Commercial News Update for
Georgia
December 2007
Compiled by: Kartlos Gviniashvili, BISNIS Representative,
U.S. Embassy, Tbilisi
TURKS TO MAKE
INVESTMENTS IN HPSs CONSTRUCTION IN AJARA
03.12.2007
Energy Ministry informs that the
government and company AjaraEnergy-2007 will sign by the end of the year the
memorandum, envisaging constructing 7 small and middle HPPs of 119 MW capacity
in total.
As Sarke was told in
AjaraEnergy-2007, the construction will be funded by Turkish investors with
$180 million.
Design works are planned to start
from May 1, 2008, and should be finished within a year. The next stage scopes
to launch construction itself. HPPs will be entered into operation stage by
stage within 3-5 years, the company notes.
In total, the company plans to
construct 16 small and middle HPPs. The issue of other 9 HPPs construction,
being studied currently, expected to be decided next year.
AjaraEnergy-2007 was set up by
Turkish businessmen in Georgia this year.
Source: Sarke Information Agency
TBC-BANK TO ATTRACT
$500M CREDIT RESOURCES NEXT YEAR
03.12.2007
TBC-Bank expects to attract
credits totaled to $500 million for the next year, Mamuka Khazaradze, head of
supervisory board of the bank, declared. He forecasted that expected rise in cost
of world credit, which may be provoked by bad financial results of City Bank
and Merrill Lynch, will not hamper credit inflow in Georgia.
TBC Bank has attracted about $300
million in credits from foreign financial institutions this year. Namely, Deutsche
Bank allotted $54 million, JP Morgan – $47 million, Merrill Lynch – $40
million, Credit Suisse – $35 million, the Netherlands Financial Company for
Development (FMO) – $20 million.
TBC Bank expects to attract more
$50-60 million until the end of year. The bank does not specify funding
sources. However, as it became known to Sarke that $12 million accounts for
European Bank of Reconstruction and Development (EBRD), which will allot the
credit for mortgage funding.
As for TBC Group (TBC Bank and
its subsidiary companies – Georgian Reconstruction and Development Company
(GRDC), TBC Leasing, Georgian Pension and Insurance Holding (GPIH) and others),
the funds, attracted by it, exceeded $500 million in total, Khazaradze said.
According to the National Bank of
Georgia, TBC-Bank total assets made up 1.8 billion lari on November 1,
liabilities – 1.5 billion lari. In terms of the mentioned figures, the bank
ranks the 2nd in Georgian banking sector.
Source: Sarke Information Agency
8TH INTERNATIONAL
EXHIBITION OF AGRICULTURE, FOOD AND DRINK, PACKAGING AND PROCESSING
TECHNOLOGIES LAUNCHED IN TBILISI
05.12.2007
Eighth international exhibition of agriculture,
foodstuffs and drinks, packaging and processing technologies launched today in
Tbilisi exhibition center Expo Georgia. The 3-day exhibition is supported by
Georgian Agricultural Ministry and Tbilisi City Hall.
80 companies from Armenia, Austria, Azerbaijan,
Georgia, Germany, Italy, Russia, Turkey, Ukraine and the US present their
production on 50 showcases.
According to Eka Okropiridze, product engineer of
Dohler Georgia, the daughter company of German Dohler has been operating on the
Georgian market for 3 years. The company supplies complimentary inputs for
non-alcohol and low-alcohol drink and natural juices producing companies –
Coca-Cola Bottlers Georgia, Kazbegi and others.
Russian company Kant has been operating on the
Georgian market for 4 years, importing foodstuffs from various countries,
including Russia. Megi Kutaladze, manager of the company, said that Sweet
Country, the daughter company in Georgia, should be launched in near future,
which will produce sweet pastry.
Source: Sarke Information Agency
TBILISI HOSTS POLISH
INDUSTRIAL EXHIBITION
05.12.2007
Exhibition of Poland’s industry was launched for
the first time in Tbilisi exhibition center Expo Georgia today. The 3-day event
is promoted by Polish Economic and Agriculture Development Ministry, Georgian
Economic Development Ministry and Georgian Embassy in Poland.
More than 30 Polish companies, as well as their
Georgian subsidiaries, took part in the exhibition. The participant companies
represent food industry, tourism, construction, light industry, etc.
Organizers of exhibition expect that the event
will promote and deepen economic cooperation and trade between two countries.
As Polish ambassador to Georgia noted, at this stage Georgian production is
represented on Polish market only through wine.
According to Georgian Statistics Department,
trade turnover with Poland has made up $49.7 million during January-October,
which is 0.98% of total foreign-trade turnover of Georgia. At that, Polish
import accounts for $47 million (1.15% of total import), while Georgian export
– $2.7 million (0.27% of total).
