Project ADC I JULY 2018 - HIGH LEVEL DESCRIPTION

Population (2018) 3.73 million

GDP (2017*) US$ 15.2 billion

GDP/Capita (PPP) (2017*) c.US $ 10,600

Real GDP Growth (2017*) + 5.0%

Real GDP Growth (5m 2018*) + 6.1%

Export (2017) US$ 2.72 billion (+29.3%)

Import (2017) US$ 7.98 billion (+9.1%)

FDI (2017) US$ 1.86 billion (+16.2%) EXTREMELY BUSINESS ORIENTED GOVERNMENT: Unemployment % (2017) 13.9% th th th 9 16 8 Inflation % (2017) 6.0% Tax Burden Ease of Doing Freest Sovereign Moody’s rating Ba2 (Stable) Business Economy Level (March. 2018)

(by World Bank) (By the Heritage (By the World Economic Foundation) Forum) *Preliminary data

2 | PROJECT PRESENTATION GEORGIA - CROSSROAD OF EUROPE AND ASIA

● Strategically located on a crossroad of Europe and Asia FTA DCFTA FTA FTA FTA GSP China EU28 CIS EFTA Turkey The USA ● Non-resources based efficiency driven free Hong Kong Canada market economy Japan

● Free trade access to markets with over 2.3 billion population

● The only country in the region that has signed free trade agreements with both the EU and China (incl. HK)

● The EU Associated Country, ongoing approximation of business environment and quality standards to the EU

● Floating exchange rate / no currency conversion regulations

● No restrictions on the import or export of capital

3 | PROJECT PRESENTATION ANAKLIA PORT PROJECT - KEY HIGHLIGHTS

PROJECT SUMMARY ANAKLIA DEEP-SEA PORT

• Public-private partnership with the Government of Georgia (“GoG”) • Build Operate Transfer (“BOT”) with 52-year concession • Up to 9 development phases - 340 ha port development area • 9.3 M ton capacity in Phase 1 • Up to 2000 ha Special Economic Zone (“SEZ”)* adjacent to port • Design Port depth of 16m CD • Able to accommodate vessels up to 10,000 TEU • GoG to receive 2% of port revenues after 20 years • Government providing all hinterland road and rail connections – investment commitment valued at c. USD 120 M

PHASE 1 DEVELOPMENT / FINANCING

“Strategic Project of the Year” • Opening in 2021 - 2016 Global Infrastructure Leadership Forum in • Up to 600,000 TEU initial capacity + 1.5 million tons of dry bulk Washington, DC • Phase 1 development cost c. $ 594 M - 65% debt / 35% equity “Best Investment Project of the Year” - 2016 Dubai Annual Investment Meeting • GoG investment: USD 100M subordinated debt in addition to rail & road investment “Outstanding Conceptual Design” • GoG willing to provide traffic risk guarantee to the senior lenders - BUILD (UK construction industry architectural journal)

• European Fund for Sustainable Development considering to provide traffic risk * SEZ is developed as a separate project with separate shareholding structure mitigation

4 | PROJECT PRESENTATION GEORGIAN PORTS – CONTAINER CARGO TRANSPORTATION TREND

PORT CONTAINER TRAFFIC TEU Oil Crisis, Currency Devaluation by 42%

World Crisis, War with

5 | PROJECT PRESENTATION GEORGIAN PORTS CAPACITY AND EXISTING MARKET GROWTH TREND

PORT CONTAINER TRAFFIC TEU

6 | PROJECT PRESENTATION CURRENT PORT DEPTHS

GEORGIA CURRENTLY CANNOT ACCEPT VESSELS > 1,500 TEU CAPACITY

Vessels up to 10,000 TEU Vessels up to 1,500 TEU

Draft capacity limited by port infrastructure.

Downtime in Draft capacity of Port limits transport 2017 options to only feeder vessels. 33% Feeder vessels encourage “double handling” of cargo, resulting in increased costs

7 | PROJECT PRESENTATION HIGH COSTS AND INEFFICIENCY OF GEORGIAN PORTS

DOWNTIME DAYS THC COMPARISON

Poti endured considerable downtime primarily due to wind and ineffective layout of the breakwaters open to main wave direction. Consistent downtimes and inability to receive large ships significantly affects Terminal Handling Cost. ● 3-day average waiting time.

● Up to 7-day waiting time during bad weather conditions.

