Investment Activities


Agribusiness
Energy
Manufacturing
Real Estate & Tourism

Georgia’s diverse climate conditions and sound business environment are amenable to the production and processing of a wide diversity of fruit, vegetable and nut crops. Georgia’s proximity and transport links to Europe and other regions, together with growing local and regional demand for fresh produce, make it an attractive agribusiness production and export hub. Georgia offers an abundant supply of competitively-priced water, energy and other utilities. It offers a high economic growth environment, liberal labor regime and competitive labor costs. Georgia’s low and flat taxes provide an advantage to exporters.


All in all, Georgia’s agriculture sector – and agribusiness in particular – remains to be replete with interesting value propositions and fascinating investment opportunities. Domestic demand for high-quality agri-products is growing rapidly, on the back of double digit nominal growth rates enjoyed by Georgia’s economy. Given its progressively more pronounced role as the Regional Hub Economy, Georgia is positioning itself as the platform for businesses – domestic and international alike – wishing to incorporate themselves in Georgia to serve Georgia’s growth market and also neighboring markets, including the European Union with which Georgia signed Deep and Comprehensive Free Trade Agreement (DCFTA).


Involvement with agribusiness in Georgia implies streamlined, conducive and carefully customized tax legislation, supportive government action, relatively quick payback periods, liberal land ownership model and smaller upfront capital investment needs. Upscale potential and economies of scale and scope which can be achieved through reasonable technological innovation and introduction of modern farming, breeding and processing techniques are voluminous.


Partnership Fund is in a position to support commercially viable flagship agriculture projects. This support shall be considered only where given projects cannot be implemented through private action alone; any involvement of the Fund shall be conceptualized and structured bearing in mind exit horizons, financial soundness prerequisites and positive multiplier effects (e.g. "lead by example” implications). Interested investors who believe that their business ideas can be justified on all these grounds are encouraged to approach us with their proposals. Alternatively, they are invited to check our feasibility studies section for ideas of potential interest. Priority shall rest with projects implying agri-processing and production.


Projects:
Livestock Breeding Farm (completed)


In the recent years, Georgia’s energy sector has gone through a thorough overhaul. From electricity importer, Georgia became the electricity exporting country. Georgia currently utilizes around 20% of its hydro power capacity. Greenfield opportunities abound, and these have been attracting significant and increasing amount of investment. Regulatory regime is conducive to development of new generation capacities and mitigating greenfield risks. Given the competitive cost and seasonality of electricity generation in Georgia, the sector is poised to grow fast, to satisfy growing demand for electricity (household and industrial consumption) both inside the country and in the region. With its solid pipeline of hydro power plant (HPP) investments, Georgia’s electricity export capacity is robust, given the vast untapped potential for renewable energy and investor-oriented business environment with clear-cut cost advantages. Turkey is one of the key electricity export destinations, given the tariff structure and countercyclical electricity consumption patterns in Georgia and Turkey: Georgia consumes the bulk of electricity in winter whereas Turkey’s peak demand and consumption are in summer. Framework conditions for the development and growth of the sector are in place, in the form of conducive legal, tax and institutional set-up and the rapidly developing high voltage power transmission infrastructure, of in-country and cross-border significance. Construction of new high voltage power transmission lines, including with Turkey, is well advanced, increasing cross-border transmission throughput capacities and galvanizing investor interest for small, medium and large scale hydro power plants in Georgia. The Government of Georgia’s investor outreach has been proactive, with significant amount of effort deployed to explain hands-on business opportunities and provide aftercare investor services. The Government is also cautious about environmental implications of hydropower plant schemes, seeking stakeholder consultations and emphasizing virtues of corporate social responsibility. Public-private dialogue and involvement of non-state stakeholders allows to build consensus and proceed in a coordinated manner. The bulk of hydro power investment is purely private, i.e. funded exclusively by private investors. Given the strategic importance of the electricity sector in the context of Georgia’s ongoing transformation into regional logistical, economic and trade hub, Partnership Fund is open to discussing strategic forms of public-private partnership in relation to implementation of large-scale greenfield electricity generation schemes wherein public action might catalyze enhanced interest of private investors. Attention here is devoted to credentials of private investors, sound project financials, high quality implementation capabilities of project sponsors and financiers, existence of a sound exit strategy for the Fund and past track record and know-how of private actors. Partnership Fund’s action is driven, first and foremost, by the aspiration to galvanize and crowd in private investment rather than to substitute it.


