Georgian Co-Investment Fund to invest $1.3bn in first batch of projects

25 March, 2014
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The Georgian Co-Investment Fund (“GCF”), a private equity group with $6bn AUM and the mandate to provide international investors access to Georgia, approved its first investments totaling $1.3bn in 11 projects across real estate, energy and agriculture.

Among the investments is the flagship “Panorama Tbilisi” project, whose value exceeds $0.5bn and spread across 270,000m².  It is one of the biggest ever real estate developments in Georgia’s history, which will involve the construction of four new city areas, which will include hotels, serviced apartments, offices, exhibition centres and conference halls, health and leisure centres, sports arenas, swimming pools and all the necessary supporting transport infrastructure, including roads, ropeways, inclined elevators and extensive parking places.

GCF Chief Executive, George Bachiashvili also announced five hydroelectric power plant investments to be built in the South and the North-West of the country, with a combined total investment size of over $750m. The total annual expected energy capacity generation from these sites is in the range of 2,000 GWh.

Further investments were announced in the agriculture sector, with $45m invested in the development of a dairy farm and processing plant in West Georgia, in cooperation with leading Dutch dairy development company The Friesien, which will see production capacity of 50 tons of milk per day. The development of dairy farm and processing plant will enable substitution of 25% of dairy products imports.

The final investment announced by Mr. Bachiashvili will be the development of a 10.4 Ha greenhouse project for the production of tomatoes. The project will be implemented in partnership with a leading French greenhouse company and will enable the substitution of 30% of Georgian tomato imports. The project’s total investment size is $14.3m.

Mr. Bachiashvili said: “This is an exciting day for the Georgian Co-Investment Fund. Since our launch last year we have been working hard reviewing projects and speaking with investors to secure our first investments and we are delighted to announce these today. These projects represent a huge investment in the vital sectors and industries which Georgia needs to develop and will make a significant difference to the lives of the people in this country. We hope to make further project announcements soon.”

More about the investment projects:

Hospitality and Real Estate Projects

The “Panorama Tbilisi” project will unite four multifunctional centers (1. Sololaki Hills, 2. Sololaki Rise, 3. Freedom Square, 4. Erekle II Square) in Tbilisi.

The project will connect city’s central and historic parts to the green suburbs with ropeways and inclined elevators making travelling between the 4 touristic centers of the city convenient even during the busiest times of the day. Furthermore, the passengers of the panoramic glass cabins will have an opportunity to enjoy the gorgeous historic views of the capital.

The project is an unparalleled example of the green architecture in the city as it anticipates the addition of 30,000 planted trees to the city which will significantly improve the city’s eco system.

The project’s additional advantage is that it envisages the development of the parking infrastructure. The total of 1,800 extra underground parking spaces (Freedom Square – 300, Erekle II – 500, Sololaki Hills – 500, Sololaki Rise – 500) will be added to the central and the suburban areas of the city which actually exceeds the project’s needs.

The multifunctional centers will make it possible to organize and host major international conferences in Tbilisi which will grant greater importance and significance to the capital in region.

The total investment size of the project exceeds $0.5bn. The project will add to Tbilisi 270,000 m² of premium space, which includes hotels, serviced apartments, A-class office and commercial areas, exhibition and conference halls, health and leisure centers, sports arenas, pools and all the necessary infrastructure to make it a 24/7 tourist and business destination.

For the “Sololaki Hills”, the concept design is finalized and is being submitted to the relevant authorities for review. As for the other projects, the leading Georgian and Foreign architectural bureaus are being selected in order to finalize design. The process will end in a month and the project will be submitted according to the set rules for review.

In addition, the relevant market research is in underway and the specific decisions regarding the area program will be made according to the market needs for the given period of time. We will see the first openings in approximately 2.5 year.

Energy Projects

“Mtkvari HPP” is a brownfield hydroelectric project located in the South Georgia, Akhaltsikhe Region, on river Mtkvari. Its planned capacity is 53.3 MW with 255.2 GWh of annual energy generation. The project’s total investment size is $100m. The fund has completed all of the necessary due diligence and is currently working on finalizing the terms with the seller;

“Tskhenistskali Cascade of HPPs” will be built in North-West Georgia, in the regions of Lentekhi and Tsageri, on river Tskhenistskali. The total installed capacity of HPPs will be 347 MW and the annual energy generation will equal to 1,744 GWh. The total anticipated investment size of the project is $679m. The prefeasibility study of the project has been done by the Georgian Energy Development Fund (GEDF). GCF is currently working to secure the project rights from the Ministry of Energy of Georgia. 

Agriculture Projects

Dairy farm and processing plant will be developed in the West Georgia in cooperation with the leading Dutch dairy company – “The Friesien”. The dairy farm is intended for 2,000 cows with the production capacity of 50 tons of milk per day. The project envisages creation of state of art milk collection and dairy processing facilities with the processing capacity 100 tons of milk per day. With its scale and quality the project will substitute 25% of dairy products imports to Georgia and create up to 400 permanent jobs. The project’s total investment size is $45m;

10.4 Ha tomato greenhouse will be built in the East Georgia in collaboration with a leading French Greenhouse Company. With the planned annual production capacity of 4,500 tons (by year 2015) the greenhouse will substitute 30% of tomato imports to Georgia and create up to 100 jobs. The project’s total investment size equals to $14.3m.