Press Release
Friday, December 12, 2008
OPIC BOARD APPROVES $79 MILLION FOR TWO PROJECTS IN GEORGIA
WASHINGTON, D.C. – The Board of Directors of the Overseas Private Investment Corporation (OPIC) approved $79 million in financing for two projects that will help Georgia begin its recovery by constructing much needed office space in the capital, Tbilsi, and through the provision of long term funding for middle-income mortgages in the country. The projects reflect part of a broader US government commitment to reconstruction in Georgia after the August invasion by Russia,
The board first approved a $39 million loan facility for a corporate loan that will enable the Bank of Georgia to expand its mortgage-lending portfolio to middle-income borrowers. Firebird Management, LLC and Firebird Avrora Advisors, LLC are the U.S. sponsors of the project. The facility is being co-financed with WorldBusiness Capital, a U.S. small business that has partnered with OPIC in several business projects.
OPIC President and CEO Robert Mosbacher, Jr. said the loan facility will help Georgia address the need for a source of long-term funding. Russia’s invasion created political and economic uncertainty. This uncertainty fueled concerns regarding bank liquidity in Georgia’s banking industry that the OPIC loan will help assuage.
“This project will provide relatively uncommon long-term mortgages to middle-income borrowers in Georgia, promoting home ownership and thereby accelerating the country’s recovery from the invasion,” Mosbacher said. “OPIC is extremely pleased to support a project with such important developmental benefits for Georgia.”
Next, the board approved a direct OPIC loan of up to $40 million for construction and operation of a multi-use building complex in Tbilisi’s main street, Rustaveli Avenue, opposite the Georgian parliament in an historic cultural and central business district. The building will offer high-quality office and retail space along with areas devoted to real estate development. GeoStar, Inc. is U.S. sponsor of the project.
The complex will contain the first extended–stay facilities in Georgia, to be operated by Marriott International under a long-term management contract. Moreover, the project will support local museums and the arts in Georgia: project sponsor GMT Real Estate is a founder of the first public-private initiative to create an art district in downtown Tbilisi, and actively engages businesses in strengthening the link between existing museums and artistic, educational and cultural institutions.
“In addition to creating 130 permanent jobs for Georgians, this project will directly address the lack of high-quality office space in Tbilisi, and thereby significantly support the country’s economic recovery,” Mosbacher said.
OPIC was established as an agency of the U.S. government in 1971. It helps U.S. businesses invest overseas, fosters economic development in new and emerging markets, complements the private sector in managing risks associated with foreign direct investment, and supports U.S. foreign policy. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers.
OPIC’s political risk insurance and financing help U.S. businesses of all sizes invest in more than 150 emerging markets and developing nations worldwide. Over the agency’s 35-year history, OPIC has supported $177 billion worth of investments that have helped developing countries to generate over $13 billion in host-government revenues and create over 800,000 host-country jobs. OPIC projects have also generated $71 billion in U.S. exports and supported more than 271,000 American jobs.