiting co-owners of the project, third parties, or grouping the similar assets in single SPV and selling it via IPO.