Georgia's Road to a Greener Future

FROM THAILAND TO TBILISI: GEORGIAN ELECTRICITY MARITIME SECTOR BEGINS TO DIGITAL NOMADS COME TO MARKET SURGES TOWARDS MAKE WAVES AS GEORGIA GEORGIA GREEN ENERGY, EU PUSHES OUT TO SEA COMPLIANCE

Investor.geA Magazine Of The American Chamber Of Commerce In Georgia ISSUE 72 FEB.-MAR. 2020

Georgia’s Road to a Greener Future

FEBRUARY-MARCH 2020 Investor.ge | 3 Investor.ge CONTENT 6 Investment News Investor.ge provides a brief update on investments and changes in government policy that could impact the business environment.

10 Georgia’s climate change opportunity

14 EBRD green financing pushing climate change mitigation, energy efficiency

16 GeoGAP – moving towards traceable, safer, 22 sustainable produce in Georgia 20 Georgian electricity market surges forward toward green energy, EU compliance

22 What’s in your bin – a guide to the Georgian recycling sector

28 Innovative housing projects, green loans promoting consumer-driven demand for green building

30 From Thailand to Tbilisi: digital nomads come to 34 Georgia 34 What’s new in the 2019-2020 Georgian ski season

38 Maritime sector making waves as Georgia pushes out to sea

42 Georgia’s capital markets prime for influx of international investment after new rules, regs

46 Interview: the Business Ombudsman as business mirror

48 A look back at 2019 with the Georgian 38 Innovation and Technology Agency 50 American Friends of Georgia celebrates silver jubilee with charity gala

55 NEWS ...... 52

4 | Investor.ge FEBRUARY-MARCH 2020 FEBRUARY-MARCH 2020 Investor.ge | 5 Q3 2019 EMPLOYMENT RATE UP expected to deliver 16 bcm to Europe an- INVESTMENT 4.6% QXDOO\LQWKH¿UVWVWDJHULVLQJWREFP 4.6% more people were employed by 2023 and to 31 bcm by 2026. Georgia in Georgia in Q3 of 2019 in comparison will receive 5% of the transported gas as NEWS to the same period last year, Geostat a share of the transit from Azerbaijan to reports. Georgian businesses employed Turkey, equivalent to about 300 million INVESTOR.GE 696,000 people in the third quarter of cubic meters of gas This volume is pro- 2019, of whom 40.9% were women jected to rise to 1.1 billion cubic meters PROVIDES A and 59.1% men. 41.5% those employed as exports increase. BRIEF UPDATE worked in small businesses, while 36.3% ON INVESTMENTS worked in large businesses and 22.2% in GEORGIA ASSUMES medium-sized businesses. Trade (26%), INTERNATIONAL OLIVE COUNCIL AND CHANGES manufacturing (10%), transportation PRESIDENCY IN GOVERNMENT and storage (8%) and hospitality (6%) Georgia become the 17th member POLICY THAT employed the most amount of people. of the International Olive Council and COULD IMPACT 64% of salaried workers were located assumed a one-year presidency of the in Tbilisi, with 10% in Adjara, 7% in organization. Georgian Olive founder THE BUSINESS Kvemo Kartli, 6% in Imereti and 4% in Giorgi Svanidze will serve as the chair ENVIRONMENT. Samegrelo-Zemo Svaneti. during Georgia’s presidency. Svanidze INFORMATION IN says there is potential for Georgia to TRANS-ANATOLIAN PIPELINE become a “third hub of olives in Europe” THIS ISSUE WAS [TANAP] OFFICIALLY LAUNCHES in the near future. TAKEN FROM The Trans-Anatolian Pipeline con- AGENDA.GE AND necting Azerbaijan’s Shah Deniz gas PARLIAMENT APPROVES 2020 OTHER SOURCES. field to Europe has officially begun BUDGET AT 14.43 BILLION GEL operations. TANAP connects the South ($3.6 BILLION) Caucasus Pipeline with the Trans Adri- Georgia’s state budget for 2020 has atic Pipeline, enabling Azerbaijani gas EHHQ¿QDOL]HGDWELOOLRQ*(/ to reach Italy and Bulgaria and from ELOOLRQ ±DQLQFUHDVHRIPLOOLRQ*(/ there make its way onto other European ($75.79 million). The largest expenses of markets. The construction of the $6.5 bil- the budget include funds for the Ministry lion project began in March 2015, and is RI,QWHUQDOO\'LVSODFHG3HUVRQV/DERU Health, Social Affairs with 4.36 billion *(/ ELOOLRQ ZKLOHWKH0LQLVWU\ RI(GXFDWLRQZLOOKDYHELOOLRQ*(/ ($575 million). The Ministry of Regional Development and Infrastructure has EHHQJLYHQDEXGJHWRIELOOLRQ*(/ ($717 million). An additional 1 billion *(/ PLOOLRQ ZLOOEHVSHQWRQWKH repayment of largely foreign debts.

FDIS AT $417.3 MILLION IN Q3 IN 2019 Foreign direct investments came to $417.3 million in Q3 2019, making for a 13.7% increase compared to the same

6 | Investor.ge FEBRUARY-MARCH 2020 FEBRUARY-MARCH 2020 Investor.ge | 7 the EU in particular were up 13% ($825 defense shrunk 4%, mining and quarry- million), and made for 21.9 percent of LQJZHUHGRZQDQG¿QDQFLDODQG all exports. The increase was partially insurance activities also shrunk 2.2% . thanks to jumps in the export of wines (+13.2%), still and mineral waters GEORGIAN PENSION FUND TAKES (+21.2%), citrus fruits (+44.4%), spices IN 563 MILLION GEL IN 2019 (+24.7%) and other fruits. Overall ex- PLOOLRQ*(/ PLOOLRQ ternal trade amounted to $12.83 billion was accumulated in the pension fund in in 2019. 2019, the Georgian Pension Agency reported. The pension fund includes close GEORGIA, UKRAINE, AZERBAIJAN to one million citizens, and includes the AND MOLDOVA AGREE TO participation of more than 61,000 orga- CREATE UNIFIED ECONOMIC nizations and employing organizations. ZONE, ENHANCE FREE TRADE The pension system is mandatory for Georgia, Ukraine, Azerbaijan and legally employed people under the age of Moldova (GUAM) signed an agreement 40, while those over the age of 40 have LQPLG'HFHPEHUWRµFUHDWHDXQL¿HGHFR- been able to opt out. nomic zone with the goal of reaching a free trade agreement.’ The GUAM coun- GEORGIA BUILDS 800 KM OF period last year. The top three investing tries will focus on developing economic ROADS ACROSS COUNTRY IN countries were the United Kingdom relations, transport, energy, free trade 2019 (18.8%), the Netherlands (16.4%) and DQGWRXULVPLQDGGLWLRQWRRWKHU¿HOGV Georgia constructed or rebuilt four Turkey (10.3%), with major investments times as many kilometers of roads in EHLQJPDGHLQWKH¿QDQFLDOVHFWRU EUROPEAN INVESTMENT BANK 2019 as it did in 2018, redoing 800 km million), manufacturing ($49.3 million) LOANS 65 MILLION EUROS TO worth of roads across the country, the and hospitality ($45.7 million), providing SUPPORT GEORGIAN SMES country’s Road Department reported for 45.7% of all FDIs in Q3 2019. The European Investment Bank plans in early December. 200 projects were to allocate 65 million euros to support completed, including the reconstruction GEORGIAN WINE GENERATES Georgian small and medium-size busi- of 52 bridges. RECORD $220 MILLION IN SALES ness. Per the EU4Business initiative, IN JAN-NOV 2019 Bank of Georgia will receive 50 million VISA SAYS GEORGIA IS LEADER Georgian wine producers sold 86 mil- HXURVZKLOH/LEHUW\%DQNZLOOUHFHLYH IN CONTACTLESS PAYMENTS lion bottles of wine abroad in January- 15 million euros. The EIB hopes to help Visa announced in mid-January that November 2019, generating $220 million stimulate the creation of 7,800 jobs *HRUJLDWDNHV¿UVWSODFHJOREDOO\IRU and making for a 20% increase in rev- through the loan. the percentage of contactless payments enue compared to the same time period taking place in face-to-face transactions, last year, the Ministry of Agriculture GEORGIAN ECONOMY GROWS saying 95% of non-cash payment trans- reported in early December. 5.8% IN Q3 2019 actions through are already being made The Georgian economy posted 5.8 by contactless cards or other devices. GEORGIAN EXPORTS HIT % growth in the third quarter of 2019, HISTORIC HIGH IN 2019 Geostat reports, with nominal GDP DEAL SIGNED TO RECONSTRUCT Georgian exports hit a historic high DPRXQWLQJWRELOOLRQ*(/ FOURTH SECTION OF RIKOTI PASS in 2019, with exports increasing 12.4% billion). Sectors that experienced par- An agreement has been reached be- in comparison to last year and reaching ticular growth were arts, entertainment tween the Roads Department of Georgia $3.77 billion. Further closing the trade and recreation (19.9%), information and and Guizhou Highway Engineering GH¿FLWLPSRUWVZHUHGRZQSHUFHQW communications (18.2%), construction Group and China National Technical amounting to $9.06 billion. Exports to (17.1%), while public administration and Import and Export Corporation for the re-

8 | Investor.ge FEBRUARY-MARCH 2020 construction of a section of the critically 17.7 % more than in December 2018. cars annually, hoping to raise capacity to important Rikoti Pass which connects the 40,000 over time. east and west of Georgia. NUMBER OF INTERNATIONAL The factory currently employs 300 The 14.7-kilometer stretch of the VISITORS TO GEORGIA UP 7.8 people. Shorapani-Argveta section of the high- PERCENT IN 2019 way will be reconstructed with funding 9.35 million people visited Georgia MUNICIPAL DEVELOPMENT FUND provided by the Asian Development in 2019, making for a 7.8% increase in CARRIES OUT 250 PROJECTS IN Bank, which has given a loan of 582 comparison to the year before. Georgian 2019 PLOOLRQ*(/ PLOOLRQ86' IRU National Tourism Administration head The Georgian Municipal Develop- the project. Mariam Kvrivishvili noted that despite ment Fund launched 250 projects in loca- The travel time across Georgia from WKH5XVVLDQÀLJKWEDQ*HRUJLDZDVDEOH tions across Georgia in 2019 of which 70 the Red Bridge on the Georgia - Azerbai- to keep its tourism numbers up. have already been completed. jan border through to Sarpi in the south- Visits especially increased from Backed by a budget 30% larger than west of the country on the Turkish border countries where the GNTA organized ZKDWLWKDGLQRIPLOOLRQ*(/ will be reduced to 4/4.5 hours instead of marketing campaigns, such as Germany PLOOLRQ WKHIXQG¿QDQFHGSURMHFWV the current eight. (38.1%), Poland (32%), France (28%), to improve tourism and water infrastruc- the UK (27.5%) and the Netherlands ture, urban transport and to build sports REMITTANCES UP 14.2% IN (26%). complexes, educational institutions and DECEMBER 2019 homes for internally displaced persons. Transfers from abroad to Georgia in KUTAISI ELECTRIC CAR FACTORY December came out to $172.3 million – a TO RELEASE FIRST VEHICLES IN CAR COMPONENTS FACTORY TO 14.2% year-on-year increase. AUGUST 2020 BE BUILT IN COASTAL POTI More than one-third of all inbound *HRUJLD¶V¿UVWHOHFWULFFDUIDFWRU\ Georgia’s coastal city of Poti will money transfers came from countries of located in the western city of Kutaisi, has soon welcome the automobile industry as the European Union, from where remit- DQQRXQFHGLWZLOOUHOHDVHLWV¿UVWYHKLFOHV well, as the construction of a car compo- tances were up 37.8% at $65 million. in August 2020. nents factory in the city is planned to be Russia accounted for 25% of all The vehicles will be sold abroad in completed as early as September 2020. remittances ($43.8 million), while Italy addition to being available on the local The factory is being built by SDT accounted for 13.8%, Greece for 11%, market. Georgia, which plans to export $5 million the US for 9.6%, Israel for 8.4% and The exact prices and models of the ZRUWKRIJRRGVLQWKH¿UVW\HDUWRWKH(8 Turkey for 4.8%. vehicles will be made public in spring China, the US and Mexico, employing 60 Money transfers out of Georgia 2020. SHRSOHLQWKH¿UVWVWDJHDQGODWHULQFUHDV- amounted to $25.5 million, which was 7KHIDFWRU\ZLOODW¿UVWSURGXFH ing its capcity to 100 employees.

FEBRUARY-MARCH 2020 Investor.ge | 9 Georgia’s climate change opportunity

GEORGE WELTON, EXECUTIVE we highlight changes in the regulations electricity than it should. DIRECTOR OF AMCHAM, GEORGIA of electricity production (p. 20), new According to the World Bank, the financing for sustainable projects (p. country consumes about three times the eorgia has long aspired to be 14), new regulations on recycling and electricity per capita of other countries of at the heart of Europe. As the initiaitves to support sustainable agri- DVLPLODULQFRPHOHYHO7KLVUHÀHFWVKLV- Gnew decade starts, the EU has culture (p. 16). WRULFDOLQHI¿FLHQFLHVDQGUHFHQWJURZWK decided to set ambitious goals on climate has also been driven by bitcoin mining, change. This gives Georgia a great op- HOW WOULD GEORGIA SET which accounts for at least 10-15% of portunity to be a leader in the EU and OUT TO ACHIEVE THE GOAL OF consumption. align with Europe’s sustainability values. CARBON NEUTRALITY? This is an opportunity, because with By pledging to achieve carbon neu- For a start, the country should aim to this level of inefficiency and waste, trality by 2040, or 10 years ahead of the produce enough electricity from renew- quick gains could easily be made. While rest of Europe, Georgia could assume a able sources to cover 100% of its own insulation and solar cells are rarely self- leadership role, demonstrate the busi- FRQVXPSWLRQZLWKLQWKHQH[W¿YH\HDUV financing if done by individuals, the ness case for climate-reform, stimulate Georgia starts at a huge advantage in picture is different if it is done at scale, investment, growth and jobs, increase the achieving this goal. As recently as 2010, ideally by the state. country’s security and create a rallying- the country produced more hydropower Solar City, a company started by Elon point for national renewal. than its entire electricity consumption for Musk, was able to massively expand As this special environmental issue the year. This has dropped to 75% due to home solar use in California by offering of Investor.ge shows, this would also incredibly high demand growth, but still free solar cell installation, charging for line-up with a wide range of initiatives starts in a strong position. the electricity produced but reducing that are already happening. In this issue Georgia also consumes far more electricity bills overall. The Georgian

10 | Investor.ge FEBRUARY-MARCH 2020 state could do something similar with duction could be a huge stimulus for FDI the last few years. However, it is prob- solar cells and insulation cladding. in other sectors. This will be particularly ably still not ideal to be quite so energy- Renewable electricity production important for exports oriented to the EU. dependent on Azerbaijan. would also have to go up. Georgia’s One of the key components of the EU’s Also, around one-third of Georgia’s hydro-production opportunities are well new climate change agenda will be a electricity production comes from the known, but there are also opportunities new carbon tax on imports. With 100% Enguri dam, which is vulnerable as in solar and wind. These have not devel- renewable Georgian electricity, any in- it straddles the boundary of Russian- oped so far, because of the challenges vestor planning to build a factory would occupied Abkhazia. Higher production of grid-management for renewables, be able to say their energy consumption and lower consumption would also make and because the Georgian government was carbon neutral just by plugging into Georgia less vulnerable generally. has been concerned about the cost of a Georgian power supply. Steps towards achieving these goals providing the support needed to make When combined with access to the are already being taken: in the end of these projects viable. Both problems EU afforded by the Deep and Com- 2019, the Georgian parliament passed would be alleviated by efforts to increase prehensive Free Trade Agreement, this groundbreaking legislation with the HI¿FLHQF\DQGWRJURZKRXVHKROGOHYHO FRXOG¿QDOO\VWLPXODWHWKHVLJQL¿FDQW DGRSWLRQRIWKH/DZRQ(QHUJ\DQG:DWHU electricity production, as they would export growth that almost all economists 6XSSO\DQGWKH/DZRQ5HQHZDEOH(Q- require the development of smart-grid say is essential if Georgia is to develop ergy Sources – [read more about changes LQIUDVWUXFWXUH$OVRJUHDWHUHI¿FLHQF\ quickly. to the Georgian electricity market as would mean that electricity prices could Independence in electricity gen- it moves towards compliance with EU actually go up a bit, without overall eration would also be good for security. regulations on p. 20]. household costs increasing. This would *HRUJLDLVQRORQJHUVLJQL¿FDQWO\GH- The next step in achieving carbon make renewable production more attrac- pendent on Russia for gas or electricity, neutrality should be a push to increase tive to investors. largely shifting to Azerbaijan for gas WKHHI¿FLHQF\RIWUDQVSRUWDWLRQZLWKWKH Commitments to green-energy pro- about a decade ago and for electricity in DLPRIIXOOHOHFWUL¿FDWLRQ,QFDUVWKLV is already happening. Tbilisi’s dramatic increase in the use of Priuses results from a 2017 change in the customs code that gave hybrid cars a 60% reduction in import taxes. That same year, imports of hybrid cars went from zero to $84 million, increasing again to $138 million, or a quarter or all car imports, in 2018 and 2019. This is great for the Georgian environment, but also shows that in this price sensitive market, price signals work. If taxes were increased on car imports, Georgia could shift to importing almost entirely hybrid/fully electric cars a decade from now, with the aim at fully electric cars a decade after that. This would, of course, push up electricity consumption and thus the need for more green-energy production, but would reduce carbon output and improve air quality across the country. The other crucial element of low-

FEBRUARY-MARCH 2020 Investor.ge | 11 carbon transport is to get vehicles off the that would reinforce one another. Mu- sources. The risk-sharing involved in roads by providing better public trans- nicipal waste management and recycling encouraging large-scale electricity portation and a strong push to get freight clearly remain big holes in the Georgian production would require subsidies or transport onto trains. This is clearly the ecosystem, but if sustainability was price-guarantees from the government. future anyway. Georgia will never be a part of Georgians vision. They could be 7KLVFDQRQO\EHMXVWL¿HGLIWKHHOHFWULF- transit route for goods to/from China, if pushed forward. A visual overview of the ity produced is being used to support that transit occurs on trucks, since it is recycling sector is on p. 22. local industry that creates jobs in the too slow and too expensive. But, perhaps most interestingly, it country. It would also be crucial to make If Georgia could offer a low-carbon would put Georgia at the forefront of a sure that low value-added activity like tourist experience, it could also stimulate range of key new industries. Bitcoin mining (if allowed at all) should interest from high-end tourists looking We could call these industries ‘Car- not consume subsidized electricity and for a guilt-free holiday. For the most bon Neutral – on the Cheap’. Georgia pay taxes. diligent environmentalist, a voluntary used to be a major import/export country 0RGL¿FDWLRQVWRWKHQDWLRQDOJULG ‘green-tax’ paid at the point of entry for second-hand cars. These weren’t just to make it smarter and more capable of could be used by the government to transit goods, but included considerable GHDOLQJZLWKÀXFWXDWLQJUHQHZDEOHVXS- RIIVHWWKHFDUERQIRRWSULQWRIWKHÀLJKW value-addition, since Georgians would ply, incentives to encourage insulation by planting trees, or increasing conser- often import damaged cars, before re- DQGHQHUJ\HI¿FLHQF\JRYHUQPHQWVXS- vation areas. pairing and exporting them. This took ported solar and a push to hybrid/electric A sustainability agenda would cre- advantage of Georgia’s lower labor car use would also have potentially high ate multiple paths for job creation and FRVWVWR¿[YHKLFOHVWKDWZRXOGEHWRR costs. economic growth. Infrastructure im- maintenance-intensive for the West. However, not only would all of provements, increases in the insulation One could imagine similar opportuni- WKHVHFRVWVJHQHUDWHHFRQRPLFEHQH¿W of houses, installation of solar panels ties in green technology, from renewal of WKH\VKRXOGEHHDV\WRFKHDSO\¿QDQFH and new equipment would all create battery systems for electric cars, to insu- The International Financial Institutions direct short-term economic stimulus [a lation, to solar maintenance. If Georgia (IFIs) are all keen to be heavily involved look at efforts to promote green building could become expert in the development, in renewable energy investment. The concepts in the country can be found on repair and maintenance of second-hand European Investment Bank has recently p. 28]. or low-cost renewable and low-carbon announced a new climate strategy and Increases in FDI towards export-ori- technology, that could be a huge niche (QHUJ\/HQGLQJ3ROLF\ZKLFKSODQVWR ented investment and increases in green market. ‘unlock EUR 1 trillion of climate action tourism would have a more long-term The costs of this strategy would be and sustainable investment in the decade positive impact. considerable, but would mostly take the to 2030’. The EBRD, similarly, plans Energy and sustainability would also form of long-term investments and could to have 40% of its portfolio in green align with broader environmental goals EH¿QDQFHGFKHDSO\IURPLQWHUQDWLRQDO investments, recently introducing its

12 | Investor.ge FEBRUARY-MARCH 2020 $54 million Green Economy Financing Georgian leadership in this area have a disproportionate global impact. Facility in Georgia, of which Investor.ge could also be important because while Perhaps most importantly, this would has written an overview on p. 14. developed countries are often the focus be a project around which Georgia could The World Bank and Asian Develop- of climate change discussion, developing regain its exceptionalism and pride as a ment Bank both have large green funds. countries are key to resolving the climate global leader. Georgia’s self-perception Provided through the government change emergency in the long-term. is not just as a place for hospitality and on a sovereign guarantee, funds for sup- Around 5 billion people, or 70% of the wine, but for unspoiled nature, natural porting climate change adaptation could world’s population live in middle-income produce and pristine water. be secured at very low interest rates countries, compared to only 16% in high- Building on this image to clean- with very long repayment periods. This income countries. It is therefore critically up the country and to cement it in the would allow the government to experi- important that middle-income countries international consciousness as a center ment with different incentive schemes develop strategies to cut emissions in for green rejuvenation would have a to encourage increasingly sustainable ZD\VWKDWEHQH¿WWKHLUSRSXODWLRQV%\ whole host of positive knock-on effects. behavior, in large and small-scale energy taking a leadership role and showing It would create jobs and make people production, in transport, in insulation and how positive these changes can be for richer. But perhaps best of all, it would much more. economic development, Georgia could also make Georgia a nicer place to live.

