Statement of the Chief Executive Officer

2013 was the year when PF has made its first successful exit from a completed Project. The purpose of PF is to support development of targeted sectors of the Georgian economy. Based on the abovementioned goal and in order to meet new challenges, the investment strategy was revised to achieve PF’s maximum efficiency.

PF was created on the basis of consolidating the ownership of the largest Georgian state owned enterprises operating in transportation, energy, and infrastructure sectors. These companies are the main source of investment capital of PF. PF’s mandate is triple, to finance projects that contribute to economic growth of the country, focus only on economically feasible projects to increase the value of money invested in the PF and to maintain the sustainability of the projects.

The target sectors of economy for PF are manufacturing, agriculture, real estate, energy and infrastructure. According to its investment strategy, PF acts as a partner for private investors and provides financing for potentially large scale investment projects as a mid to long term financial investor. Our participation is aimed at (a) sharing project/business related initial entry risks with partners and (b) supplementing the required amount of equity. PF participates in green field operations as well as in already existing businesses. PF’s mission is to be a strategic minority shareholder.

In 2013 Partnership Fund has successfully completed and exited from two hospitality (tourism real estate) projects and one agriculture project with an average IRR of 19.7%. In addition, in 2013 PF has completed structuring and resumed construction its first large scale project of Gardabani Combined Cycle Gas Fired Thermal Power Plant. It is also noteworthy that, in early 2013, Fitch has affirmed the rating assigned to Partnership Fund at BB-, which is equal to the Sovereign Credit Rating ceiling of Georgia.

I am confident that these efforts and others currently underway will ensure that PF continues to fulfill its mission in the years to come.