● Inefficient/old container handling equipment

● Absence of container yard

8 | PROJECT PRESENTATION GEORGIA - SHORTCUT TO CENTRAL ASIA MARKETS

Primary Market South Caucasus: Georgia, Armenia and Azerbaijan Landlocked 17m population US$ 62 bln. Total GDP +4% average GDP growth outlook Secondary Market Countries of Central Asia and North-West of Iran Landlocked 146m population US$ 655 bln. Total GDP +5% average GDP growth outlook

9 | PROJECT PRESENTATION UPSIDE POTENTIAL

● The shortest route between Europe and Asia

● Transit time of 11 days from North-West China to the borders to Europe

● Georgia is founding member of TITR association

● Integral part of the South-West Transport Corridor

● Significant potential of China not included in the Base case container forecast

10 | PROJECT PRESENTATION PROJECT STATUS UPDATE - CONSTRUCTION

● Construction preparatory works started Dec 2017

● More than 95% completed up to now

● Detailed design started in April 2018

● Marine UXO to be completed in August 2018

● Dredging works contracted to begin in August:

● International tender with leading industry players

● Van Oord was awarded the contract.

● 5,000,000 cubic meters of material from sea bed to construction site

● Installation of wick drains

11 | PROJECT PRESENTATION EARLY WORKS – CONSTRUCTION PROGRESS

12 | PROJECT PRESENTATION ENVIRONMENTAL & SOCIAL PROGRESS

● ESIA and supporting studies prepared according to international standards

● Created by Royal Haskoning and Ecoline International

● Numerous supporting studies prepared: bat, biodiversity, botany, entomology, mammals, etc.

● Resettlement process practically completed

● Successfully managed by National Agency of State Property

● Adequate compensations provided to affected households

● Project is involved in numerous initiatives to provide social benefits:

● Joint CSR program with USAID with a US$ 2 million budget

● English trainings provided to local population

● Local employment preference

13 | PROJECT PRESENTATION STRATEGIC PARTNERSHIPS ALONG THE CORRIDOR

● Significant interest of a number of countries along the ESTABLISHING STRONG RELATIONSHIPS WITH FUTURE PARTNERS middle corridor ● MOUs expressing strong interest signed with a number of key players: ● Constanta Port ● Alyat/Baku Port ● Port of Kuryk ● Aktau Port ● Turkmenbashi Port ● Khorgos dry Port ● Lianyungang Port ● Ongoing negotiations with a number of other projects

● Associated member of TITR since May 2018. Harmonizing tariffs across the route ● GoG strongly believes in the project and is willing to provide a traffic guarantee to the lenders

14 | PROJECT PRESENTATION EQUITY UPDATE

● Equity already invested $ 22.6 million

● Additionally committed by existing shareholders in 2018 $ 35.6 million

● SSA Marine to invest at financial close $ 12.4 million

● Van Oord to provide in kind equity $ 5.2 million

● GoG providing Mezzanine loan $ 100 million

● Negotiations ongoing for the remaining equity requirement $ 32 million

15 | PROJECT PRESENTATION SUPPORTING INFRASTRUCTURE PROJECTS IN GEORGIA

Georgian Railway Modernization East-West Highway Construction

● Annual throughput capacity to double from 27 million ● Over 500km of road construction

tons to 54 million tons ● Connecting Anaklia, , Poti and to Tbilisi ● Works performed by China Railway Construction and beyond

Corporation ● Project completion in 2020

● Project completion in 2019 ● Project costs - over $ 5 billion ● Project costs - $ 450 million

16 | PROJECT PRESENTATION SUPPORTING INFRASTRUCTURE PROJECTS ALONG THE ROUTE

OIL PRICE DOWNWARD DYNAMICS IS RESHAPING REGIONAL PRIORITIE INCREASING CONTAINERIZATION RATE IN CENTRAL ASIA IS FUELING NEW INFRASTRUCTURE DEVELOPMENTS ALONG THE CORRIDOR

Alyat Port Khorgos Dry Port ● ● Completely new port in Azerbaijan On the border of Kazakhstan and ● Full commencement of Phase 1 by end China of 2018 ● Commenced operations 2017 ● ● Capacity Phase 1: 12m tons + 100,000 Capacity: 540,000 TEU TEUs ● COSCO – 24.5%, Lianyungang Port – 24.5% ● All phases: 25m tons + up to 1m TEUs

Turkmenbashi Port Kuryk Port ● New port in Turkmenistan ● New port in Kazakhstan ● Commenced operations in 2018 ● Commenced operation in 2017 ● Capacity: 17m tons + 400,000 TEUs ● Rail and truck ferry terminal ● Capacity 6m tons ● Upgraded Aktau port- capacity reached 20m tons of cargo

17 | PROJECT PRESENTATION THANK YOU FOR YOUR ATTENTION!

www.anakliadevelopment.com

18 | PROJECT PRESENTATION