FEBRUARY-MARCH 2020 Investor.ge | 13 will gain access to environmentally EBRD green financing pushing friendly technologies available in Geor- gia. Investments will be directed towards climate change mitigation, projects that aim to improve energy ef- ¿FLHQF\PLWLJDWHWKHHIIHFWVRIFOLPDWH change, and help small and mid-sized energy efficiency in Georgia businesses, as well as the corporate and housing sectors, adapt to changes THE EUROPEAN BANK FOR RECONSTRUCTION AND DEVELOPMENT by providing them loans through local (EBRD)’S GREEN ECONOMY FINANCING FACILITY WILL COMMIT $54 MILLION TO HELPING FIGHT CLIMATE CHANGE BY ENCOURAGING partner banks. BUSINESSES AND INDIVIDUALS TO TRANSITION TO ENVIRONMENTALLY These funds can be spent on energy- FRIENDLY TECHNOLOGIES IN GEORGIA. efficient building materials, double- glazed windows, thermal insulation, he European Bank for Recon- program also provides free consultation lighting, construction, agricultural struction and Development’s from Green Climate Fund experts. equipment and machinery, photovoltaic Tnew Green Economy Financing So far, the Green Climate Fund has solar panels, geothermal heat pumps and Facility (GEFF) seeks to develop the already supported six EBRD programs, water-saving irrigation systems. green economy in Georgia by expand- investing $830 million and mobilizing LQJJUHHQ¿QDQFLQJLQDFFRUGDQFHZLWK a total of $3.6 billion across the globe. WHAT GREEN FINANCING HAS the EBRD’s Green Economy Transition The total budget of the GEFF pro- DONE FOR GEORGIA ALREADY approach. gram in Georgia is $54 million. The GEFF follows on the heels of the ,QDGGLWLRQWRGLUHFW¿QDQFLQJWKH Through this program, companies EBRD’s Energocredit project, which was

14 | Investor.ge FEBRUARY-MARCH 2020 funded by the European Union (EU) and HQHUJ\HI¿FLHQWWHFKQRORJLHVDOORZWKHP 15 million euros, and is intended for en- the Austrian Federal Ministry of Finance. to save 242,975 MWh of natural gas, and trepreneurs and individuals who seek to Energocredit was carried out as part 4,206 MWh of electricity per year. invest in modern technologies designed RIWKH&DXFDVXV(QHUJ\(I¿FLHQF\3UR- Another example of just how big a to reduce costs, improve quality of life gram, which included the three countries difference implementing greener tech- and protect the environment. of the South Caucasus: Georgia, Azerbai- nologies can make comes from one of 1H[WLQOLQHDUHWKH*HRUJLDQ/HDVLQJ jan and Armenia. the leading cement plants in Georgia, Company and Basis Bank; TBC Bank In Georgia, this project was launched the Georgian Building Group. Their and Bank of Georgia will join later in in 2012 and lasted until 2018. The coun- equipment was rather outdated, and 2020. try was given a $45 million credit line to most of their production costs came from A credit line is available to all inter- launch several green initiatives. Thanks electricity. HVWHG¿QDQFLDOLQVWLWXWLRQV to the project, 31 companies and more To strengthen its position on the than 29,000 households received over market, the company decided to modern- LEGISLATION REMAINS A KEY PLOOLRQHXURVWRIXQGHQHUJ\HI¿FLHQW ize the production process and replace ELEMENT OF SUCCESS projects from six local banks – TBC obsolete equipment. But these projects alone are not Bank, Bank of Georgia, Respublika (now With the help of an Energocredit line, enough: legislation must also be changed TVS Bank), Basisbank, VTB-Georgia the company not only received a $1.5 to reflect innovations in the field of and Credo. million loan, but also recommendations green technologies, says Director of the Recently summing up the results from a group of design engineers on how *HRUJLD(QHUJ\(I¿FLHQF\&HQWHU*LRUJL of the Energocredit project, the EBRD to best equip the enterprise, reducing Abulashvili: recognized six of the best projects in the energy costs by 40%. The company’s “The legislative framework in the ¿HOGRIHQHUJ\HI¿FLHQF\DQGUHQHZDEOH C02 emissions have also been greatly ¿HOGRIHQHUJ\HI¿FLHQF\LQ*HRUJLDLV energy for their contribution in promot- reduced. only now being formed, working off the ing the tenets of green economy in Geor- association agreement with the EU, as gia. Energocredit partner banks were also HOW THE GREEN ECONOMY well as four European directives. Ac- commended for their continued support FINANCING FACILITY DIFFERS cordingly, four laws should be adopted of green energy projects. FROM ENERGOCREDIT on which the development of energy 7KHSUL]HZLQQHUVZHUH/LGHUIRRG The Green Economy Development HI¿FLHQF\ZLOOEHEDVHG´ Museum Hotel, Georgian Building Program was launched on December 7KH¿UVWLQDVHWRIQHZJUHHQELOOV Group, Archi Tower, Shilda hydropower 10, 2019 in Georgia, building off of the establishes requirements for the energy- plant and Innovo Medical Center. old Energocredit structure, undergoing efficiency of buildings. The second Each of these companies has a long a rebranding process and adding new UHODWHVWRHQHUJ\HI¿FLHQF\DFURVVDOO DQGIUXLWIXOKLVWRU\LQWKH¿HOGRIHQHUJ\ selection criteria. VHFWRUVLQFOXGLQJHQHUJ\HI¿FLHQWFRQ- HI¿FLHQF\ While Energocredit aimed to improve struction and building requirements. The Museum Hotel is located in a HQHUJ\HI¿FLHQF\WKHIRFXVRIWKH*()) The third is a bill introducing energy historical building in the center of Tbilisi. ZLOOEHWKHHI¿FLHQWXVHRIUHVRXUFHV HI¿FLHQF\ODEHOLQJDQGDGLUHFWLYHRQ During its reconstruction, the hotel ad- whether in transport, agriculture, hospi- environmentally friendly design will also ministration used an EBRD credit line to tality or other sectors. be introduced. LQWURGXFHHQHUJ\HI¿FLHQWWHFKQRORJLHV The credit line must be utilized within These three bills and the directive The GCF consulting team conducted two years. have already been introduced in parlia- a detailed analysis of the project, studied Many banks will join this project, ment. potential energy savings, determined the WKH¿UVWRIZKLFKLV3UR&UHGLW%DQN “But adopting new laws is only the ¿QDQFLDODQGWHFKQLFDOSDUDPHWHUVDQG which has signed an agreement with the beginning. In addition, a number of made recommendations. The invest- European Bank for Reconstruction and by-laws should also be drafted, accord- ment amounted to $237,000 USD and Development to receive 25 million euros. ing to which incentives will be created, the hotel was able to decrease its energy This amount will be divided into state programs prepared, and standards consumption by almost 90%, as the new WZRWUDQFKHV7KH¿UVWZLOODPRXQWWR determined”, Abulashvili says.

FEBRUARY-MARCH 2020 Investor.ge | 15 eorgian Farmers’ Association we currently produce. But we have certification specialist Ilia RWKHUWKLQJVWRIRFXVRQZH¿UVWKDYH GeoGAP GKunchulia says you shouldn’t to implement a system that will allow always listen to your Georgian grand- us to control quality, traceability and – moving towards mother when it comes to produce and sustainability.” traceable, safer, grocery shopping. GeoGAP, Kunchulia points out, is Despite what she says, organic foods a stepping stone, an interim standards sustainable aren’t widely available in Georiga yet, FHUWL¿FDWLRQSURJUDPWKDWRIIHUVDYHU- QRULVLWHDV\WR¿QGRXWWKHRULJLQRI sion of Global G.A.P. tailored to the produce in Georgia the produce you buy, and whether basic Georgian reality. agricultural safety and sustainability practices were employed in its produc- WHAT ISSUE DOES GEOGAP AIM tion - but all that will soon begin to TO SOLVE? change, Kunchulia says. Head of Star Consulting and food Under a project implemented by safety expert Ekaterine Burkadze says GEOGAP AGRICULTURAL Chemonics International, in 2019 the implementing agricultural standards is STANDARDS AIM Georgian Farmers’ Association launched of crucial importance given that Georgia TO BRING QUALITY, what it hopes will change the way is still working to address the heritage TRACEABILITY farmers farm, shoppers shop and super- of ‘quantity over quality’, left to it by AND SUSTAINABLE markets sell, with the implementation the Soviet Union, and to emerge from AGRICULTURE PRACTICES of GeoGAP: an agricultural produce the period of de-regulation she says the TO FARMS ACROSS THE FHUWL¿FDWLRQVFKHPHWKDWZLOOHQVXUHWKH agriculture sector underwent during the COUNTRY. A STEPPING quality, safety and origin of produce that United National Movement government. STONE TOWARDS THE EU’S makes its way into stores, with an eye “This changed with the signing of GLOBALGAP STANDARD, towards eventually helping farmers make the Deep and Comprehensive Free Trade GEOGAP WILL HELP their way onto the EU market. Agreement (DCFTA), which jumpstarted PREPARE FARMERS MAKE the process of implanting EU legisla- THEIR WAY TOWARDS WHAT CAN GEOGAP OFFER tion, and the National Food Agency was MARKETS ABROAD. GEORGIA? created”, Burkadze says, but points out GeoGAP stands for Georgian Good WKDWWKRXJKWKH¿UVWIHZ\HDUVRIWKLV

JOSEF GASSMANN Agricultural Practices and is based off transition period brought about some Global G.A.P. – an internationally rec- positive changes, legislation concerning ognized, EU retail sector-backed set of food safety and standards remains lax farming and agricultural standards, the and unenforced. main aim of which is to ensure safety Burkadze lists a number of reasons and quality of agricultural produce and behind this problem: to promote sustainable practices among “For one, the process has slowed farmers and retailers. GRZQVLQFHWKHLQLWLDOLQÀX[RIVXSSRUW *HR*$3¿UVWVHUYHVWRSUHSDUHDQG from the EU and donor organizations. accustom farmers and producers to the Now, adopting EU legislation remains LGHDDQGLPSRUWDQFHRIFHUWL¿FDWLRQDQG an issue of ticking boxes, not imple- the practices this entails. mentation. “Maintaining good agricultural “Moreover, quality control and moni- practices is a must if you want to make toring mechanisms in the country are it onto the European market, though for more often used as tool of punishment, now that aim is ambitious for Georgian not support or promotion. State bodies farmers, given the quantities in which often work in a reactive way, engaging

16 | Investor.ge FEBRUARY-MARCH 2020 more often in crisis management activi- WKHUHDUHPDQ\FHUWL¿FDWLRQERGLHVDQG country, farmers will gain much, Kun- ties than in working proactively to ad- the competition brings down the price”, chulia says. dress issues. Another issue: there is a lack Kunchulia says. 2QHWKLQJ*HR*$3FHUWL¿FDWLRQFDQ of laboratories that can properly test for Further taking into account that cer- offer farmers is a proactive, organized a wide array of pesticides, and farmers WL¿FDWLRQKDVWRWDNHSODFHRQFHD\HDU and disciplined approach to farming. ORRNLQJWRJHWLQWHUQDWLRQDOFHUWL¿FDWLRQ Global G.A.P. is prohibitively expensive ³6XFKFHUWL¿FDWLRQVUHTXLUHIDUPHUV have to send their samples abroad. More- for Georgian farmers. to keep documentation, to update it, over, there is no demand from producers 7KHODFNRIFHUWL¿FDWLRQVSHFLDOLVWV to interact with their records. Without for farmers to engage in proper lab test- and bodies is the primary reason that documents, you can’t grow as a farmer ing. The ‘farm to fork’ control system costs are so high, Burkadze says, and – you can’t know for sure what’s work- of the EU remains unconsidered and notes that this will change over time, as ing, what’s not. Without documents, unimplemented”, Burkadze says. VKHDQGRWKHUVSHFLDOLVWVEHFRPHFHUWL¿HG you remain poor, as do your children. Another issue when it comes to mea- to become authorized auditors. Documentation makes you pay attention to the critical aspects of your business and helps you grow”, Kunchulia notes. u7KH86$,'=UGD$FWLYLW\LQ*HRUJLDSDUWQHUHGZLWKWKH %XWWKHUHDUH¿QDQFLDOEHQH¿WVLQLW *HRUJLDQ)DUPHUVs$VVRFLDWLRQWRGHYHORS*HR*$3:HVHHWKH as well. FHUWLILFDWLRQV\VWHPDVDQLPSRUWDQWVWHSIRUZDUGIRU*HRUJLDQ The Georgian Farmers’ Association says there is growing demand from IDUPHUVWRLPSURYHWKHTXDOLW\RIWKHLUSURGXFWVDQGUHDFK consumers for more stringent food safety PRUHOXFUDWLYHPDUNHWVERWKLQ*HRUJLDDQGDEURDG7KLVZLOO standards to be established. Currently, the biggest driver on the PRYHWKHIURQWLHUIRUZDUGLQ*HRUJLDQDJULFXOWXUHDQGKHOS market pushing for such changes is the WKHFRXQWU\DGYDQFHWRZDUGVHOIUHOLDQFHuw0DULND2OVRQ HORECA sector (hotels, restaurant and (FRQRPLF*URZWK2IILFH'LUHFWRU86$,'*HRUJLD cafes), or the catering and hospitality industry. “Hotels want to be able to supply lo- suring and assessing the implementation -XVWKRZGLI¿FXOWLWLVIRU*HRUJLDQ cal food stuffs – not Turkish tomatoes, of agricultural standards in the country IDUPHUVWRJHWFHUWL¿HGDJDLQVW*OREDO but Georgian ones – to their guests who LVWKDWFHUWL¿FDWLRQIRU*OREDO*$3LV G.A.P. can be gleaned from a look at the are eager to sample local produce and prohibitively expensive for local farmers, numbers, Kunchulia points out. cuisine, but they also want to ensure the Kunchulia says. “The Georgian government says quality of what they put on the plate. Consulting services to help a farmer there are 700,000 farmers in the country 7KDW¶VZK\IRUWKHPVXFKFHUWL¿FDWLRQV JHWUHDG\WREHFHUWL¿HGDJDLQVW*OR- – and this number is high, given most of are important, and can be leveraged to balGAP, in addition to the implementa- them are subsistence farmers or similar drive change”, Kunchulia notes. tion costs, can run as high as $5,000 ±EXWDVRIWRGD\WKHUHDUHRQO\¿YHRU To ensure safety and quality, hotels ±7KHQDGGLQWKHFHUWL¿FDWLRQ VL[FHUWL¿HG*OREDO*$3DJULFXOWXUDO and certain emerging consumer segments itself: farmers are responsible for bring- companies in the country.” are willing to pay a premium for safe and LQJLQFHUWL¿FDWLRQVSHFLDOLVWVRQWKHLU However, GeoGAP offers a cost FHUWL¿HGIRRGSURGXFWV7KLVSUHPLXP own dime, which when you factor in friendly alternative, running farmers just in turn can be given to farmers whose tickets, hotels, transport and food can ±*(/IRUERWKFRQVXOWLQJDQG SURGXFH¿WVWKHELOO easily come to $5,000. FHUWL¿FDWLRQVHUYLFHV This is because when relying on “This is far too much for a Georgian the traditional value chain, farmers farmer. In Europe, a farmer can get cer- WHAT DO FARMERS STAND TO lose much of the value of their product WL¿HGLQMXVWWKUHHWRIRXUKRXUV'XWFK GAIN FROM GEOGAP? to numerous intermediaries between IDUPHUVIRUH[DPSOHFDQJHWFHUWL¿HGIRU Should GeoGAP become entrenched themselves and the consumer, but with as little as 600 euros on average because as an in-demand certification in the the help of the Georgian Farmers Dis-

FEBRUARY-MARCH 2020 Investor.ge | 17 Kunchulia says that one solution to this issue could consist of agreements with larger retail supermarket chains to start highlighting the goods of GeoGAP farmers and start offering them to their customers, and in doing so advertise the availability of such products and thus stimulate demand for such goods. A quick look at the Georgian herb and salad market does indeed reveal that there is demand for higher quality products – the largest and arguably the PRVWSRSXODUEUDQGLQWKH¿HOG+HUELD is both Global G.A.P. and GeoGAP certi- ¿HGGHVSLWHWKHIDFWWKDWWKHFRPSDQ\LV largely focussed on the domestic market. “The demand for high-quality products is there, but there aren’t many other companies able to meet the need. There are smaller companies that have started tribution Company (GFDC) – currently the online platform soplidan.ge, which to follow in our footsteps, and we hope WKHODUJHVWEX\HURI*HR*$3FHUWL¿HG offers front door delivery service of these companies will continue to grow. goods, and which delivers straight to agricultural produce. We welcome healthy competition: it’s the kitchens of the HORECA sector – necessary for the growth of the industry”, farmers can cut out the middleman and GETTING GEORGIAN FARMERS Herbia Manager Davit Janelidze says. receive a premium for their GeoGAP ON BOARD The gradual rise in demand for such FHUWL¿HGSURGXFH Uptake of GeoGAP standards has products, Kunchulia says, will hopefully Because there’s an app for that. been slow, but the Georgian Farmers’ As- spread to other agricultural products “Our application Agronavti allows VRFLDWLRQKDVLGHQWL¿HGVRPHRIWKHPDLQ with time. farmers to upload information about issues, and says that with time it hopes The GFDC’s Japaridze agrees: “De- their produce, and it immediately makes WKHLPSRUWDQFHRIVXFKFHUWL¿FDWLRQVZLOO mand for quality products has been rising its way into our system where we can make an impression upon farmers. steadily over the past few years – likely act on it. One issue GeoGAP faces is that the due to both increased consumer aware- “Cooperating with us, farmers gain SUHPLXPIDUPHUVUHFHLYHIRUFHUWL¿FDWLRQ ness and increased tourism and thus access to a stable market that is growing is still not quite high enough to perk up higher demands on quality.” on a monthly basis. Moreover, we pay for ears: However, this matter is one that goes WKHLUSURGXFHYLD¿QDQFLDOLQVWLWXWLRQV “This is partially because despite a beyond demand – it’s a matter of corpo- and not by cash. *HR*$3FHUWL¿HGIDUPHU¶VH[WUDZRUN rate responsibility as well: “This in turn means they create a pa- their competitors can drastically undercut “In the EU, Global G.A.P. standards per trail, and thus open up the possibility them as they face no problem in selling came about when supermarkets banded of receiving low-interest loans to further their produce because of lax regulatory together demanding higher quality their business”, GFDC Deputy Director enforcement. produce from their farmers across the Shako Japaridze told Investor.ge. ³0HDQZKLOH*HR*$3FHUWL¿HGIDUP- board, as they agreed not to compete The GFDC supplies 20 high-end HUVIRUWKHWLPHEHLQJFDQRQO\¿QG on certain baseline safety and quality hotels and restaurants with produce and an outlet with the GFDC, with a few requirements. The same has to happen in plans to expand in both Tbilisi and other H[FHSWLRQV´*)$FHUWL¿FDWLRQVSHFLDOLVW Georgia before we start seeing results”, regions, in addition to cooperating with Kunchulia says. Kunchulia notes.

18 | Investor.ge FEBRUARY-MARCH 2020 FEBRUARY-MARCH 2020 Investor.ge | 19 Georgian electricity market surges toward green energy, EU compliance

A RECENT PACKAGE opment of an independent, competi- country if the legislation is not …. WLYHDQGOLTXLGHQHUJ\PDUNHWDQG harmonized with the EU’s.” OF LAWS PASSED the second sets the national target *HRUJLDVSHFLÀFDOO\ZDQWVWRDW- BY THE GEORGIAN for renewable energy at 35 percent tract investors from the EU because of PARLIAMENT WILL SEE THE RI WRWDO ÀQDO FRQVXPSWLRQ E\ “their experience and knowledge of which will largely address Georgia’s very high-level development technol- ESTABLISHMENT OF AN reliance on natural gas to provide for ogies.” However, direct investment, ENERGY EXCHANGE AND its heating needs, given the country as opposed to international agency LVPRVWO\VHOIVXIÀFLHQWZKHQLWFRPHV money, from Europe has been “lower SERIOUS COMMITMENTS to electricity generation thanks to its than investment from other countries, TO GREEN ENERGY hydro-power plants. for example China.” PRODUCTION. The aim of the Third Energy Pack- He also raised the electricity tran- age is to “open gas and electricity sit opportunities Georgia may see markets in the EU”. These are to be arise, through Turkey to Eastern and SALLY WHITE IROORZHGE\ODZVVHWWLQJHQHUJ\HIÀ- Western Europe if Georgia meets EU ciency targets, encouraging energy criteria. Georgia already serves as heaper electricity, greener savings, tightening regulations on D WUDQVLW FRXQWU\ IRU HOHFWULFLW\ ÁRZ- energy, cuts to pollution, in- HQHUJ\HIÀFLHQWEXLOGLQJVDQGPDQ- ing between Azerbaijan, Russia and Ccentives for investors, boosts dating energy consumption labelling Armenia, but here green energy for exports and last but by no means on consumer electronics. compliance is not demanded. least serious points in the eyes of While progress has been far from the European Union – all this comes TOWARDS COMPLIANCE WITH EU easy, Georgia has been on a “on a with the government’s new electric- ENERGY LEGISLATION ÀUPSDWKWRZDUGVFORVHUWLHVZLWKWKH ity market program, much of which These laws should help Georgia EU international energy market” for - VHHNV WR IXOÀOO UHTXLUHPHQWV IRU (XUR PRYHWRZDUGVIXOÀOOLQJLWVREOLJDWLRQV some years now, Janez Kopac, direc- pean Union accession. before the EU as taken on in signing tor of the EU’s Energy Community Sec- Key to Georgia’s move to green the Deep and Comprehensive Free retariat acknowledged back in 2018. energy, as 2020 begins the Ministry of Trade Agreement. That was just a few months after the Economy and Sustainable Devel- As far as EU membership is con- Georgia’s parliament ratified the opment has announced a new en- cerned, the position was set out very accession agreement to the Energy ergy exchange, a new energy head, clearly by the Georgian president of Community and its laws – the so- new players and new regulations. the EU’s Energy Community Regula- FDOOHG ´DFTXLV FRPPXQDXWDLUHµ In a December 2019 report head- tory Board (ECRB) Giorgi Pangani, This is a legally binding agreement lined “Georgia leapfrogs from out- who emphasized at a recent press to adopt core EU energy legislation dated energy market framework to conference, “There is no chance of and was seen by Kopac to “clearly Third Energy Package”, the EU Energy becoming an EU member until you show the country’s pro-European Community applauded the Georgian KDYH IXOÀOOHG DOO WKH FULWHULD RI WKH orientation”. Parliament’s adoption of the Law on Energy Community; this is something Energy and Water Supply and the that cannot be avoided.” BOLSTERING MARKET RESILIENCE Law on Renewable Energy Sources. He added: “Believe me that no Georgia’s electricity generation is 7KHÀUVWODZZLOOODXQFKWKHGHYHO- European investor will look at the dependent on hydroelectricity.