Source: Sarke Information Agency
REALTY REGISTRATION
IS SIMPLIFIED FOR LEGAL ENTITIES
06.12.2007
National Agency of Public Register of the
Georgian Justice Ministry today announced simplification in real estate
registration process for legal entities. Namely, if earlier legal entities had
to present extract from the Enterprise Register of Finance Ministry’s Income
Service in order to implement real estate registration, now the Agency will get
information from Enterprise Register’s electronic database.
Enterprise Register’s database was created with
the support of “Business Climate Reform” project of USAID. The Agency notes
that this is the first precedent of e-government in Georgia.
Source: Sarke Information Agency
NEW CONTAINER
TRANSPORTATION ROUT ILYICHEVSK-POTI LAUNCHED
06.12.2007
Georgian Single Transport Administration informs
that container transportations have been started on Ilyichevsk-Poti rout.
Ukrainian container ship Libra (bale cubic capacity – 303 TEU) has already made
the first trip to Poti recently.
Container vessel will perform the rout presumably
once a week, the Administration says.
The Poti port noted that ferry rout to Ilyichevsk
started in 1996 and presently Ukrainian railway ferryboats Geroi Shipki, Geroi
Plevni and Greifswald trip to Poti port once a week.
However, railway freight increased turnover in
Georgia resulted in necessity to start additional container line, the Poti port
explained.
According to Poti port, port freight turnover
made up 6.7 million t in 2006, which is by 9.1% more than the figures of 2005.
Revenues amounted to 45.4 million lari, growing by 8.8%, while profit made up 9
million lari, or by 25% more.
Source: Sarke Information Agency
JSC TBILISI ELECTRIC
CARRIAGE REPAIR PLANT TO CONSTRUCT NEW PLANT
12.12.2007
JSC Tbilisi Electric Carriage Repair Plant
intends to construct new, modern plant, Mirian Dekanoidze, director general,
told Sarke.
Dekanoidze explained the mentioned decision with
inability of current plant to meet increased demand for the JSC production,
which comes not only from LLC Georgian Railway, but from countries of former
Soviet Union as well. Dekanoidze said that the capacity of the plant is 150-200
freight carriages monthly.
According to Dekanoidze, plant constructions will
need $30-40 million investments and 1.5-2-year period. The plant will employ
about 3,000 people.
At this stage, ongoing works scope investors’
attraction and territory selection for construction. All details, regarding the
plant building, will be defined in the first half of 2008, Dekanoidze added.
At the same time, current plant of JSC Tbilisi
Electric Carriage Repair Plant is being upgraded. The plant intends to start
freight and passenger carriages building from the next year.
Source: Sarke Information Agency
TBILISI TO HOST
PABSEC SUMMIT
10.12.2007
The Parliamentary
Assembly of the Organization of the Black Sea Economic Cooperation (PABSEC)
will hold the 30th Plenary Session of its General Assembly on December 10-12 in
Tbilisi.
Nino Burjanadze, the
acting Georgian president, is expected to make a speech in her capacity as
president of the BSEC Parliamentary Assembly.
Ukrainian Foreign
Minister Arseniy Yatsenyuk will attend the session, along with other officials.
Source: Online Magazine‚CIVIL.GE
FORUM OF GUAM MEMBER
STATES
07.12.2007
On December 7 of the current year at
“Sheraton Metekhi Palace” was held a meeting of “Trade and Transportation
Supporting Project” managing committee of GUAM member states, in which the
representatives of Georgian, Ukrainian,
Azeri and Moldavian Customs and Frontier Departments were participating, also
members of Guam’s secretariat.
The above mentioned project aims at
simplification of customs-frontier procedures and improvement of trade and
economic relations of these countries.
Georgian delegation included the Deputy
Head of the Revenue Service of the Ministry of Finance, Irakli Siradze, also
other representatives of the Revenues Service, Frontier Police and The Ministry
of Foreign Affairs.
The delegations of Ukraine, Azerbaijan
and Moldova have been presided by the Deputy Heads of the Customs
Departments. Among the participants
there were the representatives of the frontier services.
At the meeting the Deputy Head of the
Revenue Service of the Ministry of Finance, Mr. Irakli Siradze did special
presentation regarding the implemented reforms in the Revenue Service.
At the meeting Georgian delegation
stressed the necessity of normalization such issues, as: setting an electronic version of preliminary
notification of cargo transportation across the GUAM states, Collaboration
between customs administration on assessment of the risks and customs control;
exchange the information about customs procedures, movement of cargo and
transport means, provision of information in case of changes in customs
regulations, elaboration of multilateral project on “administrative cooperation
and customs issues” and etc.
After the meeting, the members of
delegation visited Kakheti region, where they would observe the rehabilitation
process of the customs exit-point “Lagodekhi”, being build with financial
support of the US government and also the renewed City of Sighnaghi.
The members of the delegation will be
back in Tbilisi, today. The next meeting of the committee will take place in
2008, perhaps in Moldova.
