Page 29 - GEORptNov19
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Ivanishvili company remains largest foreign investor in Georgia in H1
FDI inflow to Georgia drops 54% y/y in Q2
The largest foreign investor in Georgia in the first half of the year was Tourism Development Fund, a company owned by Bidzina Ivanishvili, the billionaire oligarch who is head of ruling party Georgian Dream.
The company’s status was affirmed by statistics provided by Georgia’s statistics office Geostat at the request of BM.ge.
In the first half of 2019, $473mn of FDI entered Georgia, 35% down year on year. Out of this, $36.6mn was contributed by Tourism Development Fund. There are 10 projects in the portfolio of the Tourism Development Fund, with a worth of $717mn.
Tourism Development Fund was established on November 3, 2014. The company's legal address is 39a Chavchavadze Ave., Cartu. Its founder and 100% shareholder is a Panamanian offshore company, Frankston International, owned by ex-Georgian PM Ivanishvili, Georgia’s richest individual.
The full list of the largest investor companies in Georgia also includes MagtiCom Ltd (telecoms), JSC Energo-pro Georgia (energy), JSC RMG Copper (mining), Toyota Caucasus Ltd (automotive), Adjara Energy Ltd 2007 (energy), JSC Georgian Capital (banking) and JSC Nenskra Hydro (energy). Geostat did not disclose the value of individual foreign investors. It only provided a list of the largest 10.
It is important to note that oil company BP was not included on the list, despite it being among the 10 largest investors in recent years due to its pipeline project.
The inflow of foreign direct investment (FDI) into Georgia decreased by 54% y/y to $187mn in the second quarter of 2019, statistics office Geostat has announced. T he main reasons for the FDI decline included the completion of a pipeline project, the transferring of the ownership in some companies from non-resident to resident units and a reduction in liabilities to non-resident direct investors, it said.
In Q1, FDI recorded in Georgia contracted by 12% y/y to $285mn. On the upside, the current account deficit contracted by 48% y/y to $227mn meaning that the FDI fully covered that gap. Q2 current account data is not available, but the trade deficit has narrowed, driven by the weaker local currency.
In broader terms, FDI registered in Georgia contracted last year by 35% but remained strong at 7.5% of GDP.
Referring to the visible decline in inflows of FDI, energy minister Natia Turnava on September 9 argued that foreign investors are still making an important impact on the local economy and added that local investments were presently even more dynamic.
Foreign investors’ portfolios in Georgia include projects in the energy and processing industries that are set to begin operations soon, or have already done so, a fact that will be reflected in next year's FDI statistics, she argued. Turnava also blamed the sluggish advance of the Anaklia deep-sea port project, which was supposed to add to this year’s FDI rate but has been repeatedly delayed.
29 GEORGIA Country Report November 2019 www.intellinews.com