20 | Investor.ge FEBRUARY-MARCH 2020 Statistics that show the impor- Consumer demand for electricity next year, “they will be able to see all tance of securing investment and is rising as householders increase their the proposals for electricity trading,” donor backing to expand electricity use of electronic appliances though she added. generation come from the OECD’s consumption is weather-driven. Once electricity transmission and International Energy Agency: up to Last year it rose by less than ex- distribution activities are separated 70-90 percent of Georgia’s electricity pected and at a lower rate than in and carried out in a freer market generation comes from hydroelectric previous years, Energo-Georgia and by independent companies and power which is dependent on rain Telasi showing a combined rise of 1.6 not banded together as now, she and snow. SHUFHQW LQ WKH ÀUVW PRQWKV *DOW expects more providers to appear However, Georgia is reliant on & Taggart said that demand from and momentum will pick. The con- imported gas from its neighbors and FU\SWRPLQHUV ÁXFWXDWHV DQG ZKLOH VXPHUZRXOGWKHQEHDEOHWREHQHÀW occasionally needs to import electric- Georgian industry has become more from increased competition among ity, which in turn creates an energy energy efficient, it is growing with providers, she said. A decision had security risk. tourist numbers soaring and overall to be taken, however, “to move to *HRVWDW ÀJXUHV VKRZ WKDW LQ WKH demand is expected to continue to a competitive market at once, or ÀUVWPRQWKVRIODVW\HDUEHFDXVH ULVH DW DURXQG ÀYH SHUFHQW D \HDU step-by-step.” of lower rainfall, hydroelectric plants according to the Ministry of the generated 9.2 percent less energy Economy, while the Georgian regula- SURGING FORWARD than in 2018, bringing an 11 percent tor says electricity generation growth More electricity supply is on the ULVH LQ LPSRUWV 1RWDEO\ IRU WKH ÀUVW is an annual 3.9 percent. way, with 150 power plant projects time ever, electricity was imported in To manage the electricity industry at various stages of development July and August, months when WKRXJKQRWDOOZLOOEHÀQLVKHG Georgia generally exports it says Galt & Taggart). Georgia’s DQG WKH GHÀFLW LQ WRWDO LV 7KH86JRYHUQPHQWsVH[SRUWSURPRWLRQ 10-year Development Plan of expected to reach a record. the Transmission Network for 7RÀOOWKDWGRPHVWLFJHQHUD- ZLQJKDVVSRWWHGRWKHUtJUHHQHQHUJ\u 2020-30 aims to make the most tion gap, according to research EXVLQHVVRSSRUWXQLWLHVLQ*HRUJLDIRU of its transit and export oppor- by brokers Galt & Taggart, tunities and lists 21 hydropower Georgia’s thermal power plants LQWHUQDWLRQDOFRPSDQLHVDQGLQYHVWRUV,WV plants due to be connected to generated 29 percent more the grid. electricity last year. This factor, ZHEVLWHVWDWHVt*HRUJLDGRHVQRWFXUUHQWO\ Even some of this, says Galt plus imports – both of which SURGXFHSRZHUJHQHUDWLRQDQGWUDQVPLVVLRQ & Taggart, would enable Geor- are more expensive than the gia to become a net exporter. tariff for existing hydropower HTXLSPHQWg0RVWHTXLSPHQWZDVSURGXFHG The international institutions plants – meant that the country LQWKH6RYLHWHUDSULPDULO\LQPRGHUQGD\ continue to explore the building consumed more, higher-priced of more hydroelectric plants, electricity. 5XVVLD7KHFXUUHQWHIIRUWVRIWKH*HRUJLDQ and the European Bank for The consumer suffers, Reconstruction and Develop- George Ramishvili, founder of JRYHUQPHQWVKRXOGFUHDWHGHPDQGIRU ment has just launched its $54 Silk Road Group and investor HTXLSPHQWDQGRSSRUWXQLWLHVIRUH[SRUWHUVu million Green Economy Financ- in Guria’s Bakhvi hydroelectric ing Facility. plant, told journalists last sum- The increase in transparency mer. A disadvantage of being a net more efficiently, work on the new in Georgia’s electricity market result- energy importer, he says, is that “for Georgian Energy Exchange has ing from the move to open energy the average Georgian citizen, do- started, and its head announced as trading on the exchange and EU mestic energy is relatively expensive Irina Milorava, formerly chairman of compliances will, it is hoped by the for the region.” the energy and water regulator. Ministry of the Economy and Sustain- He added that with its “legacy The wave of reforms has encour- able Development, attract a rise in hydroelectric plants producing only aged 15 major users of electricity foreign investment hydro, wind and intermittently”, Georgia needs more to buy directly from the wholesale solar power generation. investment. Money was not going to market, “which means they need to It has organized a major interna- pour into green energy without policy ÀQG DQ DGHTXDWH WUDGLQJ SODWIRUP tional Green Energy week-long invest- and regulatory support. However, he WRWUDGHHOHFWULFLW\YHU\TXLFNO\DQG ment conference in Tbilisi for Jan 2020, thought the transition being made in correctly,” she says. with just about all the main players in Georgian energy was not only in line There are already 10 companies Georgia’s private, public and donor with EU policies (which is why Silk Road registered as power traders (although sectors working on electricity on tap has invested in hydro since 2011) but only three are active in the wholesale to discuss the future of hydropower added up “to a package that inspires market, according to Galt & Taggart). growth in Georgia and government EXVLQHVVFRQÀGHQFHµ When the exchange starts trading incentives.

FEBRUARY-MARCH 2020 Investor.ge | 21

Clean World | Founded: 2017 | Employs: 5 Field: Sorted waste collector and supplier

Clean World says one of the biggest problems it faces is that companies and organizations pay cleaning fees only based on the square footage of their premises. When it comes to throwing out waste, organisations thus have no incentive to pay attention to what they throw out, or even to consider recycling, since their waste is covered by their monthly cleaning fee.

One way to incentivize proper waste management on the organizational level, Clean World points out, would be to implement a system by which companies pay by weight, in which case:

“Companies would start counting money. They would look at how much they’re throwing out, and figure out ways to reduce costs. This would have a positive effect on the entire value chain, and decrease the amount of waste that ends up at the garbage dump. This would have a positive effect on government expenses as well, reducing government spending on waste management by at least 15% on land fills.”

Kere | Founded: 2018 | Employs: 35 | Field: Glass recycling Capacity: 2,000 tons of glass per month | Produces: Multipurpose glass

Kere says that in addition to a lack of experience in the separation process, the Geor- gian recycling sector is lagging behind technologically.

“For example, we need a more powerful shredder, an investment that needs about 250,000 EUR, which would dramatically strengthen the capacity of the enterprise by about 35-40%. But we need funding and state support to acquire such machinery.”

Kere also says that increased public awareness of the importance of segregated waste collection, and the introduction of certain tax exemptions for recycling companies, would help push the sector forward.

Zugo | Founded: 2010 | Employs: 50 | Recycles: 10 tons of poly- ethylene waste per month | Produces: Biodegradable and compostable bags

Amongst the challenges Zugo faces is the issue of competition in waste collection from the black market.

“This problem is likely caused by a lack of proper regulations, and it may be that agencies responsible for regulating such issues are not properly carrying out monitoring activities”, Zugo says.

Zugo is currently the only producer of biodegradable and compostable bags in the South Caucasus.

TRC says the private sector in Georgia has yet to cultivate importance of investing in the circular economy.

“There are a number of reasons for this. There is a lack of proper implementation of the legislation, and the legislation is itself faulty at times. For example, when the Waste Management Code went into force and tire dumping and burial and burning were banned, there was still no tire processing plant in the country. The ministry knew about this, and yet it could not fine violators, because there was no proper approach. This in turn had a negative effect on the sector, increasing an indifferent attitude towards these issues, and increased the skepticism of society towards the importance of recycling in general.” EcoGetPet | Founded: 2015 | Employs: 5 | Recycles: 20-25 tons of PET plastic bottles per month | Capacity: 350 tons per month

EcoGeoPet began as a collection company that exported raw plastic waste, and only later moved into the processing sector, and will soon begin producing wrapping tape from its recycled materials.

The company says there is currently an issue with a lack of public waste and separation bins which are not available in the streets, which means that most plastic bottle waste ends up in landfills. Another issue it faces is the public’s over-reliance on state waste management services to take care of and separate waste.

“Each of us needs to learn that if we are to live in a healthy environment, to work in a team spirit that requires the active involvement of each of us. We hope people’s attitude towards waste will change. With our business, we try to show that a used bottle is not waste, it is a resource for future use.”

Sanitary | Founded: 1999 | Employs: 131 | Field: Toxic and hazardous waste management, soil remediation, other | Recycles: 110 tons of waste per month

Sanitary Executive Director Levan Kvirkvelia says one of the biggest issues for the company is that supervisory and monitoring activity in the field of hazardous waste is not systematic and strong enough to properly ensure that companies abide by their responsibilities when it comes to disposing of waste.

“When a blind eye is turned to this matter, it creates problems for the sector as it limits the flow of waste material. The state should pay closer attention to monitoring the issue. However, when it comes to the private sector itself, we are seeing that businesses are slowly waking up and realizing that not only is it a matter of the law, but it is also their responsibility to deal properly with their waste. In the past few years we have more and more companies signing contracts with us. That’s a sign that there is some momentum in the country.”

GeoMulch Founded: 2014 Employs: 20 Field: Recycling wood and forest waste Recycles: 900 m3 of wood waste per month Produces: 300-400 m3 of organic mulch

GeoMulch PR Manager Ana Tskhadadze says sourcing waste is a problem for the company. Sometimes the company collects wood waste on its own, but this is an expensive process. Meanwhile, the majority of wood waste simply ends up in landfills, which can then not be accessed because it is government property.

“We lose this wood entirely, it’s just sitting there, of no use to anybody. We’re in the process of making agreements with Tbilisi City Hall and several other municipalities to acquire this wood before it ends up at the landfill, but this needs time.”

Another issue the company faces is a lack of awareness about mulch as a product, Tskhadadze says, noting many are dismis- sive of mulch’s beneficial effects on the environment and the beautifying effect it can have on a landscape.

“Mulch is about much more than just appearances – it can help combat air pollution and global warming. It reduces dust pollution, and mulching green areas improves the sustainability and health of plants, which helps them deal with carbon dioxide.”

FEBRUARY-MARCH 2020 Investor.ge | 27 euros, 16.1% of which (54 million euros) Innovative housing projects, consists of green loans – 84% of the bank’s green portfolio is in energy efficiency loans, however the bank is working to green loans promoting diversify its green portfolio and include renewable energy technologies and other consumer-driven demand environmental investments. The bank plans to have 20% of its portfolio consist of green loans in the coming years. for green building ,QSDUWLFXODUWKHEDQNSODQVWRÀQDQFH solar micro-power plants: cooperating LIKA JORJOLIANI to build to a high EE/Green standard, who with importers of solar panels, the bank will in turn be rewarded with positive mar- has already developed several options Georgia is gradually moving towards ket differentiation”, a description of the for small and medium-sized businesses the introduction of green standards in project on buildup.eu reads. and individual customers, most of which the country’s construction and residen- The project will be carried out by the can be payed off within six-seven years. tial building development industry as *HRUJLDQ (QHUJ\ (IÀFLHQF\ &HQWUH DQG To set an example, in March 2020 the consumer demand for eco-friendly living will address what has been a historic bank plans to launch a solar power station spaces rise and the country strives to meet pattern for homebuilders and buyers in RQWKHURRIRILWVKHDGRIÀFH (8HQHUJ\HIÀFLHQF\REOLJDWLRQV the country not to invest enough in the To support this move, both domestic design, construction or selection process, LISI GREEN TOWN and international financial institutions One of the first examples of green are increasingly making green loans and building to appear in Georgia was Lisi JUHHQÀQDQFLQJDSDUWRIWKHLURIIHULQJV *UHHQEXLOGLQJLVWKHSUDFWLFH Green Town, a residential complex by Lisi While environmentally-friendly con- Development, which is sprawled out over struction practices are only just beginning RIFRQVWUXFWLQJDQGRSHUDWLQJ 355 hectares around Lisi Lake in Tbilisi. The to catch on, the country already has sev- EXLOGLQJVDFFRUGLQJWRVWDQGDUGV project began back in 2011 and intro- eral examples of large-scale, successful duced an innovative principle to green developments that abide by green build- WKDWGHFUHDVHWKHOHYHORIQRQ building in Georgia, using only 20 percent ing principles, such as Lisi Development’s of the territory for residential areas, and iconic Lisi Green Town in Tbilisi. UHQHZDEOHHQHUJ\FRQVXPSWLRQ the remaining 80 percent for recreational To encourage the consideration and DQGFDUERQRXWSXWLQDGGLWLRQ zones and other infrastructure. value placed on energy efficiency in “Using green building concepts, we residential buildings, the Georgian parlia- WRXVLQJHQYLURQPHQWDOO\ constructed low buildings, despite the fact ment is currently examining a bill which that they cost more than standard build- will oblige apartment sellers and renters UHVSRQVLEOHDQGUHVRXUFH ings or than building a simple complex in WR FRQGXFW DQ HQHUJ\ HIÀFLHQF\ DXGLW HIILFLHQWSURFHVVHVWKURXJKRXW the city center. However, we have chosen DQGUHFHLYHDFHUWLÀFDWHZKLFKZLOOKDYH this approach, and today this is what sets to be provided to buyers or lessees. This WKHVWUXFWXUHsVOLIHF\FOH us apart. A clean and green-friendly green obligation will likely be introduced at the environment is the lifestyle that we want to end of 2022, but will only affect buildings instead choosing to avoid taking out larger promote in Georgia,” says Nodar Adeish- constructed after the bill comes into force. bank loans and save on initial costs, which vili, Director General of Lisi Development. The European Union is supporting a later costs consumers more due to higher At the moment, more than 100,000 number of green building initiatives and utilities bills. VTXDUHPHWHUVRIKRXVLQJDQGLQIUDVWUXF- projects in the country as well. Lending institutions have reason to get WXUHKDYHDOUHDG\EHHQEXLOWHQHUJ\HIÀ- With the help of newly secured Horizon on board as well: studies show that the risk cient materials were used during construc- 2020 EU funding, the SMARTER Finance of default on mortgages on ‘green homes’ tion which will allow home owners to save for Families program is now expanding to is up to 30% lower, as annual energy sav- up to 30% on energy costs. The company Georgia, the prime objective of which is to LQJVFDQEHHTXDOWRRQHRUWZRDQQXDO employed modern construction technol- LQWURGXFH¶LQQRYDWLYHÀQDQFLQJIRUHQHUJ\ PRUWJDJH SD\PHQWV (QHUJ\ HIÀFLHQF\ ogy, as well as the recommendations of efficiency investments’, and to create expert at ProCredit Bank Levan Khmia- foreign experts. Rain collectors installed FLWL]HQGULYHQGHPDQGIRUJUHHQÀQDQFH dashvili says green loans should become in the town allow for the collection of rain “[The program will] demonstrate the a priority banking product. water for irrigation purposes. EHQHÀWVRIVKLIWLQJVSHQGLQJDWWLWXGHVWR- “Eco-loans that help protect the envi- Electric car charging stations are in- wards a ‘total cost of monthly-ownership’ ronment also affect our image. We posi- stalled on the territory of the complex to view of the cost of [a] home purchase or tion ourselves as a green bank. Even the motivate residents to purchase electric new construction or renovation project... EXLOGLQJRIRXUKHDGRIÀFHZDVEXLOWLQDF- vehicles. In addition, several residential while citizen-driven demand will help con- cordance with green building principles.” XQLWV KDYH DOUHDG\ EHHQ HTXLSSHG ZLWK vince residential investors and developers The bank’s loan portfolio is 339 million solar panels.

28 | Investor.ge FEBRUARY-MARCH 2020 FEBRUARY-MARCH 2020 Investor.ge | 29 important part of world travel trends in From Thailand to Tbilisi: the coming years. 7KHQRPDGQDWLRQKDVYHU\ÀH[LEOH digital nomads come to Georgia borders, though, and over the past few years, Georgia has quietly become a ANDREW WESTON BRAUN RQOLQHMREVWRYLVLWZDUP$VLDQDQG/DWLQ new hotspot, largely thanks to improving American nations like Thailand, Indo- infrastructure, liberal visa policies (95 et’s face it – Georgia isn’t the nesia, Vietnam, Colombia or Mexico. cou ntries get one year visa-free on entry, easiest country in the world to Chiang Mai, Thailand, has even gained a with no limit on re-entries), the low cost /¿QGRQDPDS reputation as the “digital nomad capital.” RIOLYLQJDQGPRUHURXWHVEHLQJÀRZQ But a growing number of digital The growing nomad population by budget-friendly airlines. nomads can surprisingly point it out, makes this title an increasingly sig- Innovative initiatives like Work- and that’s not just because they’re good nificant one: MBO Partners , a firm FromGeorgia are also helping put at geography: Georgia and Tbilisi are specializing in connecting independent Georgia on the nomad map, creating an becoming almost instantly-recognizable consultants with major enterprises, esti- environment that is not only welcoming names in nomad circles, and many hope mates that there are currently 4.8 million to visitors but conducive to creating this will have a positive effect on the workers that describe themselves as digi- deeper ties, and nomads themselves are Georgian economy via direct spending, WDOQRPDGVDQG1RPDG/LVWIRXQGHU3L- stepping up, starting businesses and even international connections, publicity, and HWHU/HYHOVSUHGLFWV SHUKDSVVRPHZKDW bringing a major nomad event, Nomad entrepreneurship. optimistically) that there will be a billion Summit, to Tbilisi in May 2020. On the surface, Georgia doesn’t look digital nomads by 2035. The U.S remote like a stereotypical nomad spot, and until workforce has grown by 140% since NOMAD TRENDS recently it’s been relatively unknown. 2005, with 27 companies now operating What makes a city or country a good Many location-independent workers fully remote, and the trends are pointing nomad destination? A small survey of WHQGWRWDNHDGYDQWDJHRIWKHLUÀH[LEOH towards digital nomads becoming an Tbilisi nomads says good internet, easy

30 | Investor.ge FEBRUARY-MARCH 2020 visa policies, access to other countries Nomads (the most popular group) has from mostly yellow “Okay” ratings to ORZFRVWÀLJKWVWKHORZFRVWRIOLY- 34,000, Digital Nomads Medellin has green “Good/Great” ratings for internet ing, safety, mild climate and interesting 7,000, and Mexico City Digital Nomads and fun, and, somewhat surprisingly, culture are some of the most important has around 1,200. Tbilisi’s community going from “good” to “great” for cost. aspects, and most nomad blogs will tell hasn’t hit the same scale as the major 1RPDG/LVWDOVRPHQWLRQVWKHHDVHRI you the same. nomad destinations yet, but it’s grow- doing business in Georgia as a mark in Georgia checks most of these boxes, ing fast. its favor, and while not every nomad is though it lacks the tropical climate that Chiang Mai is actually the second- a business owner/entrepreneur, there is a tends to dominate nomad Instagram most-common city of residence for the lot of interest in Georgian tax residency feeds and has historically been a bit of Facebook group’s members (after Tbili- and business registration. As of Janu- a hike to get to. It’s still relatively mild, si), which indicates a connection between ary 2020, Georgia sits at #7 overall on though, and low-cost airlines have also the two communities and may portend an the Ease-of-Doing-Business Index, and been opening up routes to Europe and eventual shift in nomad numbers. while it can’t quite compete with the on- Asia as tourist interest increases, which As Thailand’s visa policies become line services and EU access offered by a could give Georgia an advantage as a stricter and air quality continues to dete- country like Estonia with its e-residency convenient base between nomad destina- riorate, Georgia’s comparative advantage SURJUDP*HRUJLDLVGH¿QLWHO\PDNLQJDQ tions in Eurasia. in both of those categories is pushing it effort to become a favorable place to start Google Trends shows that searches high up the list of nomad destinations. and sustain a business. for terms like “digital nomad Tbilisi” Tbilisi has also been outperforming and “digital nomad Georgia” have been RQWKHLQÀXHQWLDOQRPDGFLW\UDQNLQJ WORKFROMGEORGIA: on a steady uptick since around 2017, VLWH1RPDG/LVWLQ7KH1RPDG WELCOMING NOMADS DORQJZLWKDQLQFUHDVHLQKLJKSUR¿OH /LVWDOJRULWKPZKLFKVFRUHVFLWLHVEDVHG Nomads don’t need an invitation to blog mentions. on a multitude of factors drawn from dif- come check a place out, but if they get Perhaps the most salient metric for ferent data sources, has put Tbilisi in the one they probably won’t turn it down. the growing Tbilisi/Georgia nomad com- top 10 several times (topping out at #4 A site that lets local spaces offer munity, though, is the Tbilisi Digital No- in January 2020). Time series data isn’t GHVNVLQWKHLURI¿FHWRGLJLWDOQRPDGV mad Facebook group, which got its start directly available, but based on Archive. certainly sounds like an invitation, and in June 2019 and hit over 900 members org snapshots from past years, it seems WorkFromGeorgia hopes that nomads by January 2020. 7ELOLVLKDVLPSURYHGRQ1RPDG/LVW¶V will take it as one. For reference, Chiang Mai Digital most important metrics since 2016, going The idea was originally conceived DW%HWWHUÀ\''%²DFUHDWLYHDJHQF\LQ 7ELOLVL²DQGKDVSURYHGVRSRSXODUZLWK nomads and locals alike that the project now has 30 workspaces available across Georgia, bookable via an AirbBnB-like interface. Initially, says Irina Ghughunishvili, one of the project’s founders, WorkFrom- Georgia’s main aim was to attract digital nomads to help compensate for the drop LQ5XVVLDQWRXULVPDIWHUWKHÀLJKWEDQ in July 2019, but she sees a lot of other SRWHQWLDOEHQH¿WVLQ7ELOLVLEHFRPLQJD new nomad hub. Nomads tend to stay longer and spend more money, but it’s not just their direct contributions to the economy that she thinks are valuable. New coworking/coliving space on the block - Lokal Tbilisi. Photo: Jennifer Rice