Source: Ministry of Finance of Georgia
INFORMATION ON THE
RESEARCH CARRIED OUT ON EXPEDIENCY OF CONCLUDING THE AGREEMENT ON FREE TRADE
BETWEEN GEORGIA AND THE EUROPEAN UNION
13.12.2007
Presentation of the research
carried out by the international and Georgian experts on the expediency of
concluding the agreement on free trade between Georgia and the European Union
has been held in Tbilisi Marriot, on December 13.
The major goal of the aforementioned research envisages elaboration of expected
outcomes of trade relations due to the conclusion of the agreement on free
trade between Georgia and the European Union.
Pursuant to the preliminary results of the research report, conclusion of the
agreement between Georgia and the European Union on free trade will facilitate
the increase of Foreign Direct Investments, have a positive impact on all
fields of local production as well as support the increase of purchasing power
and nominal GDP. As for negative effects, conclusion of the aforementioned
agreement may have a slight negative impact on fiscal incomes on the first
stage.
Political consequences deriving from the conclusion of the agreement are of no
less importance. This will be evident positive signal for international
commonwealth, indicating that Georgia is on the way to stable and democratic
development and for the country’s population that the International
commonwealth, including the European Union, support the ongoing reforms in the
country. What is most important stabilization of economic and trade relations
with regional partners will significantly assist Georgia in resolution of
existing conflicts.
Source: Ministry of Economic Development of
Georgia
KFW WILL OPEN A $16M
CREDIT LINE TO BANK REPUBLIC
13.12.2007
German Credit Bank for Reconstruction (KfW) will
open a $16 million credit line to bank Republic. According to Republic, the
bank will receive the loan by the end of this year or at the beginning of the
following year by two equal tranches ($8 million each).
One tranche will be 5-year and will be spent for
small and middle size business funding, while another one will be 10-year, and
is envisaged for mortgage crediting, the bank informs. The bank didn’t disclose
credit interest rates.
As Republic told Sarke, this is the first credit
line directly from KfW. However, the German bank sponsored $4 million loan,
received by Republic from Commerzbank in 2008.
Republic said it receved two credit lines of $20
million each from International Finance Corporation (IFC) and European Bank on
Reconstruction and Development (EBRD). Another credit line of $12 million is
expected to be recevied from EBRD by the end of the year or at the beginning of
the next year.
According to the National Bank of Georgia (NBG),
total assets of bank Republic made up 447.6 million lari by the state of November
1, 2007, while liabilities – 367.7 million lari. In these terms, Republic holds
the fifth place in country’s banking sector. The bank has 36 branches and
service centers all over the country.
Source: Sarke Information Agency
HEIDELBERG CEMENT
GEORGIA TO CONSTRUCT CONCRETE PRODUCING PLANTS IN GEORGIA
13.12.2007
Heidelberg Cement Georgia plans to build concrete
producing plants in Georgia next year, Meinhard Thrul, the regional director of
this Georgian subsidiary of German Heidelberg Cement, told Sarke. At this
stage, selection of plant locations is under way in accordance with the market
demands, he noted.
To construction of one modern concrete plant
costs about $1 million, Thrul said. The produced concrete, being
hard-to-transport, will be envisaged for local market.
Heidelberg Cement Georgia, operating since May
2006, owns 3 cement producing plants (2 in Rustavi and 1 in Kaspi). The company
has invested more than $100 million in Georgia, Thrul noted.
Presently the company produces 1.5 million t of
cement annually, while expects to raise the volume up to 2 million t next year.
Part of production is exported in Azerbaijan and Kazakhstan; however, the
export volume is not specified.
Heidelberg Cement Georgia employs 1,500 people.
Source: National Bank of Georgia
COMMUNICATION
COMMISSION INVITES OPERATORS TO EXPRESS INTEREST FOR RADIO FREQUENCY LICENSES
18.12.2007
Georgian National Commission on Communications
invited operators to express their interest in radio-frequency licenses.
Currently free frequencies may be auctioned in case of interest, Sarke was told
in the Commission.
The matter concerns following frequency bands for
mobile communication: 824.265-827.955 MHz (mobile station) and 869.265-872.995
MHz (base station), 831.645-835.335 MHz (mobile station) and 876.645-880.335
MHz (base station), as well as 1741.6-1744.8 MHz and 1836.6-1839.8 MHz,
1965-1974 MHz and 2155-2164 MHz (TDD – 2015-2020 MHz).
Following frequency bands for local broadband
communication networks of wireless access are free as well: 3473.0-3480.0 MHz
and 3573.0-3580 MHz, 3497.5-3504.5 MHz and 3597.5-3604.5 MHz.