Projects:


  • Gardabani Thermal Power Plant (ongoing)
  • Neskra HPP (ongoing).

 


Partnership Fund's portfolio incorporates a number of manufacturing-related investment schemes and we are ready to explore further opportunities. E.g. we work to facilitate apparel, yarns and textile production, and we keep our options open with respect to both light and heavy manufacturing wherein Georgia has a pronounced competitive edge.


Vocational know-how, past experience, high literacy rate, good geography, trade openness, relatively cheap labor costs, human talent, niche industry experience, developed infrastructure of in-country and cross-border connectivity, investor friendly low tax environment, reliable and relatively low cost utilities (energy, water etc.) bring down costs of doing business and cut bureaucratic barriers, allowing Georgia to compete regionally and globally. Development of production capacity in Georgia allows to cater for both Georgian and regional markets. Georgia is also an increasingly attractive destination in the context of offshoring, outsourcing and global value added chain management trends. Georgia’s liberal economic model, trade openness, its extensive network of free trade arrangements with the broader region, as well as the deep and comprehensive free trade agreement with the European Union whose negotiation is expected to be completed in 2013 contribute to Georgia’s potential positioning as manufacturing hub for the region.


Partnership Fund is ready to consider investments into manufacturing-related projects with sound business dynamics, financial self-sustainability and employment impact. In so doing, the Fund shall seek to enhance private action rather than to substitute for it.



Partnership Fund’s real estate portfolio targets Georgia’s hotel and tourism infrastructure development. Investment opportunities abound, given natural, geographic and climatic conditions, rich cultural heritage and vast potential for tourism industry / resort development. Real estate development is also at the core of unlocking Georgia’s tourism potential. Through its history, Georgia developed significant niche as one of the key regional tourism destinations (summer, winter, skiing, health, spa, sanatoriums etc). Number of foreign visitors to Georgia has been increasing exponentially in the recent years and reached to 4.4 million in 2012 and 5.4 million in 2013. The Government’s effort aimed at comprehensive urban regeneration, regional development, connectivity infrastructure and urban public space rehabilitation creates conditions and economic momentum conducive to private investment in Georgia’s real estate and tourism infrastructure. Investment opportunities – greenfield and brownfield – abound, in the capital city of Tbilisi and in Georgia’s regions. Government’s significant investment into public infrastructure unlocks opportunities for private investment into real estate and urban renewal, including hospitality and real estate infrastructure investment in relation to seaside and ski resorts, events tourism, eco-tourism, adventure, rural, wine or culinary tourism etc. Georgia is rapidly becoming the regional hub economy which is to serve as platform for doing business regionally. This emphasizes, inter alia, the event tourism function, in turn enhancing virtues of the events tourism and bringing in the need for hotel and tourism infrastructure. With the Government’s pro-active and comprehensive tourism and investor outreach and promotion effort, the hospitality and real estate segments are poised to grow and are replete with significant private investment opportunities. Partnership Fund’s involvement with real estate and hospitality infrastructure is limited to commercially viable schemes with pronounced employment and regional development impacts. Existence of experienced private partner is of the essence as the Fund by virtue of its mandate catalyzes – rather than substitutes for – private entrepreneurship in the given segment(s).


Launched projects within portfolio:


  • Hotel Royal Batoni (completed)
  • Hotel Gino Wellness Spa (completed) 
  • Hotel Rixos Borjomi (ongoing)
  • Hotel in Tsinandali (ongoing)
  • Sairme Resort (ongoing)