FEBRUARY-MARCH 2020 Investor.ge | 31 “They’re working professionals; Nomads Facebook group, Treft saw the a lot to raise awareness about the perks they’ve travelled the world,” she says. potential for growth and created her co- Georgia has to offer nomads. “With easy “They’re interested in a lot of different working/coliving space with the goal of 1 year visas , great infrastructure and industries, and even the exchange of giving nomads a way to settle in Tbilisi welcoming people, Tbilisi is prime to be ideas on the professional level would be and quickly connect with the local and the next digital nomad hotspot,” he says. EHQH¿FLDOIRU*HRUJLD´ nomad community. The Nomad Summit will bring 200 digi- That’s why the founders of Work- “I think there’s potential for both tal nomads from around the world, and )URP*HRUJLDDUHVSHFL¿FDOO\KRSLQJWR positive and negative impacts,” she really put it on the map, just like we have connect nomads with locals and cultivate says. “A lot of it depends on the mindset with Chiang Mai, Thailand in the past.” international relationships. RIWKHGLJLWDOQRPDGVFRPLQJLQ,¿QG “Everyone wants to really understand that in a lot of communities the digital GEORGIA: NOMAD NATION? and learn more and be engaged in local nomad culture is very insular… That’s Digital nomads in Tbilisi will likely communities,” Ghughunishvili says. the thing that I’d personally really like never have the same direct impact that “You can hang out with digital nomads WRFKDQJH²WKDWPLQGVHW´ millions of yearly tourists can bring, but and other travelers and it’s great, but why /LNHWKH:RUN)URP*HRUJLDWHDP the fact that Georgia is in a position to be \RXDUHJRLQJWRWKHFRXQWU\¿UVWRIDOOLV though, Treft believes that there are a a hub for this new global workforce is an because you want to know how people lot of opportunities for digital nomads to RSSRUWXQLW\WKDWFDQ¶WEHRYHUORRNHG² actually live in that country.” Not only have a positive impact by supporting lo- and it’s certainly on the right track so far. can the project help make nomads more cal businesses and giving them conduits As Treft says, “Georgia is a really good involved, but the novelty of the experi- to larger professional networks. “That’s example of how the local community ence can make for excellent social media one of my goals long-term,” she says, “to is trying to welcome the digital nomad EX]]²VRPHWKLQJQRPDGVWHQGWREHYHU\ be able to interact with that local digital community.” good at generating. community and connect them with the Unique innovations like WorkFrom- WorkFromGeorgia is currently being right resources internationally.” Georgia are a fantastic example of how UXQE\%HWWHUÀ\DVDFRUSRUDWHVRFLDO Coming from even further outside a country might be able to capitalize on responsibility project, but are looking Tbilisi is Nomad Summit 2020, a major some of the best traits that nomad have for growth opportunities, as they believe nomad conference slated to be held at to offer: a wide range of digital skills, that they could become a valuable part of Fabrika from May 22-24. Most Nomad international connections, and a passion Georgia’s digital nomad strategy. Summit events are held in Chiang Mai for exploring and building. (the nomad capital, if you’ll recall), and, Of course, since Georgia’s competi- NOMAD INITIATIVES WKRXJKLW¶VDOVREHHQWR/DV9HJDVDQG tion is literally every other country/city/ /RNDO7ELOLVLLVDQRWKHUSURMHFWLQ- Cancun, Johnny FD, who has organized state in the world, many of which already tent on building a positive relationship the event since 2015, sees Tbilisi as KDYHDKLJKHUSUR¿OHDQGVRPHRIZKLFK between Georgia and the digital nomad potentially being the next Chiang Mai. OLNH(VWRQLD/LWKXDQLD6HUELD0DOD\- community, though this one is coming “The only thing Tbilisi is currently lack- sia, Vermont, and Oklahoma City) have from the nomad side. The coworking/ ing to really be a world class base for already launched programs targeting coliving space was started by Candy digital nomads and location independent nomads, there’s no guarantee how easy 7UHIW²DGLJLWDOQRPDGIURP$PHULFD entrepreneurs is a community,” he says. it will be for Georgia’s charm to continue who came to Tbilisi for a month and “That’s why we’re bringing ours with us to captivate nomads in the long term. The HQGHGXSH[WHQGLQJKHUVWD\LQGH¿QLWHO\ DQGVKRZLQJWKHP¿UVWKDQGZKDW7ELOLVL exact value of attracting them also isn’t “I got here in May and extended until is like and why they should move to clear, as the impact of nomads on local June, and extended until July, and ended Georgia.” economies remains a little-studied topic. up not leaving until August,” she says If the nomads attending the event Georgia is currently ahead of the curve with a laugh, echoing a sentiment com- agree, WorkFromGeorgia is likely to play when it comes to nomad-friendly poli- mon among many longer-term expats and host to a lot more than the approximately FLHVKRZHYHUDQGGH¿QLWHO\KDVWKHSR- nomads in Georgia. 70 nomads it welcomed in 2019. Johnny tential to become a good example of the As the founder of the Tbilisi Digital FD believes the Nomad Summit will do right way to approach the phenomenon.

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dŚĞ ůĂƚƚĞƌ ƌĞŐƵůĂƚĞƐ͕ ĂŵŽŶŐ ŽƚŚĞƌ ŝƐƐƵĞƐ͕ ĂĐƚŝǀŝƚŝĞƐ ŽĨ ƉŚǇƐŝĐĂů ĂŶĚ ǁĂƐ ĂŶĚ Ɛƚŝůů ŝƐ ƐƵďũĞĐƚ ƚŽ ĂƉƉƌŽǀĂů ďǇ ƚŚĞ 'ĞŽƌŐŝĂŶ EĂƚŝŽŶĂů ůĞŐĂů ƉĞƌƐŽŶƐ ŝŶ ƚŚĞ ĨŝĞůĚ ŽĨ ĞůĞĐƚƌŝĐŝƚǇ ƐǇƐƚĞŵ ŵĂŶĂŐĞŵĞŶƚ͕ ŽŵŵƵŶŝĐĂƚŝŽŶƐ ŽŵŵŝƐƐŝŽŶ ;'EͿ͕ ǁŚŝůĞ ƚŚĞŝƌ ƐĂůĞ ĨŽƌ ƚŚĞ ĞůĞĐƚƌŝĐŝƚǇ ŵĂƌŬĞƚ͕ ŐĞŶĞƌĂƚŝŽŶ͕ ƚƌĂŶƐŵŝƐƐŝŽŶ͕ ĚŝƐƚƌŝďƵƚŝŽŶ͕ ĞŶĨŽƌĐĞŵĞŶƚ ŽĨ ĚĞĐŝƐŝŽŶ Žƌ ĂǁĂƌĚ ǁĂƐ ĐŽŵƉůĞƚĞůǇ ŽƵƚ ŽĨ 'E͛Ɛ ŝŵƉŽƌƚ͕ ĞǆƉŽƌƚ ĂŶĚ ĐŽŶƐƵŵƉƚŝŽŶ ŽĨ ƚŚĞ ĞůĞĐƚƌŝĐŝƚǇ ;ƉŽǁĞƌͿ͘ /ƚƐĞƚƐ ƐƵƉĞƌǀŝƐŝŽŶ͘dŚŝƐ ĂůƐŽ ŵĂĚĞ ŝƚ ƉŽƐƐŝďůĞ ĨŽƌ ŽĨĨƐŚŽƌĞ ĞŶƚŝƚŝĞƐ ƚŽ ƚŚĞ ƌƵůĞƐ ŽĨ ĐŽŶĚƵĐƚ ĨŽƌ ƚŚĞ ĞŶĞƌŐǇ ŵĂƌŬĞƚ ƉůĂǇĞƌƐ͘ ĞƐƉŝƚĞ Ăůů ĂĐƋƵŝƌĞ ƐƵĐŚ ƐŚĂƌĞƐ ƚƌŝŐŐĞƌŝŶŐ ƌĞǀŽĐĂƚŝŽŶ ŽĨ ƚŚĞ ďƌŽĂĚĐĂƐƚŝŶŐ ƚŚĞƐĞĐŚĂŶŐĞƐ͕ ŚĂƌŵŽŶŝǌĂƚŝŽŶ ŽĨ 'ĞŽƌŐŝĂŶ ůĞŐŝƐůĂƚŝŽŶ ǁŝƚŚ ƚŚĞ ůŝĐĞŶƐĞ͘ dŚĞ ĐŽƵƌƚ ĞŵƉŚĂƐŝǌĞĚ ƚŚĞ ŝŵƉŽƌƚĂŶĐĞ ŽĨ ĞǆŝƐƚŝŶŐ ƌĞůĞǀĂŶƚ h ŝƌĞĐƚŝǀĞƐ ĂŶĚ ZĞŐƵůĂƚŝŽŶƐ ŝƐ Ɛƚŝůů ƵŶĚĞƌǁĂǇ͘ &Žƌ ƐƵƉĞƌǀŝƐŝŽŶ ĂŶĚ ƉƵďůŝĐ ĂǁĂƌĞŶĞƐƐ ŽŶ ƚŚĞ ďĞŶĞĨŝĐŝĂƌŝĞƐ ŽĨ ŝŶƐƚĂŶĐĞ͕ ƚŚĞ 'ĞŽƌŐŝĂŶ WĂƌůŝĂŵĞŶƚ ƉƵďůŝƐŚĞĚ ƚŚĞ ŝůů ŽŶ ŶĞƌŐǇ ďƌŽĂĚĐĂƐƚŝŶŐ ůŝĐĞŶƐĞ ŚŽůĚĞƌƐ͕ ǁŚŝĐŚ ĐĂŶŶŽƚ ďĞ ƐƵƉĞƌƐĞĚĞĚ ďǇ ĨĨŝĐŝĞŶĐǇ ƚŚĂƚ ĨŽĐƵƐĞƐ ŽŶ ŝŶĐƌĞĂƐŝŶŐ ƐĂĨĞƚǇ ŽĨ ĞůĞĐƚƌŝĐŝƚǇ ƐƵƉƉůǇ ĐƌĞĚŝƚŽƌƐ͛ŝŶƚĞƌĞƐƚƐ͘ ĂŶĚ ďĞĐŽŵŝŶŐ ƐĞůĨͲƐƵĨĨŝĐŝĞŶƚ ƚŚƌŽƵŐŚ ĞŶĞƌŐǇĐŽŶƐĐŝŽƵƐƉŽůŝĐŝĞƐ͘ Ɛ ƉĂƌƚ ŽĨ ĂŶŽƚŚĞƌ ĐĂƐĞ ƉƵďůŝƐŚĞĚ ŽŶ ϭϰ EŽǀĞŵďĞƌ ϮϬϭϵ͕ ƚŚĞ dŚĞ ǁĂǀĞ ŽĨ ůĞŐŝƐůĂƚŝǀĞ ĐŚĂŶŐĞƐ ŝŶ ƚŚĞ ĞŶĞƌŐǇ ƐĞĐƚŽƌ ŝƐ ƌĂƚŚĞƌ ŽŶƐƚŝƚƵƚŝŽŶĂů ŽƵƌƚ ǁĂƐ ĂƐŬĞĚ ƚŽ ƌĞǀŝĞǁ ƚŚĞ ĐŽŶƐƚŝƚƵƚŝŽŶĂůŝƚǇ ŽĨ ŽǀĞƌǁŚĞůŵŝŶŐ͕ ďƵƚ ŝƚ ĚŽĞƐ ŶŽƚ ŵĞĂŶ ƚŚĂƚ ƚŚĞ ƉƌŽĐĞƐƐ ǁŝůů ƐƚŽƉ ƌƚŝĐůĞϳϱ;ϱͿŽĨƚŚĞ>ĂǁŽĨ'ĞŽƌŐŝĂ ŽŶ ŶĨŽƌĐĞŵĞŶƚ WƌŽĐĞĞĚŝŶŐƐ ĂŶǇƚŝŵĞ ƐŽŽŶ͘ DĞĂŶǁŚŝůĞ͕ ŝƚ ŝƐ ǇĞƚ ƚŽ ďĞ ƐĞĞŶ ǁŚĞƚŚĞƌ ƐƵĐŚ ƐǁŝĨƚ ĂŶĚ ŝƚƐ ĐŽŵƉůŝĂŶĐĞ ǁŝƚŚ ƚŚĞ ĚƵĞ ƉƌŽĐĞƐƐ ƌŝŐŚƚƐ͘ hŶĚĞƌ ƚŚŝƐ ĂŶĚŝŵƉĂĐƚĨƵůĐŚĂŶŐĞƐĂƌĞĂŶǇďĞƚƚĞƌĨŽƌƚŚĞ ŵĂƌŬĞƚ ƚŚĂŶ ŐƌĂĚƵĂů ƌƚŝĐůĞ͕ƵŶůĞƐƐĂŶĂƐƐĞƚǁĂƐƐŽůĚĂƚƚŚĞĂƵĐƚŝŽŶ;ŝŶĐůƵĚŝŶŐĨŝƌƐƚĂŶĚ ĂƉƉƌŽǆŝŵĂƚŝŽŶŽĨ'ĞŽƌŐŝĂŶƌĞŐƵůĂƚŝŽŶƐƚŽƚŚŽƐĞŽĨƚŚĞh͘ ƚǁŽƌĞƉĞĂƚĞĚĂƵĐƚŝŽŶƐͿĨŽƌƚŚĞƉƵƌƉŽƐĞƐŽĨĞŶĨŽƌĐĞŵĞŶƚŽĨĂĐŽƵƌƚ ũƵĚŐŵĞŶƚŽƌĂƌďŝƚƌĂůĂǁĂƌĚ͕ƚŚĞĂƚƚĂĐŚŵĞŶƚǁŽƵůĚďĞůŝĨƚĞĚĂŶĚŶŽ Et>tK&'KZ'/KEZ/sd/s^ ĞŶĨŽƌĐĞŵĞŶƚ ƌĞŵĞĚŝĞƐ ǁĞƌĞ ĂǀĂŝůĂďůĞ ƚŽ ƚŚĞ ƐĂŵĞ ĐƌĞĚŝƚŽƌ Ɛ ĨůĂŐŐĞĚ ŝŶ ƚŚĞ ^ĞƉƚĞŵďĞƌ ŝƐƐƵĞ ŽĨ ŽƵƌ >ĞŐĂů EĞǁƐůĞƚƚĞƌ͕ ƚŚĞ ĂŐĂŝŶƐƚ ƚŚĞƐĂŵĞ ƉƌŽƉĞƌƚǇ ĨŽƌ ĞŶĨŽƌĐĞŵĞŶƚ ŽĨ ƚŚĞ ƐĂŵĞ ĐůĂŝŵ͘ ŝůů ŽŶ &ŝŶĂŶĐŝĂů WůĞĚŐĞ͕ EĞƚƚŝŶŐ ĂŶĚ ĞƌŝǀĂƚŝǀĞƐ ǁĂƐ ƐƵďŵŝƚƚĞĚƚŽ dŚĞ ĐŽƵƌƚ ĐŽŶĐůƵĚĞĚ ƚŚĂƚ ƚŚŝƐ ƌƵůĞ ǁĂƐ ŶŽƚ ƉƌŽƉŽƌƚŝŽŶĂƚĞ ǁŝƚŚ ƚŚĞWĂƌůŝĂŵĞŶƚŽĨ'ĞŽƌŐŝĂ͘/ƚƐƵĐĐĞƐƐĨƵůůǇƉĂƐƐĞĚƚŚĞƉĂƌůŝĂŵĞŶƚĂƌǇ ƚŚĞ ůĞŐŝƚŝŵĂƚĞ Ăŝŵ ƉƵƌƐƵĞĚ ĂŶĚ ƉŽŝŶƚĞĚ ŽƵƚ ƐĞǀĞƌĂů ƉŽƐƐŝďůĞ ŚĞĂƌŝŶŐƐ ĂŶĚ ǁĂƐ ƉƵďůŝƐŚĞĚ ŽŶ ϮϬ ĞĐĞŵďĞƌ ϮϬϭϵ͘ dŚĞ ůĂǁ ĂůƚĞƌŶĂƚŝǀĞ ĂƉƉƌŽĂĐŚĞƐ ĨŽƌ ĂĐŚŝĞǀŝŶŐ ƚŚĞ ƐĂŵĞ ŐŽĂů ;ũƵĚŝĐŝĂů ŝŶƚƌŽĚƵĐĞƐ ĚĞĨŝŶŝƚŝŽŶƐ ŽĨ ĚĞƌŝǀĂƚŝǀĞ ŝŶƐƚƌƵŵĞŶƚƐ͕ ƋƵĂůŝĨŝĞĚ ĞĐŽŶŽŵǇͿ͘ dŚĞ ĐŽƵƌƚ ĞƐƚĂďůŝƐŚĞĚ ƚŚĂƚ ĚŝƐƉƵƚĞĚ ĂƌƚŝĐůĞ ĨŝŶĂŶĐŝĂů ĐŽŶƚƌĂĐƚƐ͕ ĨŝŶĂŶĐŝĂů ƉůĞĚŐĞ͕ ĞƚĐ͘ ĂŶĚ ĞƐƐĞŶƚŝĂůůǇ ďƌĞĂĐŚĞĚƚŚĞƌŝŐŚƚƚŽĚƵĞƉƌŽĐĞƐƐ͘ ĨĂĐŝůŝƚĂƚĞƐ ƚƌĂĚŝŶŐ ǁŝƚŚ ƋƵĂůŝĨŝĞĚ ĨŝŶĂŶĐŝĂů ŝŶƐƚƌƵŵĞŶƚƐ͘ DŽƐƚ EKd,ZZh^'/E^d'D>/E'h^/E^^ ŶŽƚĂďůǇ͕ ŝƚ ƌĞŝŶĨŽƌĐĞĚ ƚŚĞ ĞŶĨŽƌĐĞĂďŝůŝƚǇ ŽĨ ĐůŽƐĞͲŽƵƚ ŶĞƚƚŝŶŐ ĞǀĞŶ ŝŶ ŝŶƐŽůǀĞŶĐǇ ƐĐĞŶĂƌŝŽ͕ ǁŚŝĐŚ ǁĂƐ Ă ŵĂũŽƌ ĚĞĨĞĐƚ ŽĨ > ŚĂƐ ďĞĞŶ ĐůŽƐĞůǇ ĨŽůůŽǁŝŶŐ ĐŽŶƚŝŶƵŽƵƐ ĂŵĞŶĚŵĞŶƚƐ ƚŽ ƚŚĞ 'ĞŽƌŐŝĂŶ ĨŝŶĂŶĐŝĂů ƌĞŐƵůĂƚŝŽŶƐ ƉƌŝŽƌ ƚŽ ĂĚŽƉƚŝŽŶ ŽĨ ƚŚŝƐ ůĂǁ͘ ŐĂŵďůŝŶŐ ƌĞŐƵůĂƚŝŽŶƐ͘ KŶ ϭϯ EŽǀĞŵďĞƌ ϮϬϭϵ͕ ĂŶŽƚŚĞƌ &ƵƌƚŚĞƌŵŽƌĞ͕ ƚŚĞ ŶĞǁ 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'ĞŽƌŐŝĂ ŝƐŐƌĂŶƚĞĚ ƚŚĞ ĂƵƚŚŽƌŝƚǇ ŝŶĚŝǀŝĚƵĂů ƚŽ ƐƵĐŚ ůŝƐƚ ƵƉŽŶ ƌĞƋƵĞƐƚ ŽĨ Ă ĨĂŵŝůǇ ŵĞŵďĞƌ ƚŽ ĚĞĨŝŶĞ ĂĚĚŝƚŝŽŶĂů ƚǇƉĞƐ ŽĨ ƋƵĂůŝĨŝĞĚ ĨŝŶĂŶĐŝĂů ĐŽŶƚƌĂĐƚƐ ĂŶĚ ƚŚƌŽƵŐŚ ũƵĚŝĐŝĂů ƉƌŽĐĞĚƵƌĞ͘ ^ƵĐŚ ůŝƐƚ ŝƐ ƉƌŽƉŽƐĞĚ ƚŽ ŽƉĞƌĂƚĞ ĞǆƚĞŶĚƚŚĞůŝƐƚŽĨƵŶĚĞƌůǇŝŶŐĂƐƐĞƚƐŽƌƵŶĚĞƌůǇŝŶŐŝŶĚŝĐĂƚŽƌƐ͘ ĞƐƐĞŶƚŝĂůůǇ ĂƐ Ă ďůĂĐŬͲůŝƐƚ ʹ ŝŶĚŝǀŝĚƵĂůƐ ůŝƐƚĞĚ ƚŚĞƌĞŝŶ ǁŝůů ŶŽƚ ďĞ ĂůůŽǁĞĚ ƚŽ ĂĐĐĞƐƐ ŐĂŵďůŝŶŐ ĨĂĐŝůŝƚŝĞƐ Žƌ ĞǀĞŶ ĐƌĞĂƚĞ ĂŶ ĂĐĐŽƵŶƚ Ăƚ ŽŶůŝŶĞ ŐĂŵďůŝŶŐ ƉůĂƚĨŽƌŵƐ͘ >ĂƐƚůǇ͕ ƚŚĞ ďŝůů ĂŝŵƐ ƚŽ ŝŵƉůĞŵĞŶƚ &d& ƌĞĐŽŵŵĞŶĚĂƚŝŽŶƐ ŽĨ ŽƵŶĐŝů ŽĨ ƵƌŽƉĞ ĞƐƚĂďůŝƐŚŝŶŐŵĂŶĚĂƚŽƌǇ D> ĐŚĞĐŬĨŽƌŽďƚĂŝŶŝŶŐŐĂŵďůŝŶŐůŝĐĞŶƐĞ ŝŶ'ĞŽƌŐŝĂ͘ D'DYLG$JKPDVKHQHEHOL$YH7ELOLVL*HRUJLD 7HO EOF#EOFJH EOFJH

([FHOOHQFHLQ :+$7:('2 What’s new in the 2019-2020 Georgian ski-season

GEORGIA’S FOUR MAIN SKI RESORTS ARE MAKING STEADY IMPROVEMENTS TO BOTH MUNICIPAL AND SKI INFRASTRUCTURE AND ARE EXPERIENCING RAPID GROWTH. WHILE TRADITIONAL RESORTS LIKE GUDAURI AND BAKURIANI SEEK TO BECOME SKI- MECCAS, SMALLER RESORTS ARE BIDDING ON RETAINING THEIR AUTHENTICITY AND UNIQUENESS TO ATTRACT TOURISTS.