Source: Sarke Information Agency
GEORGIA: SECOND
EAST-WEST HIGHWAY IMPROVEMENT PROJECT (SEWHIP)
18.12.2007
The following project was approved today by the World Bank’s
Board of Executive Directors:
IDA CREDIT: USD$35 million
TERMS: Maturity= 40
years; Grace= 10 years
PROJECT DESCRIPTION: The
project aims to contribute to the gradual reduction of road transport costs and
improve ease of transit along the central part of Georgia's East-West corridor,
through upgrading a segment of the East-West Highway from Tbilisi to Rikoti and
strengthen the capacity of government agencies to develop and implement a
traffic safety program.
Source: The World Bank’s Official Web-site
FDI VOLUME INCREASED
SINCE 2006 BY 58%
24.12.2007
Georgian Statistics Department informs that
volume of foreign direct investment (FDI), attracted in January-September, made
up $1.05 billion. That figure exceeds by 57.7% the same showing of 2006.
The largest investment volume accounts for
Netherlands – about $173.9 million, which is 58 times more than in the same
period of 2006.
The top five includes as well Virgin Islands (UK)
– $121 million (2.37 times more than in the same period 2006), Denmark – $92.4
million (by 8.4% more), Turkey – $89.6 million (by 1.73% less) and the US –
$80.1 million (by 65.8% more).
Next come Kazakhstan with investment volume of
$74.5 million (by 74.8% less than in the same period of 2006). Kazakhstan is
followed by Czech Republic – $72.9 million (4.89 times more), Russia – $55.95
million (3.19 times more), Cyprus – $51.1 million (by 36.4% more) and the UK –
$50.6 million (by 36% less).
As for other countries, Azerbaijan accounts for
$27.7 million (by 47.6% less), Ukraine – $24.2 million (23.46 times more),
France – $22.2 million (by 33.5% more), Norway – $21.9 million (by 59% less),
Italy – $10.8 million (by 71.36% less), Japan – $9.6 million (by 62.16% less).
Source: Sarke Information Agency
MCG AND GEORGIAN OIL
AND GAS CORPORATION SIGNED NEXT AGREEMENT ON MAIN GAS PIPELINE REHABILITATION
25.12.2007
Agreement was signed today between Millennium
Challenge Georgia (MCG) and LLC Georgian Oil and Gas Corporation, according to
which 2nd and 3rd phases of main gas pipeline rehabilitation project will
start. Funding at $25 million is envisaged for the works that will last 25
months.
Rehabilitation of 17 objects will be implemented
in terms of the project, including two sectors of main gas pipeline in
Gardabani district, section in Kazbegi district and 1,000-mm gas pipeline on
Gldanula River.
According to Zurab Janjgava, director of Georgian
Oil and Gas Corporation, rehabilitation works will start next summer. Until
that, all the needed procedures for project implementation will be completed –
tenders will be held, Corporation will get all the necessary permissions for
gas pipeline rehabilitation works, etc.
Budget of MCG project on energy infrastructure
rehabilitation makes up $49.5 million. Out of this sum, $44.5 million is envisaged
for rehabilitation of the damaged sections of North-South main gas pipeline,
while $5 million – for assistance to Georgian Energy Ministry in further
improvement and implementation of energy sector strategy.
Six sections of the pipeline were restored in
terms of 1st phase of the project. Works, cost more than $15 million, were
implemented in 2006-2007.
Source: National Bank of Georgia
PREMIUM ATTRACTED BY
AIG EUROPE GEORGIA INCREASED BY 49% DURING A YEAR
27.12.2007
According to the Financial Monitoring Service of
the National Bank of Georgia, AIG Europe Georgia attracted insurance premium at
1.3 million lari in 9 months, which is by 49% more compared with the same
period 2006. The reinsurance accounts for almost the half of the sum – 729,622
lari.
The company holds 1.5% in local market and is
placed the 8th among 13 Georgian insurance companies. AIG Europe Georgia
represents branch of AIG (American Insurance Group) Europe, registered in
Georgia (spring 2005), engaged in operations in Armenia as well.
AIG Europe Georgia carried out 5 categories of
insurance in January-September. The civil liability insurance accounts for
largest share – 35.1% (451,578 lari), which is by 79% more than in the same
period of 2006.
The next ranks property insurance – 433,890 lari
(33.7%), which is 2.1 times more than in the same period of 2006; financial
risks insurance – 257,701 lari (20%), by 16.5% more; freight insurance – 79,712
lari (6.2%), by 59.4% less; accident and health insurance – 63,033 lari (4.9%),
160 times more.
In 3rd quarter 2007, the company has repaired
damage for the first time – 40,837 lari in civil liability sphere.
Source:
National Bank of Georgia
For more information on Georgia, visit BISNIS online at http://bisnis.doc.gov/bisnis/country/Georgia.cfm
BISNIS (www.bisnis.doc.gov) is part of the U.S. Commercial Service (www.export.gov).