Page 41 - bne IntelliNews George country report Sept 2017

The connection between the two countries would form part of a larger scheme to unite the Persian Gulf with the Black Sea, which would open new markets for Iranian oil exports. Since the lifting of nuclear-related sanctions in January 2016, Iran has been working closely with the three countries in the South Caucasus to connect its transport infrastructure to them in order to access the Russian and European markets. Tehran has already built a railway connection to Azerbaijan, which was in part financed by Baku.
However, plans for a similar connection with Armenia fell through due to high financing costs - the cost of the project was estimated at over $3bn.
Upon Kvirikashvili's visit to Tehran, the two sides also signed an agreement to cooperate in the energy sector - specifically on Iranian gas sales to Georgia and exchanges of electricity.
Georgia's Partnership Fund (PF) and Israeli aerospace company Elbit Cyclone are building an $85mn plant to produce aircraft parts for Boeing, Airbus and Bombardier planes, agenda.ge reported on March 3.
PF, a $6bn equity fund that is seeking to co-invest in development projects in Georgia in cooperation with foreign investors, was set up by Georgian billionaire and former Prime Minister Bidzina Ivanishvili in 2013. The fund has thus far prioritised investments in real estate, energy and hospitality.
The news report did not mention how the project is to be funded. Construction of the plant, to be located within the Rustaveli international airport grounds in Tbilisi, began in September and will be completed this year, with production expected to begin in 2018. Output will be exported in its entirety.
9.1.3 Agriculture sector news
Favouritism has decimated the number of Georgian companies that rear and sell sheep, an investigation by Studio Monitor, an associate of the Organised Crime and Corruption Reporting Project (OCCRP), revealed on August 16.
Georgia's sheep industry took off a decade ago, when a Georgian farmer brought Turkish and Lebanese investors to Georgia. They became interested in grass-fed sheep that are customarily sacrificed in Muslim communities for the Eid al-Adha holiday.
By 2008, the price paid for one head of sheep went from almost nothing to $60, one of the farmers interviewed for the investigation reported; the price continued to increase, moving up by 50% in 2009. Meanwhile, the number of companies active in this niche increased from two in 2008 to 21 in 2009, while exports shot up from 25,271 sheep worth $1.1mn in 2008 to 266,540 sheep worth $17.1mn in 2009.
But state controls introduced in 2011 decimated the industry to the point where only five exporters remained in 2013, the investigation argued. Out of the four companies that are still active in sheep rearing at the moment, two of them reportedly have connections with a former minister of agriculture, Otar Donelia, who is currently the head of parliament's agriculture committee
41 GEORGIA Country Report September 2017 www.intellinews.com