TAYLOR MARGVELASHVILI

BAKURIANI

WINTER VISITORS IN 2018-19: 136K The Municipal Development Fund UHQRZQHGKRWHOFKDLQ5RRPVKDVRI¿- SKI LIFTS: 7 of Georgia has implemented a 5 million cially opened in Bakuriani in time for the TRAILS: 24 euro project, funded by the EBRD, to 2019-2020 ski-season. This ski-in, ski- TOTAL LENGTH OF SKI TRAILS: 29 KM H[SDQGWKHÀHHWRIVSHFLDOL]HGYHKLFOHVLQ out hotel is located in Kokhta-Mitarbi, Bakuriani, adding 10 new modern diesel in the heart of the mountain wilderness. Bakuriani is busy with preparations buses, a front loader, snow compactor, “Rooms Hotel Kokhta’s sleek, con- for the upcoming Freestyle Ski and evacuator, wheeled excavator-loader, temporary design is inspired by the local Snowboard World Championships which wheeled loader (mini loader), universal landscape, using traditional Georgian will be held at the resort in 2023. The multifunctional truck and waste collec- building materials, such as wood, stone, resort will also be hosting the 2022 FIS tion vehicle. and clay to evoke an atmosphere that Ski Flying World Championships. These Some of these vehicles will be driv- is modern, while still paying tribute to events, Mountain Resorts of Georgia ing along the new Bakuriani Bypass its cultural heritage. $40 million was Communications Head Ani Geradze Road, which runs from the main resort invested in the hotel, which has 95 says, “will help popularize winter sports complex to the Didveli ski zone. The guest rooms and a stunning view of the DQGDGGWRWKHHYHULQFUHDVLQJLQÀX[RI PLOOLRQ*(/SURMHFWZDV¿QDQFHG Caucasus mountains, conference halls, international tourists into the country. by the European Investment Bank and is DQGDIDUPWRWDEOHUHVWDXUDQWUHÀHFW- The eyes of the world will be on Georgia, expected to drastically reduce congestion ing modern culinary preferences with and Bakuriani is determined to impress.” in and around Bakuriani. a strong connection to locally-sourced Bakuriani has also been nominated The Municipal Development Fund, products. Soon, Rooms Hotel Kokhta as a candidate host city for the European in cooperation with the Egis Group and will also have a spa and a swimming Youth Olympic Winter Festival in 2025. with help from the World Bank, has also pool”, Adjara Group Managing Director In preparation for the upcoming LQYHVWHGPLOOLRQ*(/ PLOOLRQ /HYDQ%HUXODYDWROGInvestor.ge. championships, Bakuriani has been in its strategic plan to develop “multi- The construction of this new ho- expanding both its ski and municipal modal transportation and mobility” in tel is one part in a two-stage plan to infrastructure. Bakuriani. This includes building new reinvigorate and further develop the A new ski lift has been added on sidewalks, crosswalks, streetlights, bi- Kokhta-Mitarbi area. The next stage the Didveli slope with a capacity of cycle paths, and bus stations, as well as will include building a car-free resort, 1800-2400 passengers per hour. It was improving public spaces, such as parks, oriented towards tourists who want an constructed by the Swiss company Dop- squares, and pedestrian walkways. The authentic wilderness experience away pelmayr Garaventa Group. 10 gondolas project will also focus on improving the from busy roads. Construction on this were also added to one of the main lifts facades of centrally-located buildings stage is expected to continue in 2023, to the already existing 34, increasing the and beautifying tourist areas. after Bakuriani hosts the Freestyle capacity by 350-400 tourists per hour. The Adjara Group’s internationally- championship.

34 | Investor.ge FEBRUARY-MARCH 2020 GUDAURI early January caused by unseasonably ters, and only takes around 15 minutes WINTER VISITORS IN 2018-19: 410K dry weather, both resorts have made a and is considerably more convenient than SKI LIFTS: 18 comeback. using the Jvari Pass, which can be dan- TRAILS: 26 Gudauri is expanding its safety and gerous and is often forced to close due TOTAL LENGTH OF SKI TRAILS: 52 KM monitoring systems, including the instal- to snowfall, avalanches and landslides. Georgia’s largest ski resort, Gudauri lation of an avalanche warning system 7KHPLOOLRQ*(/FDEOHFDUZLOOQRZ already has well-developed ski and enter- to prolong the number of days that the also ensure that the Stepantsminda region tainment infrastructure and offers a wide resort is open. does not remain for long periods of time array of adventure sports opportunities Another example of how the Gudauri in the winter season. such as back country and heli-skiing. resort is developing is the Gudauri-Kobi Yet another infrastructural improve- Though Gudauri and Bakuriani cable car, which opened in January 2019 ment is the construction of the 22.7 H[SHULHQFHGDGLI¿FXOWVWDUWWRWKH\HDU and connects Gudauri to Stepantsminda. kilometer Kvesheti-Kobi road, which is after experiencing water shortages in The cable car stretches over 7.5 kilome- FRPSULVHGRI¿YHWXQQHOVDQGVL[EULGJHV and runs under the Jvari Pass, further reducing avalanche risk. The $558 million investment project backed by the ADB, EBRD and Government of Georgia is due to be completed in 2023. This road is a crucial addition to the North-South corridor connecting Geor- JLD5XVVLDDQG$UPHQLD2QHRIWKH¿YH tunnels is an impressive 9 km long. The project will reduce the distance between Kvesheti and Kobi, reducing travel time from 1 hour to just 20 minutes. Aside from the new infrastructure, a brand new 4-star Best Western hotel opened its doors in late December 2019. The 63-room hotel cost 10 million lari to construct. The Amber Group also opened WKH*XGDXUL/RGJHZKLFKLVORFDWHGRQ one of the slopes and has ski-in and ski- out facilities available for tourists.

FEBRUARY-MARCH 2020 Investor.ge | 35 GODERDZI # WINTER VISITORS IN 2018-19: 14.7K opportunities. but has had several hiccups along the # OF SKI LIFTS: 4 But the resort is growing: it currently way, however Georgian Roads Depart- # OF TRAILS: 4 has 19 new investment projects worth PHQW'HSXW\&KDLUPDQ/HYDQ.XSDWDVK- TOTAL LENGTH OF SKI TRAILS: 8 KM PLOOLRQ*(/ 86' LQWKH vili says that progress is expected to pick works. up after the 2019-2020 winter season. One of Georgia’s newer resorts, Go- One of the biggest obstacles to devel- The project includes laying 47 ki- derdzi is a great destination choice for ski opment in the area is the lack of updated lometers of a two-lane road which will enthusiasts seeking undisturbed powder road infrastructure connecting Goderdzi drastically reduce travel time between and to get away from the crowds. to Batumi and Tbilisi. One project to the Javakheti and Adjara regions by up The Goderdzi resort has snow cover address this problem is the reconstruc- to 1.5 hours, and open up a second transit from November-April, giving it the tion of the Khulo-Zarzma section of the artery in addition to the traditional East- longest ski season of any resort in Geor- highway that leads from Akhaltsikhe in West highway that runs to the north. gia, and experiences up to three times the east to Batumi in the west, passing Back in late 2018, then-PM Mamuka more snowfall than either Bakuriani or by Goderdzi in between. Bakhtadze announced that 30 million Gudauri. Funded by the Kuwait Fund for Arab *(/KDGEHHQDOORFDWHGWRSURYLGHD The resort has set itself apart by the Economic Development, the $110 mil- steady supply of gas to the Goderdzi availability of catskiing and heliskiing lion project began back in October 2018 Gorge in 2020. MESTIA (TETNULDI AND HATSVALI)

# WINTER VISITORS IN 2018-19: 41K construct residential complexes. Mestia, however the journey could be # OF SKI LIFTS: 7 “It’s not that locals don’t want hotels shortened to just eight if a project pro- # OF TRAILS: 14 – it’s the apartments that are then rented posing a lift from the village of Mulakahi TOTAL LENGTH OF SKI TRAILS: 37 KM out remotely via AirBnB that are a prob- goes through. The lift is important not lem for the sustainable development of a only to reduce travel time and distance Mestia is often hailed as one of local economy”, Dadvani says. – the road to the base of Tetnuldi also Georgia’s most unique resorts, given its Hatsvali is easily reachable from SUHVHQWVGLI¿FXOWLHVZLWKODUJHVQRZIDOO remoteness, altitude and pristine beauty. Mestia itself by lift. However, Dadvani sometimes blocking the road or making In a bid to prevent over-construction notes that the resort itself is in need of LWPRUHGLI¿FXOWWRWUDYHUVH in Mestia and the surrounding area, a a larger lift that can accommodate more ___ development plan for the municipal- people as demand has risen surprisingly Special thanks to SkiGeorgia.ge ity has been drawn up and is awaiting quickly in recent years. Dadvani recalls Managing Editor Daniel Doinitsin, Moun- FRQ¿UPDWLRQ skepticism amongst locals in the area, tain Resorts of Georgia Head of Int’l /RFDOKRWHORZQHU/HYDQ'DGYDQL ZKRDW¿UVWMRNHGWKDWWKHOLIWZRXOGJR Communications Ani Geradze and the says the area has been slow to develop, unused. Georgian National Tourism Administra- but somewhat purposefully: locals are Tetnuldi, the other mountain resort tion for assistance in preparing wary of large developers that want to in the area, is just 18 kilometers from this article.

36 | Investor.ge FEBRUARY-MARCH 2020 Situated in the Kokhta-Mitarbi resort, under the shadows of the breathtaking lesser Caucasus Mountains of Bakuriani, Rooms Hotel Kokhta is a strikingly contemporary ski-in ski-out resort in winter and a perfect gateway to alpine experiences year-round.

www.roomshotels.com

FEBRUARY-MARCH 2020 Investor.ge | 37 In the past three decades since Georgian independence, Maritime sector making the country’s maritime sector has sailed through choppy waters. waves as Georgia pushes After the collapse of the Soviet Union, the national Geor- gian Ocean Shipping Company out to sea worked its way into debt and its assets – including a not unim- SUHVVLYHÁHHWRIVKLSVLQFOXGLQJ GEORGIA’S MARITIME SECTOR HAS NAVIGATED TOUGH dozens of tankers – were scat- WATERS SINCE INDEPENDENCE, BUT STEADY STEPS PROVIDING tered to the four winds. INCENTIVES TO ATTRACT FOREIGN BUSINESS TO THE CITY’S Thousands of experienced COASTAL REGION MAY SOON PROVE FRUITFUL. VDLORUVZHUHDEOHWREULHÁ\ÀQG work with foreign companies, before the European Commis- sion withdrew the recognition of JOSEF GASSMANN the world ends”, the Deputy Director of *HRUJLDQVHDIDUHUV·FHUWLÀFDWHV Georgia’s Maritime Transport Agency – many of which, it said at the eorgia is paying increased at- Ivane Abashidze says about the country’s time, were being forged – in tention to the maritime sector historic limited perception of the sea. Gas the importance of the blue Georgia is now beginning to adopt economy makes its way onto the radar. a 21st century view of the extent of the Georgian Maritime Transport Agency Against the background of boom- opportunities it has to act on in the blue Deputy Director Abashidze says plans to LQJJOREDOGHPDQGIRUHFDVWE\/OR\G¶V economy, extending beyond transit trade revitalize the sector will be allow for the Register of Shipping in the maritime for goods en route to Europe from China development of a business climate and industry over the next ten years, the and Central Asia. conditions to attract foreign shipowners European Union has allocated €300,000 Rebuilding fleets, promoting the and their manifold associated business IRUWKHFUHDWLRQRID¿YHDQGWHQ\HDU interest of shipowners to sail under the and support services. maritime development plan, which is be- Georgian flag, attracting companies Maritime services and logistics ing produced by the Georgian Maritime working in the maritime sector to set up specialist Tarimanashvili says Georgia Transport Agency, and which aims to camp in the country, expanding tourism is uniquely positioned geographically, revitalize the sector. and exploiting the Free Industrial Zones and that with its low-corruption and “The sea rarely meant anything more bordering the countries ports – the possi- business-friendly environment, a few than a border for Georgia. Even the word bilities along its 310 kilometers of Black tweaks to legislation could bring in a border in Georgian itself comes from the Sea coastline are vast. slew of businesses. word sea – as if the sea is a place where Not to lose sight of the moment, “There are a number of countries in

38 | Investor.ge FEBRUARY-MARCH 2020 2010, protesting the poor qual- exemptions to shipowners and operators, Unfamiliar with maritime business ity of the system of training and the implementation of a tonnage tax, RSHUDWLRQVEDQNVZHUHDW¿UVWUHWLFHQW certifying seafarers in Georgia. plans to handle port congestion and the WRRIIHU¿QDQFLDOVHUYLFHV Through a series of reforms between 2010-2012, which SURPRWLRQRIPDULWLPH¿QDQFHPRGHOV Maritime services specialist Jaba included the creation of the for local banks, amongst others. Tarimanashvili referred Stellar-Navi- country’s regulatory body, the gation’s case to the Maritime Transport Maritime Transport Agency MANEUVERING TO FOREIGN Agency. and the introduction of new training standards in maritime BUSINESS He explains: “The shipping industry education, these issues were /LWKXDQLDQVKLSSLQJFRPSDQ\6WHOODU is new for our country, and consequently addressed: the EU Transport Navigation set up a management and WKHUHLVQRWPXFKH[SHULHQFHLQWKH¿HOG Commission re-examined the issue and in November 2013 RSHUDWLRQVRI¿FHLQ%DWXPLLQHDUO\ RIPDULWLPH¿QDQFH)LQDQFHLQVWLWXWLRQV lifted the ban on Georgian cer- – their story illustrates what still needs to needed to understand that in order to run WLÀHGVHDIDUHUVIRU(8YHVVHOV be done to nurture such shows of interest an international shipping business, you Now, Georgia has agree- in Georgia’s maritime sector. don’t actually need to have your ships ments with 51 countries worldwide on the mutual recognition Certainly, among the front-runners, if docking in your waters. This issue was RIVHDIDUHUV·FHUWLÀFDWHVRI QRWWKH¿UVWIRUHLJQPDULWLPHFRPSDQ\ solved by direct communication, which which are members of the EU. to pitch camp in Georgia, Stellar Navi- is one advantage we have as a small gation is testing the local waters before country, and one with which we could considering introducing larger operations attract the attention of other companies: the region that would gladly come here in the area. you can talk to both the government and if the conditions were right. Turkish, &RPSDQ\GLUHFWRU$OHNVDQGU/\- to large businesses here and you will be Ukrainian companies in particular, be- senko explains his company’s status in heard.” cause they face several issues there and Georgia and how he landed in the country 2WKHUZLVH/\VHQNRVD\VWKHFRXQ- the tax legislation in those countries is LQWKH¿UVWSODFH try’s legislation is fairly suitable for not ideal. But we could attract compa- “Currently we’ve about ten people on maritime companies to set up more in- nies from even further abroad – such as the ground in Georgia, and are engaged volved operations: however, the current from Central Asia. Having established LQPDQDJLQJRXUFRPPHUFLDOÀHHW$W taxation system is an obstacle that needs a track record with regional companies, ¿UVW,GLGQRWSODQDQ\UDGLFDOPRYHWR to be addressed before this can happen. we could eventually hope to compete Georgia. But I’ve another business here, “The largest issue is that of the ben- with maritime hubs such as Cyprus, the the legislation covering our initial foray H¿WVDQGH[HPSWLRQVWKDWVKLSRZQHUV Emirates, Malta or elsewhere”, Tari- into the country seemed favorable, and, can expect to enjoy almost the world manashvili says. well, the weather’s hard to beat!” over. Shipping is a sort of locomotive This, Tarimanashvili says, could be However, there were a few stumbling that brings behind it a whole slew of GRQHE\WKHSURYLVLRQRIWD[EHQH¿WVDQG EORFNVDORQJWKHZD\/\VHQNRVD\V other businesses – ship repair, building,

FEBRUARY-MARCH 2020 Investor.ge | 39 ADVERTISEMENT

accounting, management and other professional services and much more. And so shipowners and companies expect to be JLYHQDQXPEHURIFRQFHVVLRQV´/\VQHNRVD\VQRWLQJVRPHRI the most prohibitive taxes that are generally done away with per industry convention include taxes on income, property (vessels) and employment. Tarimanashvili says these taxes can be replaced by something else: “What we need is a tonnage tax, which is a predictable yearly payment based on a vessel’s registered tonnage. The tax is a relatively small amount, and can in some way be considered a formality, because there are places where ships can go where they pay nothing. But ship owners largely prefer environments ZKHUHWKH\IHHOWKH\FDQKDYHDSURGXFWLYHPXWXDOO\EHQH¿FLDO relationship with the host state.”

PROPELLING AND PROMOTING The Maritime Transport Agency has made quite a bit of progress, particularly in the past year, in gradually pivoting the country’s whole maritime sector to make it more attractive to foreign maritime companies and promoting the growth of the seafaring industry at large. “Cutting down bureaucracy has been an important push in this direction”, Abashidze says, noting that in 2019, the Maritime Transport Agency launched the research stage of implementing a so-called ‘single window’ system for ports, the purpose of which will be to provide ports and ship owners with digital government services, and relieve ships of having to go through numerous bureaucratic and document procedures related to import, export and other regulatory requirements. Georgia has also begun to take steps to revamp education in the seafaring profession – a sensible move, given how well the trade can pay. In 2018, Georgian sailors brought home more WKDQPLOOLRQ*(/ PLOOLRQ WRWKHLUIDPLOLHVVXSSRUW staff can make up to $1,000 a month, mid-level crew can earn around $4,000 while top-level managers can rake in $8,000 a month and more, making for some of the only western-level salaries available in the country. In 2016, the Maritime Transport Agency adopted a document with the Ministry of Education to introduce international standards in the maritime educational sector. “One crucial element of reforming the education system HQWDLOHGWKHLQFOXVLRQRI(QJOLVK±DVWKHRI¿FLDOLQGXVWU\ language – into the system and doing away with instruction in Russian. Earlier, we had seafarers that knew Georgian and 5XVVLDQEXWQR(QJOLVK:KHUHZHUHWKH\VXSSRVHGWR¿QG employment, when the rest of the industry has adopted English

40 | Investor.ge FEBRUARY-MARCH 2020 as the official language?” Abashidze ZKLOHLWV¿UVWVWXGHQWVZLOOPDWULFXODWH “For now, it’s a matter of creating says, noting “the incorporation of digital LQ7KHEUDQFKZLOODW¿UVWEHFD- the right conditions, and taking care of learning and hands-on training modules pable of enrolling 1,000 students, and individual businesses that trickle in – this into the curriculum, and raising demands will employ 250 professionals, teachers, is what Georgia can do right now.” on students overall will make the gradu- administrators and support staff. Tarimanashvili agrees that the growth ates of the 2019-2020 school year – the The MTA has also signed agreements of the sector must be approached with a ¿UVWZDYHRIVWXGHQWVWRJUDGXDWHVLQFH with Brazil and Germany, detailing the long-term view. the new requirements were put in place PXWXDOUHFRJQLWLRQRIFHUWL¿FDWHVIRU “Georgia is in a position to present – really stand out on the market, making Georgian seafarers training and cer- itself as the doorway to a number of for a difference of “night and day” in WL¿FDWLRQVWDQGDUGVLQERWKFRXQWULHV opportunities. But traders never want to comparison to former years. in addition to Kuwait and Croatia. An face a dead end, and they are constantly The reach and availability of educa- agreement was signed with Australia searching for new routes and alternatives tion for seafarers is also expanding, with WRKDYH*HRUJLDQVHDIDUHUV¶FHUWL¿FDWHV WRH[LVWLQJRQHV,IWKH\GRQ¶W¿QGLWKHUH the Georgian government spending 6 recognized as well, and a similar agree- WKH\ZLOO¿QGLWHOVHZKHUH:KDWZH PLOOLRQ*(/ PLOOLRQ RQH[WHQGLQJ ment with the UK will be reached soon, need now is a clear vision, a strategy and the Batumi State Maritime Academy into the agency says. In total, Georgia has better communication with neighboring Poti by opening a new branch in the for- 51 such agreements, 19 of which are countries – that’s when we can expect to mer building of the Hydro-Melioration members of the EU. start making real waves.” School – a building included in the ___ country’s list of historical heritage sites FULL STEAM AHEAD Thanks to Batumi State Maritime Acad- of the 20th century. *HRUJLDZRQ¶WUHVWRUHLWVÀHHWDQG emy Business Faculty Dean Roman Construction of the Poti branch of former lively maritime sector overnight, Mamuladze for assistance in the BSMA is slated for the end of 2020, /\VHQNRVD\V compilation of this article.

FEBRUARY-MARCH 2020 Investor.ge | 41 Georgia’s capital markets primed WRUUHODWLRQVRI¿FHDQGURDGVKRZV´ The ground has been prepared with for influx of int’l investment new Georgian laws, says the NBG “in compliance with the best international following new rules and regs practice” and “based on relevant Euro- pean Union (EU) directives and regulations”. The new legislation on investment funds, it believes, “creates an attractive SALLY WHITE reducing currency and interest rate risks and competitive foundation for fund for banks, companies and investors and business development in Georgia.” As s Georgia’s State Pension Fund increasing investor protection. it stands now, there is little any fund has launched, a whole raft of The laws also aim to enable Geor- business at all. Anew rules and regulations are gian banks to gain a foothold in global Such progress in the development of readying Georgia’s capital markets for markets and help bring money into the capital markets will help Georgia present an increase in business, both domestic country. a good case to analysts at international and foreign. The International Monetary Fund rating agencies to back up the strong A multipronged package of measures (IMF) has applauded the National Bank growth prospects story. All three have is being targeted at encouraging lari of Georgia (NBG)’s strategy to “engage been steadily upgrading Georgia over the funding, helping cut back dollarization, with foreign investors through an inves- last couple of years, so the country is now

42 | Investor.ge FEBRUARY-MARCH 2020 not too far off from achieving investment January 2020 kicked off with the with approval of the pace of progress in grade – 2025 is suggested in the markets NBG announcing a long-heralded law developing the markets, “a roadmap to – which indicates an acceptable level of that creates a framework for deriva- introduce a Primary Dealers system (in risk for major international funds. WLYHV±¿QDQFLDOFRQWUDFWVXVHGZRUOG- which dealers act as wholesalers for the The hope is that these measures, as wide to manage risks. A lot of heads National Bank) that will help deepen the well as the major new investor in the have been put together on this, with the market and diversify the investor base.” form of the State Pension Fund, will European Bank of Reconstruction and Georgia is making up for lost time. encourage more players to join in Geor- Development (EBRD) and the Interna- Even the NBG admitted last year that gia’s markets. tional Swaps & Derivatives Association Georgia’s bond market (corporate and At TBC Capital, the view of the working with the NBG. Also pulled in, government) “is relatively small com- research team is that “there is room for through workshops, were potential lo- pared to its peers” and that includes even new investment vehicles. In most cases, cal users. neighbouring countries. It added: “The demand on issuances is oversubscribed, “Banks currently do cross-border lack of liquidity in the secondary market indicating high demand for Georgian derivatives, but volumes are limited and and the relatively small size of the issues bonds...We believe that new issuances prices are high. Without netting arrange- remain constraints for foreign investors.” could stimulate secondary trading and ments in place, banks have to allocate Another concern, outlined in the increase market liquidity.” capital on gross exposure. This changes NBG’s 2019 Financial Stability Report, Brokers Galt & Taggart predict that with the new law,” explained the NBG. was that much corporate debt “is foreign ZLWKPLOOLRQ*(/ PLOOLRQ “Corporates: they too have exposures currency-denominated which businesses in its coffers already, the Pension Fund to currency and interest rate risks. Espe- ¿QGGLI¿FXOWWRKHGJH7KHUHKDVDOVR ZLOODFFXPXODWHELOOLRQ*(/ cially exporters and importers. They are been considerably reliance on short-term billion) by 2025. going to be active consumers of deriva- funding, which would pose rollover risks “Currently half this amount is de- tive products. Their counterparties are VKRXOG¿QDQFLDOFRQGLWLRQVWLJKWHQ´ posited in commercial banks, while the usually banks. When banks enter into Government advisors Berlin Eco- rest is in the National Bank (NBG). The derivatives with corporates, they may be nomics have commented that “larger pension proceeds are expected to be exposed to additional risks. That risk is companies…lack long-dated currency invested in local treasuries (government usually hedged with other banks in the debt instruments and risk-orientated bonds) from 2020 and gradually expand market. Again, the costs of hedging are capital” because of the “underdeveloped to Georgian Eurobonds and local corpo- priced into products offered to corporate bond and equity markets”. rate bonds. The fastest growing category clients”, the NBG added. The extent of dollarization, still at LVH[SHFWHGWREH*(/GHQRPLQDWHG As described in detail by the EBRD, the relatively high level of 56 percent of local corporate bonds and treasuries, as January’s package “provides for the en- loans and 62 per cent of deposits “results the emergence of a large institutional forceability of derivatives transactions, in vulnerabilities” says Berlin Econom- investor (the State Pension Fund) will including netting, close-out netting and LFV¶'U$OH[DQGHU/HKPDQQ7KHVH increase demand.” ¿QDQFLDOFROODWHUDODPHQGVDQXPEHURI include credit and liquidity risks. His However, with Georgia’s corporate laws and reinforces key related concepts, concern was shared by IMF managing sector need for very considerable sums VXFKDVVHWWOHPHQW¿QDOLW\´,WDOORZV GLUHFWRU&KULVWLQH/DJDUGHRQKHUYLVLWLQ of money to develop energy production, “companies to safely and efficiently 2019, and she pointed to solutions such agriculture and industry, more than the hedge their risks and exposure, includ- as “developing the local capital market State Pension Fund’s investment re- ing from foreign exchanges and interest and promoting institutional investors sources are required. rates, contributing to the development of who could support demand for long- Galt & Taggart adds: “The Pension DORFDOFXUUHQF\¿QDQFLDOPDUNHW´ term, local-currency bonds and other Fund has a 10 percent limit on invest- In the pipeline are laws to improve ¿QDQFLDODVVHWV´ ing in local corporate bonds of a single investor protection and investment trans- These concerns are being addressed. issuer, and we expect that to be a major parency, to provide new forms of securi- Foreign investor interest in Georgia’s obstacle for local corporate bond devel- ties (covered bonds) and make bond pric- markets has been rising, but for the less opment.” LQJPRUHHI¿FLHQW7KH,0)KDVOLVWHG risky government treasury rather than corporate bonds, and non-residents hold the US and other advanced economies, Still to come? According to Dr. Al- 10 per cent (as of December 2019) of rates remain low. As there will be little H[DQGHU/HKPDQQ³,QQRYDWLRQVVXFKDV treasuries outstanding. room for a sizable rate cut in 2020 given LQÀDWLRQOLQNHGERQGVDQGJUHHQERQGV Galt & Taggart expect their attraction LQÀDWLRQG\QDPLFVLQ*HRUJLDZHH[SHFW FRXOGIXUWKHUZLGHQIXQGLQJ/LTXLGHT- to continue. “The increased interest of LQWHUHVWUDWHVZLOOUHPDLQKLJKLQ*(/ uity markets are a more ambitious aim non-residents recently can be explained and Georgian treasuries will remain - private equity rather than listed stocks E\KLJKLQWHUHVWUDWHVLQ*(/ZKLOHLQ competitive.” and IPOs should be the priority.”

2020 IN THE NATIONAL BANK OF GEORGIA’S CAPITAL MARKET DEVELOPMENT PROGRAM

Law on Derivatives: now in force &DQEHXVHGE\ERWKORFDOÀQDQFLDOLQVWLWXWLRQVDQGWKHLULQWHUQDWLRQDO counterparties Investor Protection: law amendments to be %DVHGRQ(8PRGHOVWKHVHDPHQGPHQWVVKRXOGEULQJVLJQLÀFDQW submitted to parliament by Q1 2020 improvements in protection, control of market abuse and increase transparency. Investment Fund Law: expected initiation Q1 2020 Modelled on directives governing investment fund activities across EU countries Securities Holding legislation: expected to come into “State of the art law” - to bring greater legal clarity and compliance with force in H1 2020 best international practice, ensuring high levels of protection for both local and international investors. Covered Bonds – parliamentary approval date )UDPHZRUNIRUWKHVHDVVHWEDFNVHFXULWLHVWKDWDOORZÀQDQFLDOLQVWLWXWLRQVWR target Q4 2020 EX\DQGVHOODVVHWVWRLPSURYHFUHGLWTXDOLW\DQGORZHUERUURZLQJFRVWV Primary Dealer System – 2020 and 2021 To be run in 2020 in pilot mode with six dealers and expected to be fully implemented in 2021

44 | Investor.ge FEBRUARY-MARCH 2020 YEAR

FEBRUARY-MARCH 2020 Investor.ge | 45 :KDWNLQGRILVVXHVLV\RXURI¿FH requested to intervene in the most? The array of appeals we receive is OLNHDPLUURU±DPLUURUWKDWUHÀHFWVWKH most important issues and concerns for the commercial entities in the country when it comes to their relationship with the state. Many of the applications we receive deal with tax issues, and thus concern the Ministry of Finance and the Revenue Service. Most of the complaints we receive have to deal with the VAT refund and at times income tax, but there are SOHQW\RIRWKHU¿HOGVWRR±LPSRUWH[SRUW and property taxation, to name a few. Issues related to the privatization of *HRUJLDQODZ¿UPVDQG$PHULFDQ&KDP- state property are also brought to our at- Interview: ber of Commerce member Gvinadze and tention, when investors need additional Partners, I spent four years working on FODUL¿FDWLRQWRIXO¿OOWKHREOLJDWLRQVWKH\ the Business commercial issues, working to protect have taken on. the interests of businesses of all sizes: 7KHGLVFXVVLRQDQG¿QHWXQLQJRIXS- Ombudsman as this was a formative part of my career. coming regulations and legislation is an I spent several years at the Economic area that businesses often ask us to weigh business mirror &RXQFLO$GPLQLVWUDWLRQXQGHUWKHRI¿FH in on as well. There are a number of of the PM, and then at the Ministry of laws in the pipeline that are good for the Economy where I worked in legislative resilience and strength of the economy, INVESTOR.GE SAT DOWN and policy issues that affect the business but that may be ‘heavy’ for private busi- WITH GEORGIA’S RECENTLY- environment. It was an important experi- nesses to bear straight off the bat. This APPOINTED NEW BUSINESS ence as far as obtaining knowledge of involves changes such as to the labor and OMBUDSMAN MIKHEIL how bureaucracies work, and what are tax codes, reforms on VAT and various DAUSHVILI TO TALK ABOUT decisions and regulations planned by THE STATE OF ARBITRATION IN the prevailing attitudes and approaches administrative bodies. GEORGIA, WHAT ISSUES THE of state agencies and bodies in relation OFFICE DEALS WITH THE MOST to businesses and commercial entities. In these cases, we try to work pro- AND WHAT INITIATIVES ARE IN I gained experience working on legis- actively to protect the interests of busi- THE PIPELINES TO STRENGTHEN lative issues, particularly concerning the nesses and commercial entities, but to THE INSTITUTION. management of state property. My group keep an eye on the public good, as well. was involved in the supervision and 7KHPDLQDLPRIRXURI¿FHLVWRXQFRYHU +RZKDV\RXUIRUPHUSURIHVVLRQDO monitoring of state-owned enterprises. obstacles in the legislation that impede H[SHULHQFHPDGH\RXWKHULJKWILW For the last two years before assum- doing business in the country and to WRKHDGXSWKHRI¿FHRIWKHEXVLQHVV LQJP\FXUUHQWRI¿FH,ZRUNHGLQWKH rectify them. Ombudsman? analytical department of the Ministry of I started my professional path with Internal Affairs, which, while not directly 7KHPRWLRQVDQGUHFRPPHQGD- WKH*HRUJLDQ

46 | Investor.ge FEBRUARY-MARCH 2020 the business Ombudsman, which is in- GHYHORSPHQWLVWKH¿UVWSDUWRIRXUMRE opinion in legal proceedings. So far, the corporated by the law, gets much of its We are supportive of efforts to im- program does not have much traction, backing from the painstaking research prove the arbitration and mediation sec- partially due to awareness, but we are and extensive study that goes into a case tor in the country which really took off planning to strengthen this institute. and the strength of its presentation. a few years ago, and which again took In other spheres of the country’s life, Something worth noting here is that serious steps forward with the passing of bureaucracy has decreased enormously, issuing motions and recommendations is new laws on mediation by parliament in wait times for documents and state not our only function: we also the play September 2019. services have been reduced to, in many the role of mediator. We facilitate strong This will do much for the country’s cases, just days or even hours. This is one and coherent communication between arbitration and mediation sector, as it will of our advantages as a country – we are private business and state bodies, and the send a very strong and powerful signal HI¿FLHQWOLJKWZHLJKWDQGGRQRWGHPDQG mark of our success is when we are able to investors and businesses, reinforcing too many procedures, but litigation pro- to bring the two sides to an agreement. Georgia’s image as indeed a country cedures could certainly be sped up and 7KHWKLUGSLOODURIWKHRI¿FH¶VLQÀX- with a healthy investment climate, an follow in the footsteps of this approach. ence is the quality of its work: when your DJUHHDEOHWD[DWLRQV\VWHPDQGHI¿FLHQW Other plans for the future include claims are well-grounded, when you bureaucracy. expanding cooperation with foreign justify your case and prove the expedi- In general, we have a strong legal 2PEXGVPDQRI¿FHV:HFXUUHQWO\KDYH ency of your recommendation – this has framework and dispute resolution mech- agreements with Albania, Uzbekistan, a very strong force of persuasion. anisms in the country, but of courses Kazakhstan and Poland – we really want Yet another way in which we are able there is always room to improve. As the to push to establish ties with European to enact change is by addressing what 2PEXGVPDQ¶VRI¿FHZHDUHZHOODZDUH countries, so as to strengthen our capac- we perceive as systemic issues. When that currently, litigation procedures run a ity and implement the best global prac- we see that one and the same complaint considerable amount of time and that this tices here in Georgia. is being lodged, we look at the source of is a substantial problem for businesses /DVWO\,¶GOLNHWRDGGUHVVUHDGHUVDQG the problem, and work with state bodies and which can hinder their activity and EXVLQHVVHVWKHRI¿FHRIWKH%XVLQHVV to proactively address the issue. Here, growth. Ombudsman of Georgia is open to co- too, working proactively in this regard Speaking about courts: the Ombuds- operation and works around the clock to is much more effective than working on PDQ¶VRI¿FHLPSOHPHQWHGWKHamicus protect the interests of companies work- a case-by-case basis. curiae (friend of the court) program last ing in Georgia. Working side by side, we We particularly encourage the state year, which affords businesses the pos- will continue to support a healthy busi- bodies we interact with to take an invest- sibility of appealing to us to present our ness environment in the country. ment-friendly attitude given the current level of development of the country. THE OFFICE OF THE BUSINESS OMBUDSMAN’S REFERRAL STATISTICS Ultimately what I want to say here BY RESPONDING AGENCIES - 2019 is that the strength of the ombudsman’s Ministry of Finance and its Agencies 158 RI¿FHGRHVQRWMXVWOLHLQPRWLRQVDQG Other Agencies 51 recommendations – but in the vital role Local self-governing bodies 32 LWSOD\VLQKHOSLQJWR¿QHWXQHDQGSHUIHFW Ministry of Economy and Sustainable Development and its Agencies 29 the legislation. Ministry of Environment Protection and Agriculture and its Agencies 21 Parliament 16 &DQ\RXWDONDERXW\RXUYLVLRQIRU Government Administration 12 WKHRI¿FH" Ministry of Justice and its Agencies 11 First on the agenda is strengthening Ministry of IDPs, Labor, Health and Social Affairs and its Agencies 9 our capacity. We are cooperating with Ministry of Internal Affairs and its Agencies 6 donor organizations to do more trainings Courts 5 IRURXUVWDIIWRUDLVHTXDOL¿FDWLRQVDQG turn out even better quality work. Self- Statistics courtesy of the Georgian Business Ombudsman’s Office

FEBRUARY-MARCH 2020 Investor.ge | 47 LIKA JORJOLIANI Qvevry – a project which aims to A look back at 2019 produce Georgian traditional wine ves- with the Georgian 019 was a big year for Georgian sels with the use of modern 3D printing startups and innovative entrepre- technologies. Innovation and 2neurship. RED – a cloud-linked fire alarm )RUWKH¿UVWWLPHLQKLVWRU\*HRUJLD capable of sensing smoke, carbon mon- Technology Agency was listed as one of the top 50 countries oxide and other harmful gasses in the Global Innovations Index rankings, 972/±$HULDOYHKLFOH±DSURMHFWWR THE GEORGIAN INNOVATION coming in 48th: a full 11-point improve- develop an innovative, multifunctional AND TECHNOLOGY AGENCY ment over the previous year. 972/ YHUWLFDOWDNHRIIDQGODQGLQJ HAS GROWN CONSIDERABLY Indicative of the uptick in attention manned or unmanned aerial vehicle, SINCE ITS INCEPTION IN to and recognition of the importance of which will be fully electric and release 2014. JUST FIVE YEARS the sector was the Georgian Innovation zero emissions capable of lifting 100 kg LATER, THE AGENCY HELPED and Technology Agency’s (GITA) bud- of non-vehicular weight. DOZENS OF STARTUPS GET JHWLQFUHDVHIURP*(/WR In the coming year, the agency plans OFF THE GROUND IN 2019. *(/DOORZLQJWKHPWRJLYH to fund 40 more startups with 100,000 WITH A SUBSTANTIALLY grants to over 50 startups and implement INCREASED BUDGET FOR *(/ DQGDQRWKHUHLJKWWR 2020, THE AGENCY HOPES a number of new initiatives. ZLWK*(/ TO CONTINUE TO DRIVE “2019 was indeed a turning point in INNOVATION IN THE COUNTRY WKH¿HOGRILQQRYDWLRQGHYHORSPHQW´WKH PUTTING TBILISI ON THE STARTUP AND TURN GEORGIA INTO A new chairman of the Georgian Innova- MAP... REGIONAL STARTUP HUB. tion and Technology Agency (GITA) One of the biggest events of the $YWDQGLO.DVUDG]HVD\VQRWLQJWKH¿HOG year was Startup Grind Tbilisi in early is gradually expanding to encompass IT November. and AI in addition to the more traditional Startup Grind Tbilisi, organized with ¿HOGVIRU*HRUJLDQVWDUWXSVRIWRXULVP the support of the GITA, was the third- and biotech. largest gathering of start-up companies Some of the most interesting projects in 2019 within the Startup Grind network funded by GITA in 2019 included: DIWHU6LOLFRQ9DOOH\DQG/RQGRQDQGSUR-

48 | Investor.ge FEBRUARY-MARCH 2020 vided a space for Georgian and regional The Georgian Ministry of Infrastruc- institutes in Georgian universities have companies and startups to establish new ture plans to build two more techparks in submitted applications and GITA has relationships and share their experiences. Kaspi and Gurjaani. selected projects with the most com- The summit hosted a number of in- “It is very important that more mercialization potential, from univer- ternational and local speakers, reviewed people be included in the development sities and individual researchers who programs and events implemented for of Georgia’s innovative ecosystem,” says they deemed most ready to work with startups over the course of the year and Kasradze. investors. They reviewed 72 projects and featured a number of Georgian startups GITA also traveled to 11 regions in selected 13. Another exciting project in that had brought in more than 1,000,000 2019, including a number of small towns, 2019 includes the launch of a multimil- *(/LQLQYHVWPHQWVLQ where the organization held informa- lion-dollar partnership between Silicon Increased financing was indeed a tion sessions about ICT (information Valley, Tbilisi, and the Israeli Techub in major part of the year on the Georgian communication technology), and where Georgia, which led to the creation of the startup scene, Startup Grind Tbilisi chap- young people could learn about studies Global Startup Fund, whose purpose it ter head and AmCham member Colin LQ67(0¿HOGV*,7$DOVRRUJDQL]HGD will be to “open access to Georgian start- Donohue says: seven-day summer camp focusing on ups with multimillion-dollar investments “2019 saw more seed investment, technological engineering and math- under the Silicon Valley Partnership with a few million dollars in private seed ematics, which was supported by the between Tbilisi and Israel...and to sup- funding. More companies started going World Bank. port the process of formulating Georgia’s outside of Georgia, including Pulsar AI entrepreneurial ecosystem, discovering ZKRVHWXSDQRI¿FHLQ6DQ)UDQFLVFR THE YEAR AHEAD innovative startups and promoting their with their CEO and hired a Silicon Valley Plans for the upcoming year include commercialization on the international salesman to grow their company. Now FKDQJLQJWKHOHJDOGH¿QLWLRQDQGVWDWXV market.” that companies are starting to get some of startups. One successful project to benefit traction, we’re working more on lining “We want to do away with the public from this partnership includes Echolize, up investment. 2020 will be more about perception that startups can only be a DQLQWHUQDWLRQDOSODWIRUPIRUµLQÀXHQFHU fueling growth for companies who are VPDOOEXVLQHVVRUDÀHGJOLQJFRPSDQ\ marketing – a form of marketing in which showing promise’ since startups have other important IRFXVLVSODFHGRQVSHFL¿FNH\LQGLYLGX- characteristics, so we’re going to decide als (or types of individuals) rather than AND THE REST OF GEORGIA, TOO. who to award that status to and grant the target market as a whole, Echolize’s GITA’s activities and initiatives were WD[EHQH¿WVWRKLJKWHFKDQGLQQRYDWLYH site reads. not just limited to the capital, as they startups,” says Kasradze, explaining an 50% of the funding came from a sought to bring the Georgian regions into amendment will be added to the existing *(/*,7$JUDQWDQGWKHRWKHU the fold of the innovation conversation innovation legislation about how small 50% was supplied by David Zera of the as well. businesses attain startup status. Global Startup Foundation. Part of this mission was achieved In addition to a larger budget for The project is still in beta, but is ex- with the opening up of techparks and 2020, GITA received a €1 million grant SHFWHGWRODXQFKLQWKH¿UVWKDOIRI innovation centers across the country, from the European Union to commercial- 2QHRIWKH¿UVWSURMHFWVWREHIXQGHG which offer the use of incubators, train- L]HVFLHQWL¿FGHYHORSPHQWV by the Global Startup Fund was Pulsar ing centers, laboratories, as well as The agency plans to create a technol- AI, which received $1,200,000. They RI¿FHVJHQHUDOZRUNDQGUHFUHDWLRQDO ogy transfer pilot program to promote also received a $650,000 grant from spaces. the commercialization of research GITA. Adding to the already existing spaces projects that meet the requirements and The company develops technology in Telavi, Tbilisi and Zugdidi, two inno- challenges of the global market. This such as computer language processing, vation centres were opened in Akhmeta project will be implemented by GITA, DUWL¿FLDOVSHHFKIDFLDODQGREMHFWUHFRJ- and Rukhi in the beginning of 2019, and in cooperation with the World Bank and nition technology, voice recognition in another techpark is expected to open later with funding from the EU. Georgian, analysis of customer emotion, this year in Batumi. As part of the program, research and talk-to-text technology.

FEBRUARY-MARCH 2020 Investor.ge | 49 grams; providing humanitarian goods American Friends of Georgia and medical equipment and much more.

THE 25TH ANNIVERSARY CHARITY celebrates 25th anniversary GALA On December 14, 2019 AFG cel- with charity gala ebrated the 25th anniversary of its charity work in Georgia with a Christmas THE SILVER JUBILEE OF AMERICAN FRIENDS OF GEORGIA, Charity Gala – a unique opportunity to ONE OF THE COUNTRY’S MOST PROMINENT CHARITY connect leading local and international ORGANIZATIONS, PROVIDED AN OPPORTUNITY TO RAISE FUNDS corporations, artists, musicians and em- FOR FUTURE PROJECTS AND LOOK BACK AT ITS WORK IN 2019. bassies to solve social problems. “I carry on the legacy of my father wenty-five years ago, Geor- out a wide range of projects, including Constantine, who founded American gian-American lawyer, envi- assisting children with leukemia, cancer Friends of Georgia 25 years ago at a time TURQPHQWDOLVWDQGSXEOLF¿JXUH and TB; opening the ‘Parents House’ – a of instability and social upheavel in his Constantine Sidamon-Eristoff set out to rehabilitation center for children suf- owner father’s beloved country of Geor- establish a charity organization to help fering with leukemia and their parents; gia. It is my great pleasure to celebrate KLVDQFHVWUDOKRPHODQGGXULQJWKHGLI¿- launching initiatives for cervical and 25 years of AFG’s groundbreaking and cult post-Soviet transitional period – this breast cancer prevention; creating a pal- innovative programs. We look forward to organization was the American Friends liative, hospice and home care program; the years ahead!”, AFG Chairman Simon of Georgia (AFG). rehabilitating disabled and homeless Sidamon Eristoff noted at the gala. Today, AFG has become a catalyst children; reconstructing the Dzegvi This year, the Charity Gala raised for much-needed innovative programs in shelter; developing vocational education *(/ WRVXSSRUWWZR Georgia to assist and empower children, programs for IDP children and adults; major projects: the Dzegvi Shelter Com- the elderly and other socially vulnerable building a school in Nikozi; establishing munity and a Hospice and Palliative groups. day care centers for vulnerable children; Home Care Program, which help the From 1994 to 2019, AFG has carried launching environmental education pro- most vulnerable children and elderly in

50 | Investor.ge FEBRUARY-MARCH 2020 Georgia. and the only free hospice nursing school problems that often go unnoticed. The Dzegvi Shelter Community is and home-care education program in The campaign won several important located near Tbilisi, and started as an *HRUJLD7KHSURMHFWEHQH¿WVPRUHWKDQ awards, including the grand prize and orphanage for homeless children in 1995. 100 elderly people in need of palliative several gold, silver and bronze awards The shelter has been one of AFG’s home care annually. at AD Black Sea 2019, an international biggest success stories, giving 120 for- advertising festival, which attracted a lot merly homeless children the opportunity LOOKING BACK OVER 2019 of attention from corresponding events. to get off the streets and make a living Aside from winning several awards They also took the gold at the EPICA for themselves. for their charity work, 2019 was an awards, which is the only creative prize Since 2010, it has become a shelter important year for American Friends of awarded by journalists working for mar- for people who cannot live independently Georgia, as the organization launched a keting and communications magazines or have nowhere to go, such as the men- campaign that should serve as a foun- around the world. tally ill, disabled, homeless, poor elderly dation for many future AFG charity In December, AFG launched the people, and single mothers with young projects. second stage of the project, attracting children. Today, Dzegvi shelters more Dze-Georgian Project, named for designers and producers operating in than 80 inhabitants. the Dzegvi shelter, is the result of an Georgia to the campaign by using the Thanks to generous donations and extraordinarily successful partnership Dze-Georgian logo on their products contributions from partners and friends, between AFG and the creative agency and giving some of the sales proceeds AFG’s reconstruction of the shelter was Windfor’s, which saw the debut of a to American Friends of Georgia to fund completed in the summer of 2019. Now, pseudo-fashion brand at Mercedes Benz their projects. the new building will change the qual- Fashion Week, with pictures of inhabit- Everyday, more and more Georgian ity of life for inhabitants of the Dzegvi ants from the Dzegvi shelter modeling designers and producers join the cam- Community and enable it to shelter an their everyday attire and posing in their paign, including such brands as Dalood, additional 60 vulnerable children and natural environment. Zoma, Ezo, 1300 Ceramic Studio, Black elderly in need. The partnership aims to promote Dog, Flying Painter, project ArtBeat, The Transfiguration Hospice and philanthropy through fashion, and to Giovanni Mpra, Rosebud, and Santa +RPH&DUH3URJUDPLVWKH¿UVWKRVSLFH urge society to focus on several social Esperanza, leading the Dze-Georgian Project to be one of most successful creative social campaigns ever conducted in Georgia.

PLANS FOR 2020 In 2020, American Friends of Geor- gia plans to continue expanding its philanthropic work, engaging and em- powering youth and future generations by giving them the skills and education necessary to improve the Georgian quality of life in future generations. AFG will continue working for vulnerable populations in Georgia, in particular, children and the elderly. Other plans include expanding the Dze-Geor- gian project and starting a new campaign in the US, in conjunction with students from the University of Virginia’s Darden School of Business.

FEBRUARY-MARCH 2020 Investor.ge | 51 NEWS

CONTENT

MEMBERS APPRECIATION HOLIDAY 63 RECEPTION AT MARRIOT

53 AMCHAM MEETS WITH FORMER 58 MEMBER DIRECTORY NATO SUPREME COMMANDER CLARK 62 BACK TO BUSINESS COCKTAIL 54 AGROBUSINESS, EDUCATION RECEPTION COMMITTEES MEET FOR DISCUSSION 63 MEMBERS APPRECIATION HOLIDAY 55 AMCHAM BUSINESS ROUNDTABLE RECEPTION AT MARRIOTT

56 NEW MEMBERS 64 BOARD OF DIRECTORS 2019

52 | Investor.ge FEBRUARY-MARCH 2020 NEWS

AMCHAM BUSINESS ROUNDTABLE WITH FORMER NATO SUPREME ALLIED COMMANDER OF EUROPE GENERAL WESLEY CLARK

On January 10, AmCham Georgia Europe, Commander of Operation Allied spoke about the geopolitical situation in organized a business roundtable discus- Force in the Kosovo War and a regular the region, US politics and the state of sion with General Wesley Clark, former commentator and expert on geopolitics the world today. Members then had an NATO Supreme Allied Commander of and security matters. General Clark opportunity to ask questions. LAUNCH OF CONSTRUCTION AND REAL ESTATE COMMITTEE

On December 13, AmCham Georgia attended by nearly 40 representatives create sub-committees to work on issues KHOGWKHYHU\¿UVWPHHWLQJRIWKHQHZO\ from member companies. Committee related to skilled labour capacity build- launched Construction and Real Estate members expressed issues of concern ing, assurance of quality of construction Committee. DQGLGHQWL¿HGFRUHWRSLFVIRUIXWXUHGLV- and its materials, health and safety and Due to high interest the meeting was cussions. The committee also decided to delays with obtaining permits.

FEBRUARY-MARCH 2020 Investor.ge | 53 NEWS

AGRIBUSINESS COMMITTEE MEETING ON DECEMBER 13, AGRIBUSINESS COMMITTEE MET TO LISTEN TO A PRESENTATION DELIVERED BY CERTIFICATION SPECIALIST ILIA KUNCHULIA FROM THE GEORGIAN FARMER’S ASSOCIATION. MR. KUNCHULIA PRESENTED GEOGAP, AN INITIATIVE TO IMPROVE THE QUALITY OF GEORGIAN AGRICULTURAL PRODUCTS, BROADLY FOLLOWING THE FORMAT OF ONE OF THE WORLD’S LEADING FOOD CERTIFICATION SYSTEMS, GLOBAL G.A.P. GEOGAP IS SUPPORTED BY USAID’S ZRDA ACTIVITY, IMPLEMENTED BY CHEMONICS, ONE OF AMCHAM’S LONG-TIME MEMBERS.

EDUCATION AND TRAINING COMMITTEE MEETING

ON DECEMBER 12, AMCHAM GEORGIA HELD AN EDUCATION COMMITTEE MEETING AT AMCHAM’S OFFICE. GEORGIAN TECHNICAL UNIVERSITY (GTU) INTRODUCED ATTENDEES TO ITS NEW VOCATIONAL TRAINING PROJECT. SAN DIEGO STATE UNIVERSITY INTRODUCED THEIR FUTURE PLANS AND ADDITIONAL PROJECTS FOR THE NEXT YEAR. COMMITTEE MEMBERS AGREED ON TOPICS TO DISCUSS AT THE NEXT MEETING WHICH WILL BE HELD IN EARLY 2020.

54 | Investor.ge FEBRUARY-MARCH 2020 NEWS AMCHAM BUSINESS ROUNDTABLE ON DECEMBER 4, AMCHAM GEORGIA ORGANIZED A BUSINESS ROUNDTABLE AT RADISSON BLU IVERIA HOTEL. DR. ALEXANDER LEHMANN, BANKING AND FINANCIAL SECTOR EXPERT OF GERMAN ECONOMIC TEAM GEORGIA PRESENTED THE “FINANCIAL MARKET MONITOR” AND MR. DAVIT UTIASHVILI, HEAD OF THE FINANCIAL STABILITY DEPARTMENT OF THE NATIONAL BANK OF GEORGIA PRESENTED THE FINANCIAL STABILITY REPORT. THE PRESENTATIONS WERE FOLLOWED BY A DYNAMIC Q+A SESSION BETWEEN AMCHAM MEMBERS AND INVITED SPEAKERS.

AMCHAM BUSINESS ROUNDTABLE ON THE GEORGIAN FILM INDUSTRY AND FILM IN GEORGIA ON NOVEMBER 29, AMCHAM ORGANIZED A BUSINESS ROUNDTABLE ON THE STATE OF AND DEVELOPMENTS IN THE GEORGIAN FILM INDUSTRY. TOPICS OF DISCUSSION INCLUDED THE PAST OF GEORGIAN FILM MAKING, CURRENT DEVELOPMENTS IN THE INDUSTRY AND FUTURE PLANS. FILM IN GEORGIA’S TATIA BIDZINASHVILI TALKED ABOUT THE SUCCESS OF THE COUNTRY’S CASH REBATE PROGRAM IN ATTRACTING FOREIGN PRODUCTIONS, WHILE FILM COMMISSIONER DAVID VASHADZE SPOKE ABOUT THE RECOGNITION OF GEORGIAN FILMS AT FESTIVALS ABROAD.

FEBRUARY-MARCH 2020 Investor.ge | 55 NEWS

Alta Akustiko Business Legal Bureau (BLB) Corp A Corp B Corp B Alta is one of the biggest consumer Akustiko was founded in 2014. Since its For more than 20 years, the Business and home appliance distributors in Geor- inception the main goal of the company’s Legal Bureau (BLB) has been one of the gia, with two self-owned big retail chains founders and the team as a whole has most widely recognized legal names in (LLC Alta Retail and LLC Metromart), EHHQ WR PDNH D VLJQLÀFDQW FRQWULEXWLRQ *HRUJLDPDNLQJLWWKHROGHVWORFDOODZÀUP dealer network, aftersales service and to the development of country’s acous- specializing in all areas of business law. strong corporate sales team. Official tic and sound insulation market. Leading Among the clients of BLB are major local partners include: specialists of the company constantly DQG LQWHUQDWLRQDO FRPSDQLHV ÀQDQFLDO - Samsung, Huawei, Alcatel, TCL, Whirl- participate in international conferences institutions and wealthy individual investors SRRO RIÀFLDOGLVWULEXWRU DQGWUDLQLQJVLQWKHÀHOGRIVRXQGLQVXODWLRQ involved in large cross-border transactions +RQRU RIÀFLDOH[FOXVLYHGLVWULEXWRU and internal acoustics. The company has and investment projects. - Xiaomi (distributor) also been the host of numerous acoustics Clients of BLB benefit by receiving - Apple (exclusive premium reseller conferences. The project team has full personal and unparalleled services di- and authorized reseller in retail and FRPSHWHQFHLQWKLVÀHOGDQGPRVWLPSRU- rectly from Partners, who take the lead wholesale) tantly a lot of practical experience. and continue to be actively involved Within the scope of its business activi- 7KHFRPSDQ\TXDOLÀHVLQWKHIROORZLQJ in every stage of the transaction while ties Alta has more than 400 suppliers, more directions: VXSSRUWHGE\KLJKO\TXDOLÀHG$VVRFLDWHV than 900 brands, over 300 employees. - In-house acoustic projecting, acous- %/%·VSULPDU\JRDOLVWREHWKHODZÀUPRI Number of consumers exceeds 600,000. tic measurement, acoustic design and choice for clients with respect to their most alta.ge consulting; VLJQLÀFDQWEXVLQHVVWUDQVDFWLRQVWKHLUPRVW - Sound insulation between spaces, challenging legal issues, and the most criti- sound insulation measurement, projecting cal disputes they face. and consulting; BLB has a long-standing association - Vibration insulation, projecting and with the UK law Firm Tulloch & Co, Solicitors, LQVXODWLRQRIWHFKQLFDOHTXLSPHQW London, that enables our team to advice - External noise insulation, noise mea- clients on international business transac- surement and research, projecting and tions as governed by UK law. consulting; blb.ge - Acoustic 3D modeling and design of professional spaces, acoustic measuring works, projecting and consulting; - Professional voice systems, background (BGM) and evacuation sound systems, conference systems, show lighting system and stage mechanization – design and system integration / installation work. akustiko.ge NEW MEMBERS

56 | Investor.ge FEBRUARY-MARCH 2020 NEWS NEW MEMBERS

GlovoApp Georgia LLC Lisi Development MAC Georgia Corp B Corp B NP Glovo is transforming the way consum- /LVL 'HYHORSPHQW LV WKH ÀUVW GHYHORS- 0$& *HRUJLD D ORFDO QRQSURÀW RU- ers access local goods, enabling anyone ment company in Georgia, which is car- ganization, has one goal: to transform to get almost any product delivered in rying out the urbanization of 355 hectares the lives of Georgia’s most vulnerable minutes. The digital platform connects of land around the Lisi Lake territory. The by providing the resources and services consumers with independent local couri- company was founded in 2010 and since they need to maximize their potential. HUVZKRDFTXLUHJRRGVIURPDQ\UHVWDX- then has been working to develop large- Throughout the country, MAC increases rant or store in the city. scale projects such as Lisi Green Town local skills and knowledge, expands ac- Mission: Anything you want. Delivered in Tbilisi, Kokhta-Mitarbi Resort in Borjomi cess to information and resources, and in minutes. Municipality and Buknari Resort on the extends hope and opportunity to those glovo.ge Black Sea Coast. The aim of the projects who need it most. Each year, disability is to create not only modern living style SURJUDPPLQJHTXLSVWKRXVDQGVRIWHDFK- DQG UHÀQHG DUFKLWHFWXUDO FRPSOH[ EXW ers, parents, and service providers with the also to establish brand new environment skills and knowledge necessary to help for ecological and healthy way of living those in their care. The wheelchair and in Georgia. assistive technology initiative assists chil- Since the foundation, Lisi Develop- GUHQZLWKGLVDELOLWLHVWRREWDLQHTXLSPHQW ment introduced an innovative principle that is right for them and that lets them live of 80/20, which implies using only 20% of more actively and independently. MAC the territory for the residential part, and the parent support programming establishes remaining 80% for creating recreational regional resource centers where parents zones and additional infrastructure. Over and families get accurate, up-to-date 100 million dollars invested since 2011, information about disabilities, their rights, hundreds of employees and a popular and the services that are available locally recreation and residential zones - are to- and nationally. MAC’s impact extends day’s achievements of Lisi Development. beyond disabilities, however. The regional lisi.ge education program works closely with rural schools and encourages hundreds of at- risk village youths to be more active and Mr. Rajapaska, Waruna engaged in extracurricular activities such Individual as leadership camps, English language - $Q LQGHSHQGHQW VHQLRU ÀQDQFH SUR clubs, and theater programs. MAC be- fessional based in Georgia and Sri Lanka, lieves that success begins with educa- with over 30 years of experience primarily tion, and we back that belief with action. LQSURMHFWLQIUDVWUXFWXUHÀQDQFHDGYLVRU\ (LJKW\ÀYHVWXGHQWVIURPDFURVV*HRUJLD and Public Private Partnerships (PPPs) in are attending university this year because large scale infrastructure, working both of a MAC scholarship. Each of these stu- for Government (Public sector) and the GHQWVQRZKDVDFKDQFHWRIXOÀOOKHUKLV private sector across Power & Energy, potential as a future community leader. Ports, and Oil & Gas sectors. Also has Through all of these and more, MAC work extensive experience in management H[HPSOLÀHVWKHEHOLHIV)RUWKRVHZLWKD consultancy and privatizations working disability, MAC’s work inspires a new and at Ernst & Young. Hands on experience more actively independent way of living in managing operations of complex in- that reaches beyond family and com- tegrated construction projects as mem- munity; for young people, MAC’s help ber of Employer’s representative team. inspires new and expanding futures that Experienced procurement and strategic LQÁXHQFH ERWK FRPPXQLW\ DQG FRXQWU\ VRXUFLQJ VSHFLDOLVW DQG SURÀFLHQW LQ WKH MAC’s work changes lives - today and for conduct of business process and organi- generations to come. zational reviews. macgeorgia.org

FEBRUARY-MARCH 2020 Investor.ge | 57 AmCham Company Members as of February 2020

PATRON MEMBERS Best Western Hotel Tbilisi DAI Global (Implementer of the Georgian Wine 11 Apakidze St. USAID Economic Security) Tel: 595001889 Tel: 2300777 7th Floor, 34 l. Chavchavadze Ave. www.bestwesterntbilisi.ge 0179 GMT Group BP Exploration Georgia Tel: 577465059 4 Freedom Square 24, S. Tsintsadze St. www.dai.com Best Western Hotel Tbilisi City Tel: 2988988; Fax: 2988910 Tel: 2593400 Center www.gmt.ge www.bpgeorgia.ge 92 Barnov St. Dasta Records Management Tel: 227070 15 Grigol Lortkipanidze St. www.bwtbilisicitycenter.ge Gosselin Mobility Georgia Tel: 2900112 3 M/D, Didi Digomi KPMG Georgia LLC www.drm.ge Tel: 2596601/02/03; Fax: 2596600 5th Floor, GMT Plaza, Betsy’s Hotel / Prosperos Books www.gosselinmobility.eu 32/34 Makashvili St. / 4 Freedom Sq., 0105 Deloitte 34 Rustaveli Ave. Tel: 2935713; Fax: 2982276 King David Business Center Tel: 2987624, Fax: 2923592 Grant Thornton LLC www.kpmg.ge WKÀRRU0HUDE$OHNVLG]H6W www.betsyshotel.com 54 Ketevan Tsamebuli Ave. Tel: 2244566; Fax: 2244569 Tel: 2604406 www.deloitte.ge www.grantthornton.ge British American Tobacco PwC Georgia 71 Vazha Pshavela Ave. 12 M. Aleksidze St., 0160 Tel: 2157500/01/02; Fax: 2157503 Dentons Georgia LLC Greco Group King David Business Center www.bat.com 10 Melikishvili St. 1 Nutsubidze St. Tel: 2508050; Fax: 2508060 Tel: 2509300; Fax: 2509301 Tel: 2393138; Fax: 2311107 www.pwc.com www.dentons.com www.greco.ge Budget Rent a Car - Otokoc Georgia LLC 37 Rustaveli St. Diplomat Georgia GT Group 48 B. Cholokashvili St. UGT Tel: 2234112 65, Kakheti Highway www.budget.com.ge Tel: 2984950 Tel: 2740740 D&KDYFKDYDG]H$YHWKÀRRU www.gtgroup.ge Tel: 2220211; Fax: 2220206 www.diplomat.ge www.ugt.ge Capitol HPS / Best Western Hotels & Resorts - Area Developer Dressler Consulting GULF Georgia in Georgia 1664 De Mott Court/ Merrick by Sun Petrolium Georgia LLC QGÀRRUE9D]KD3VKDYHOD$YH New York, 11566, USA Pixel Business Center, CORPORATE A MEMBERS 0186 Tel: +1-5169081444 34 Chavchavadze Ave. Tel: 2197835 www.dresslerconsulting.com Tel/Fax: 2496444 www.capitolhps.com www.gulf.ge

Adjara Group Hospitality Caucasus University EY LLC 1, 26 May Sq., 0179 44 Kote Abkhazi St. Hertz Georgia .RVWDYD6W%OGWKÀ Tel: 2300099 1 Rose Revolution Sq. Hotel Tel: 2377777; Fax: 2313226 Tel: 2439375; Fax: 2439376 www.adjaragroup.com www.ge.ey.com 5DGLVVRQ%OXH,YHULD*ÀRRU www.cu.edu.ge Tel: 2723530 www.hertz.com.ge Alliance LLC Chemonics International F H Bertling Georgia Ltd. 135 King Parnavaz St., Batumi Room 3, 4th Floor, 9 N.Ramishvili St, 1st Dead End,0179 Hilton Batumi Tel: 591555757 154 Agmashenebeli Ave. Tel: 2227495 13 Takaishvili St., Batumi www.alliancegroup.ge Tel: 2252287 www.chemonics.com Tel: 292092 www.bertling.com www.hilton.com Alliance Group Holding, JSC CleanTech Ltd. 47/57 M. Kostava St., 0179 5 Avlip Zurabashvili St., 0144 FINCA Bank Georgia Tel: 2424181; Fax: 2998112 Hilton Garden Inn Tbilisi Tel: 595608778 www.agh.ge 9D]KD3VKDYHOD$YHUGÀ Chavchavadze www.zoma.ge Tel: 2244949 64a, Chavchavadze Ave. ZZZ¿QFDJH Tel: 2252020 Alta LLC Coca-Cola Company www.hilton.com Beliashvili st. 104, 0159 114 Tsereteli Ave. Tel: 2510111 Gazelle Finance Georgia LLC Tel: 2941699, 2942609 Tatishvili st. 3/5 (Melikishvili Ave. www.alta.ge www.coca-cola.com Iberia Refreshments, JSC $ZRUG%XVLQHVV&HQWHUWKÀRRU Tetri Khevi Hesi District, Orkhevi Tel: 2904304 American Medical Centers, Tel: 2241091; Fax: 2241090 Colliers International ZZZJD]HOOH¿QDQFHFRP www.pepsi.ge Georgia Georgia LLC 11 D. Arakishvili St., Tbilisi 11th Floor, King David Business General Electric Tel: 2500020 Center, 12 M. Aleksidze St. 0171 ICE Ltd. 5th Floor, Pixel Bulding, 114, Gorgiladze St., Batumi Tel: 2224477 Chavchavadze Ave. #33b 34 Chavchavadze Ave. Tel: (+995 32) 250 00 77 www.colliers.com Tel: 2990172 www.amcenters.com Tel: 2259516 / 2259505 www.ice.com.ge www.ge.com Conformity Assessment Anaklia Development International (CAI) LLC IT Consulting Georgia LLC Consortium 11 Giorgi Saakadze Descent Geomedica Ltd. Irakli Abashidze 36-34, Terminal 6 Marjanishvili St. Tel: 595690008 12 First Lane, N.Bokhua St, 0131 Gate 13 Tel: 2959910 www.ca.international Tel: 2520035 Tel: 599231313 www.anakliadevelopment.com www.geomedica.ge www.spotcoin.net &XVKPDQ :DNH¿HOG*HRUJLD Avon Cosmetics Georgia LLC 4th Floor, 34 l. Chavchavadze Ave. Georgian American University Kavkaz Cement JSC 117 Tsereteli Ave. 0179 8 Aleksidze St. 29 Andronikashvili St., 0189 Tel: 2226805; Fax: 2226806 Tel: 2474849 Tel: 2206520; Fax: 2206519 Tel: 2619090 www.avon.com ZZZFXVKPDQZDNH¿HOGJH www.gau.edu.ge www.kavkazcement.ge

58 | Investor.ge FEBRUARY-MARCH 2020 Le Meridien Batumi Philip Morris Willis Towers Watson Ltd. Biltmore Hotel Tbilisi Intersection of Ninoshvili/Zghenti 1 Tabidze St. 17 M. Lebanidze St. 29 Rustaveli Ave. Streets, Batumi Tel: 2439001; Fax: 2439005 Tel: 2905509 Tel: 2727272 Tel: 422 299090 www.philipmorrisinternational.com www.willis.com http://www.millenniumhotels.com/en/ www.lemeridien.com tbilisi/the-biltmore-hotel-tbilisi/ ProCredit Bank Maersk Georgia LLC 154 Agmashenebeli Ave. CORPORATE B MEMBERS BLB Law Firm Business Legal 12 Aleksidze St., King David Tel: 2202222; Fax: 2202222-2226 Bureau %XVLQHVV&HQWUHÀ www.procreditbank.ge 5/18 K.Marjanishvili St., II building, II Tel: 248 66 81 Floor, 0102 https://www.maersk.com/local- AE Solar LLC Tel: 2999755 Radisson BLU Iveria Hotel information/georgia 88 Avtomshenebeli St. (Hualing www.blb.ge 1 Rose Revolution Sq. Kutaisi Free Industrial Zone), Kutaisi Tel: 2402200; Fax: 2402201 Tel: 2300099 Marriott Hotels, Resorts & Suites www.radissonblu.com www.ae-solar.com %/&/DZ2I¿FH 13 Rustaveli Ave. 129a D. Agmashenebeli Ave., 0102 Tel: 2779200; Fax: 2779210 RE/MAX Capital Tel: 2922491; Fax: 2934526 www.marriott.com Air Astana Airlines JSC 43 Irakli Abashidze St. www.blc.ge 5th Floor, Pixel Business Center, Tel: 2222424 34 Chavchavadze Ave. 0DUV//&5HSUHVHQWDWLYH2I¿FH www.remax-georgia.ge in Georgia Tel: 2514999 BMC Gorgia 71 V. Pshavela Ave; “BCV”, 0186 www.airastana.com 140 Tsereteli Ave. Tel: 2207507 School of Tomorrow LLC Tel: 2960960 www.mars.com 21, Petre Kavtaradze St. www.gorgia.ge Tel: 2233199 Akustiko hwww.st.edu.ge 93 Shalva Nutsubidze st. Mastercard Tel: 568299559 CaspiGroup Ltd. 2 Leonidze St. /1 G.Tabidze St., www.akustiko.ge 29 Bochorma St. Premises No.315, Floor 4 Sheraton Grand Tbilisi Metechi Tel: 2550818 Tel: 2900815 Palace Hotel www.caspigroup.com www.mastercard.com 20 Telavi St. APM Terminals Poti Tel: 2772020; Fax: 2772120 52 Aghmashenebeli St., Poti Caucasus Online LLC www.sheraton.com/tbilisi Tel: 0493 277777 Meridian Express 71 Vazha-Pshavela Ave. www.apmterminals.com 15-17 Ketevan Tsamebuli Ave.0103 Tel: 2000022 Tel: 2745188 SICPA Security Solutions www.co.ge www.ups.com Georgia Aversi Pharma 79 Chargali St., 0178 148/2 Aghmashenebeli Ave. Tel: 2434580 CaucasTransExpress Ltd. Microsoft Georgia LLC Tel: 2987860 www.sicpa.com 10a Tashkent St. 34 Chavchavadze Ave. www.aversi.ge Tel: 22375716 Tel: 2970123 www.cte.ge www.microsoft.com Simetria LLC 70b, Vazha-Pshavela Ave. Baker Tilly Georgia Ltd. Meidan Palace, 44 Kote Abkhazi St. Channel Energy (Poti) Limited M² Real Estate JSC Tel: 2420692 Tel: 2505353; Fax: 2505353 Georgia LLC, By Petrocas Energy 29 Chavchavadze Ave. www.simetria.ge www.bakertillyinternational.com Group Tel: 2444111 52, David Agmashenebeli St., Poti www.m2.ge Strada Motors/Jeep-Chrysler Tel: (995493) 2-7-08-60 191 Ak. Beliashvili St. Bank of Georgia www.petrocasenergy.com 2I¿FH7HFKQRORJLHV6WHHOFDVH Tel: 23073007 3 Pushkin St. Dealership www.strada.ge Tel: 2444134; Fax: 2983269 4 Freedom Sq., 0105 www.bog.com.ge Château Mukhrani, J.S.C. Sangebro St. Tel: 2999980, 2688229 T&K Restaurants (McDonald’s Tel: 2201878; Fax: 2201878; ZZZRI¿FHWHFKQRORJLHVJH Georgia) www.mukhrani.com 1 Dzmebi Kakabadze St. Basis Bank JSC 1 Ketevan Tsamebuli Ave. Oracle Nederland B.V. Tel: 2921246; Fax: 2251422 www.mcdonalds.ge Tel: 2922922; Fax: 2986548 5HSUHVHQWDWLYHRI¿FH www.basisbank.ge Conse Kievskoe Shosse, 22nd km, bld 3 Akaki Khorava St. 6/1,10881, Moscow, Russia TBC Group Tel: 599994978 Tel: +74956411400 7 Marjanishvili St. Batumi International Container www.conse.ge www.oracle.com Tel: 2272727; Fax: 2228503 Terminal 11, Baku Street, 6010, Batumi www.tbc.com.ge CMC LLC Tel: 422 276452 Orient Logic Ltd. 4 Besiki St. 8 Beliashvili St. www.bict.ge TMC Global Professional Tel: 2240717 Tel: 2541818 Services www.cmc.ge www.orient-logic.ge 6001 Indian School Road NE, Suite BDO LLC 190, Albuquerque, NM 87110, USA 2 Tarkhnishvili Str. Crowne Plaza Borjomi Pace International LLC Tel: (1 505) 8723146 Vere Business Centre, 0179 Baratashvili Str. 9, 1200 Borjomi Abuladze st. First Lane 8, 0162 www.tmcservices.com Tel: 2545845; Fax: 2399204 Tel: 995 367 220260 Tel: 2914701 www.bdo.ge www.cpborjomi.com www.pace.ge Visa International Service Association PepsiCo Wimm-Bill-Dann 900 Metro Center Boulevard, Foster BGI Legal Crystal, MFO JSC Village Ponichala, Tbilisi 0165 City, CA 94404, USA 5XVWDYHOL$YH,,ÀRRU 72 Tamar Mepe St. Kutaisi, 4600 Tel: 2475290 Tel: 599374877 Tel: 2470747 Tel: 431253343 www.wbd.ru www.visa.com www.bgi.ge www.crystal.ge

FEBRUARY-MARCH 2020 Investor.ge | 59 AmCham Company Members as of February 2020

Dio Ltd. Georgian Airways Gvinadze & Partners LLC Kockablo 12th Km David Agmashenebeli Alley 12 Rustaveli Ave. 44 Kote Abkhazi St, 0105 10 Chirnakhuli St., Saknavtobi N3, Parsadani St. Tel: 2999730; Fax: 2999660 Tel: 2438970, Fax: 2438971 Settlement, 0151 Tel: 2361112 www.georgian-airways.com www.gvinadzeandpartners.ge www.dio.ge Kordzahia, Jgenti Law Firm Georgian Beer Company HeidelbergCement Georgia 10 Petriashvili St. Domson’s Engineering 3311 Saguramo, Mtskheta District 21 Al.Kazbegi Ave. Tel: 2921878 8a Sanapiro St. Tel: 2437770 Tel: 2474747 www.kjlaw.ge Tel: 2050303 www.geobeer.ge www.heidelbergcement.ge www.domsons.com Legal Partners Associated LLC 2I¿FH%HVLNL%XVLQHVV&HQWHU Georgian Express Herbalife Nutrition Dorche Branch Prepabrik Iapi Ve 4 Besiki St. 0108 105, Tsereteli Avenue, 0119 Bld. 4a Tamarashvili St., 0116 Inshaat Sanai Tijaret JSC Tel: 2200203; Fax: 2250458 Tel: 2696060 Tel: 2202929 026/13 Ilia Chavchavadze Ave. www.lpa.ge www.dhl.com www.herbalife.com Tel: 593472419 www.dorce.com.tr Liberty Bank JSC Georgian Hospitality Group 74 Chavchavadze Ave. 22 Peritsvaleba St., 0103 Hualing International Special Tel: 2555500; Fax: 2912269 Duty Free Georgia Tel: 2987789 Economic Zone www.libertybank.ge UGÀRRU%HVLNL6W www.ghg.ge 25 Apt. 34/36 Kobuleti St. Besiki Business Center Tel: 591005900 Tel: 2430150 www.hualing.cn www.dfg.ge Lisi Development Georgian Industrial Group LLC 2 Tiripebi St. 0159 GIG Plaza, 14 Gazapkhuli St., 0177 Tel: 2002727 Hydrolea LLC Tel: 2210187 www.lisi.ge Efes Brewery in Georgia - www.gig.ge Floor 4, 29 Chavchavadze Ave. Lomisi JSC Tel: 2290003 Village Natakhtari, Mtskhta Region www.hydrolea.com Luca Polare Tel: 2357225 Georgian Integrated Systems 54 Oniashvili St. www.natakhtari.ge (GiS) Tel: 2990399 2I¿FH$EDVKLG]H6W ICS Ltd. TNT Agent in Georgia www.lucapolare.com Tel: 2243724 25 Agmashenebeli Ave. Element Construction Ltd. www.gis.ge Tel: 2910220 13 S.Mgaloblishvili St. www.tnt.ge M & M - Militzer & Munch Tel: 2374737 Georgia www.ec.ge Georgian Telecommunication 39 Ketevan Tsamebuli Ave. 12 S. Tsintsadze St. Insta Tel: 2748240, 2748941 Tel: 577693923 8, Zakariadze St., 0177 http://ge.mumnet.com ExpoGeorgia JSC www.getel.ge Tel: 2202020 118 Tsereteli Ave., 0119 www.insta.ge Tel: 2341100 Maqro Construction www.expogeorgia.ge Geo Steel LLC 22 Panjikidze St. Tel: 2000909 36 Davit Gareji St., Rustavi, 3700 Interco Travel Group www.maqro.ge Tel: 2243794 117 I. Abashidze St., 0179 Fircroft Engineering Services www.geosteel.com.ge Tel: 2294343 /LPLWHG%UDQFK2I¿FH www.interco.travel Block 2, Level 2, BCV Business Maqro Food “Dinehall” Center, 71 Vazha-Pshavela Ave. Globalink Logistics LLC 28 Rustaveli Ave. Tel: 2900875 60 Sh. Nutsubidze St., 0186 Tel: 2001616 ZZZ¿UFURIWFRP Tel: 2000238, 2208147 International Black Sea www.dinehall.ge www.globalinkllc.com University David Agmashenebeli Alley 13 km, 2, 0131 Foresight Investment Group Mercure Tbilisi Old Town Tel: 2595005 9 Gorgasali St., Old Tbilisi, 0105 2I¿FH%HVLNL6W *ORULD//& 7LÀLV3DODFH www.ibsu.edu.ge Tel: 2006060 Tel: 595 559966 3 Gorgasali St., 0105 www.mercure.com Tel: 2000245 ZZZWLÀLVSDODFHJH Gebrüder Weiss LLC ,úEDQN*HRUJLD-6& 0*/DZ2I¿FH//& Airport Adjacent Territory, 140/B Agmashenebeli Ave., 0102 WKÀRRU3L[HOEXLOGLQJ Kakheti Hwy GlovoApp Georgia Tel: 2310515 www.isbank.ge 34 Chavchavadze Ave., 0179 Tel: 2710011 5 Mikheil Asatiani St., Floor 6 Tel: 2206633 www.gw-world.com www.glovo.ge www.mglaw.ge

JTI Caucasus GeoEngineering LLC GM Capital LLC VII Floor, Pixel Business Center, Mira Hotels Ltd. 15a Tamarashvili St. 2 Tarkhnishvili St., 0179 34 Chavchavadze Ave. Brose Street Turn,Old Tbilisi Tel: 2311788; Fax: 2311787 Tel: 2912626 Tel: 2604111 Tel: 2242244/55/88 www.geoengineering.ge www.gmcapital.ge www.jti.com www.riverside.ge

Geomill LLC GMC Motors KK & Partners MKD Law 4, Chirnakhuli St. 12km, Kakheti Highway, 0109 2I¿FH1LQR5DPLVKYLOL6W 36, K. Khetagurovi St. 0102 Tel: 2400000 Tel: 2921319 Tel: 2432227 Tel: 2553880 www.geomill.ge www.eg.ge kkpartners.ge www.mkdlaw.ge

60 | Investor.ge FEBRUARY-MARCH 2020 Mosmieri LLC Rakeen Development LLC Terma JSC (CiDA) Civil Development 4, Besiki St., 4.04 0108 Pixel Business Center, Floor 1, 10 Budapest St. Agency Tel: 2970420 34 Chavchavadze Ave. Tel: 599554794 9/1 Pirosmani St., Rustavi, 3700 www.mosmieri.ge Tel: 2933393; Fax: 2933993 www.terma.ge Tel: 341258822 www.rakeen.ge www.cida.ge

Terrace Hotel & Restaurant Murphy Kazbegi 7 Polikarpe Kakabadze St. Eastern European Centre for 2I¿FH0DUL%URVH6W Rentals LLC Tel: 2999001 Multiparty Democracy (EECMD) Tel: 2007107 46 Rustaveli Ave.; 36 Griboedov St. www.theterracetbilisi.com 7 Luarsab Sharashidze St. www.murphyshipping.com Tel: 2454567 / 2996412 Tel: 2915650 www.rentals.ge www.eecmd.org Theco Ltd. 16 Chikovani St. MyGPS Europe Foundation Tel: 592107515 6 Bokhua St., 0159 Resolution Insurance Brokers, 3 Kavsadze St. www.tbilisia.ru Tel: 2180180 Georgia LLC Tel: 2253942; Fax 2252763 (ext. 112) www.mygps.ge 61, Gorgasali St. www.epfound.ge Tel: 2936305 Transporter LLC www.rib.ge 113b Beliashvili st. Free University of Tbilisi NCC Ltd. Tel: 2147171 140 David Agmashenebeli Alley 9, Erekle II turn http://www.transporter.com.ge Tel: 2200901 Tel: 2725088 Rooms Hotel www.freeuni.edu.ge www.ensisi.ge 14 Merab Kostava St. Tel: 2020099, 2730099 University of Georgia www.roomshotels.com 77a Kostava St. Georgia Red Cross Society Tel: 2552222 15 J. Kakhidze St. Nexia TA www.ug.edu.ge Tel: 2961092 4th Floor, 19 David Gamrekeli St., www.redcross.ge 0160 RSM Georgia LLC Tel: 2242559 85 Paliashvili St., 0162 VBAT Law Firm www.nexia.ge Tel: 2558899 2I¿FH*1LVKQLDQLG]H6W Georgian Retailers Association www.rsm.ge Tel: 2305777 13b Lubliana St. www.vbat.ge 555 373733 www.facebook.com/ Nodia, Urumashvili & Parnters GeorgianRetailersAssociaton 2I¿FH,9%ORFN SavvY Vinotel (“Aigvinissakhli”) LLC 71 Vazha-Pshavela Ave. 1st Pavilion, Expo Georgia,118 4 Elene Akhvlediani Ascent Tel: 2207407 Tsereteli Ave., Tel: 2555888 Georgian Waste Managment www.nplaw.ge Tel: 2421342; www.vinotel.ge Association www.savvy.ge 36 Mnatobi St. Tel: 599 224070 Wings and Freeman Capital www.facebook.com/wmageorgia Nutrimax Ltd. Green Building, 6, Marjanishvili St. 68a Rustavi Highway, 0165 Silknet Ltd. Tel: 2940051; Fax: 2940053 Tel: 2305335 Good Governance Initiative 95 Tsinamdzgvrishvili St. www.wfcapital.ge www.nutrimax.ge Tel: 2910345; Pixel Center, 8th Floor, 34, www.silknet.com Chavchavadze Ave. Wissol Georgia Tel: 2243111 www.ggi.ge Paine Stevens LLC 74b Chavchavadze Ave. 1 Ivane Javakhishvili Sqr. SRG Investments LLC Tel: 2915315; Fax: 2915615 Tel: 2903211, Fax: 2903291 D&KDYFKDYDG]H$YHUGÀRRU www.wissol.ge MAC Georgia www.painestevens.com Tel: 2253581 3 Lado Kavsadze St, 2nd Floor www.silkroad.ge Tel: 2197378 Zarapxana LLC www.macgeorgia.org 15 Lubliana St. PASHA Bank Georgia JSC Tel: 2510001 2 Leonidze St. / 1 G.Tabidze St. T3Concept Ltd. www.zarapxana.ge QSI International School of Tel: 2265000 13 Radiani St., 0179 Georgia www.pashabank.ge Tel: 2434455 Village Zurgovani, Tbilisi www.turner.com, www.t3concept.ge Tel: 2537670; Fax: 2322607 www.qsi.org NON-PROFIT ORGANIZATIONS Policy and Management Consulting Group (PMCG) TBC Leasing JSC San Diego State University - $JKPDVKHQHEHOL$YHWKÀRRU 8 Bulachauri St., 0161 Agricultural University of Georgia Tel: 2921171 Tel: 2272727 Georgia 5 Kostava St. 0108 www.pmcg.ge www.tbcleasing.ge 140 David Aghmashenebeli Alley Tel: 2311611 Tel: 2594901 www.georgia.sdsu.edu www.agruni.edu.ge Publicis Ltd. Tbilisi View Transparency International 17 V. Jorbenadze St. 4a, Freedom Sq. American Friends of Georgia Georgia Tel: 2745672; Fax: 2745671 Tel: 2999980 77 Nutsubidze St. 61 Agmashenebeli Ave. 0102 www.publicis.ge www.tbilisiview.ge Tel: 2397174; Fax: 2388495 Tel: 2932129 www.afgeorgia.org www.transparency.ge

Qebuli Climate Terabank JSC CENN Union of Busines Ladies 101, Tsereteli Ave. 3 Ketevan Tsamebuli Ave. 27 Betlemi St., 0105 8 D. Gamrekeli St., 0194 Tel: 2356201 Tel: 2507700 Tel: 2751903 Tel: 2308661 www.qebuli.ge www.terabank.ge www.cenn.org www.ubl.ge

FEBRUARY-MARCH 2020 Investor.ge | 61 NEWS

BACK TO BUSINESS COCKTAIL RECEPTION ON JANUARY 17, AMCHAM GEORGIA HOSTED A BACK TO BUSINESS COCKTAIL RECEPTION FOR AMCHAM MEMBERS AT TIFFANY BAR & TERRACE. AMCHAM PRESIDENT, MICHAEL COWGILL GREETED GUESTS AND THANKED TIFFANY BAR & TERRACE FOR HOSTING THE RECEPTION. MR. COWGILL INFORMED GUESTS ABOUT AMCHAM’S UPCOMING EVENTS. THE RECEPTION WAS ATTENDED BY AMCHAM MEMBERS, FRIENDS AND HEAD OF FOREIGN DIPLOMATIC REPRESENTATIONS. MEMBERS USED THE OPPORTUNITY TO RECONNECT WITH EACH OTHER AFTER THE LONG HOLIDAY SEASON.

62 | Investor.ge FEBRUARY-MARCH 2020 NEWS

ON DECEMBER 13, AMCHAM GEORGIA HOSTED A MEMBERS APPRECIATION HOLIDAY RECEPTION AND NETWORKING EVENT AT TBILISI MARRIOTT. “IT’S BEEN A WONDERFUL YEAR FOR AMCHAM WITH MORE EVENTS AND MORE INITIATIVES”, AMCHAM PRESIDENT MICHAEL COWGILL SAID WHILE GREETING GUESTS AND BRIEFLY HIGHLIGHTED THE ACHIEVEMENTS AND CHALLENGES OF THE PAST YEAR. GUESTS WERE WELCOME TO ENJOY MULLED WINE, COCKTAILS AND GEORGIAN WINE ALONG WITH DELICIOUS HOLIDAY FOOD AND DESSERTS. MEMBERS USED THE OPPORTUNITY TO RECONNECT WITH FRIENDS AND COLLEAGUES.

FEBRUARY-MARCH 2020 Investor.ge | 63 NEWS

Board Of Directors 2020

R. MICHAEL COWGILL PRESIDENT

SARAH WILLIAMSON IRAKLI BAIDASHVILI LASHA GOGIBERIDZE FIRST VICE-PRESIDENT VICE-PRESIDENT & TREASURER DIRECTOR

BADRI JAPARIDZE STEVE JOHNSON OTAR KIPSHIDZE DIRECTOR DIRECTOR DIRECTOR

AmCham Executive Director Writers George Welton Lika Jorjoliani, Josef Gassmann, Sally White, Andrew Weston Braun, Taylor Margvelashvili Editor in Chief Ari Neumann Special thanks to all the contributors to the magazine, especially our member Copy Editor companies for their contributions, AmCham Georgia staff and all our Taylor Margvelashvili contributors. Marketing & Promotion This magazine would not be possible without your help. Nini Kapanadze Promotional Design Levan Baratashvili Magazine Design and Layout Giorgi Megrelishvili 64 | Investor.ge FEBRUARY-MARCH 2020 NEWS

SERGI KOBAKHIDZE KETTI KVARTSKHAVA ANN DAVIES DIRECTOR DIRECTOR DIRECTOR

SANDRO SHELIA BETSY HASKELL, DIRECTOR FOUNDING ADVISOR

GEORGE WELTON ELIZABETH ROOD EXEC. DIRECTOR EX-OFFICIO MEMBER

AmCham Georgia Patron Members:

© The American Chamber of Commerce in Georgia, 2018 arising from the use of any product or service advertised within All rights reserved. No part of this magazine may be re-printed, or the pages of this issue. reproduced or utilized in any form or by electronic, mechanical Investor.ge is printed by CEZANNE or other means now known or hereafter invented, including AmCham Georgia: photocopying and recording, or in any information storage or rd retrieval system without permission. 36a Lado Asatiani Street, 3 ÁRRU7HO 7KHRSLQLRQVH[SUHVVHGLQWKLVPDJD]LQHGRQRWUHÁHFWWKHRSLQLRQ [email protected] of the American Chamber of Commerce in Georgia nor its Board HGLWRU#DPFKDPJHɕZZZDPFKDPJH Members or staff, unless otherwise stated. AmCham Georgia neither endorses, nor can be held liable for any eventuality www.investor.ge FEBRUARY-MARCH 2020 Investor.ge | 65

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