All state funds under one umbrella
17 April, 2014
All state funds under one umbrella
ll state funds of Georgia will be united soon under a new financial institution which will focus on financing big projects that are important to the state. Ex-Prime Minister Bidzina Ivanishvili had already announced creation of a state development bank on the basis of the unification of all state funds. However, the authorities are not certain so far whether or not the new institution will be named as a bank or will remain a fund, Minister of Economy and Sustainable
Development of Georgia said. Officials cannot provide precise details of the new institution until the project is completed. What is clear so far is the general concept of the new financial institute: it will finance long-term development projects and innovations that are not very attractive commercially but appear to be important to the state. It cannot disburse credits to commercial banks or receive deposits. The institute will be regulated by separate legislation and is expected to be operational by the end of this year. The reform project is already underway and will be submitted to the government for discussions in the near future, Kvirikashvili informed on 10 April.
The restructuring of the Partnership Fund of Georgia, handling state assets of strategic importance and aimed at attracting and supporting investments in projects of similar importance, gave impetus to this idea. The PF was set up in 2011 to promote investment in Georgia by providing a maximum of 50% in co-financing (equity, mezzanine, etc.) in projects at their initial stage of development and leave it within 3-7 years from the investment. It co-financed few projects so far out of which three have already been completed [one livestock breeding farm Kalanda, two hotels in the regions Hotel Gino Wellness Spa and Hotel Royal Batoni], while eight projects including infrastructure and energy generation are awaited. Some are already under construction, others are still being researched.
Last spring the Georgian government decided to rebrand the PF into a sovereign fund to make it more effective, however, as the process progressed the reform ended recently in the consolidation of all funds. Georgian economic analysts believe the PF was not effective and also a redundant structure which duplicated functions of the Ministry of Economy such as managing state assets, while the state initiated Investment Fund aimed at the attraction of foreign investments. Besides, Georgia is too small to have that many funds as it has today, they say.
As a matter of fact there are three state-controlled funds in Georgia at the moment. Therefore Ditrikh Muller, co-founder of Georgian Investment Group+, approves of the consolidation of all funds into one financial institution so it will be more effective, especially if it will act as a state development [bank co-investing projects and leaving them after successful exploitation] and will not clash with the interest of commercial banks.
“As to the mandate, this cannot cross with the banking system. This institute should finance long-term development projects that require long-term capital and which projects banks do not finance as a rule,” Kvirikashvili promises.
“Commercial banks in Georgia cannot and do not finance long-term projects, therefore such a bank of financial institution is very much relevant here; to give an impetus to economy and development,” he told Georgian Journal. “I even would approve if this bank would issue securities to boost the securities market and develop investment tools. You know today you hardly find a long-term deposit at Georgian banks; people put money in the banks for a year as a rule. This new state development bank might kindle the securities market too.”
Levan Kalandadze, an economic analyst, believes neither the development bank nor the Partnership Fund may attract investments in the Georgian economy because interested investors find it more profitable to invest elsewhere, other than a state fund. He finds it reasonable to hand over the PF to the Investment Fund instead.

Other Stories
Doing business in Georgia has become easier than in America
According to the Doing Business 2019 report published by the World Bank, Georgia ranked 6th among 190 countries in terms of simplicity of doing business. This was an improvement over two ranks compared to last year.
Problems that foreigners frequently face in Georgia
The importance of Georgia as a tourism hub is growing year after year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
Georgia second among the fastest growing tourist destinations in Europe
Georgia is among the fastest growing tourist destinations in Europe. The data is published by the UN World Tourism Organization.
Bitmain launches world digital mining summit in Tbilisi, Georgia
Bitmain CEO Jihan Wu and Roger Ver, CEO of Head Speaker List featuring Circle, and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23
TBC Bank and Gazelle Finance have teamed-up to support Medical City, a leading healthcare provider in the western region of Georgia to launch the Western Regional Center Of Modern Medical Technologies.
Equivalent to buried treasure – resources that are underused in Georgia
For 2018 the IMF Commission has forecast an annual economic growth for the Georgian economy of about 5,5%.
Does the quality of Georgian wine increase and how the export affects it
If we look at the data collected about modern Georgian wine, we will find out that the Georgian wines produced between 2015-2017 are much better in terms of their quality and Oenologic features rather than the wines produced between 2009-2011.
Japan simplifies the visa requirements for Georgian citizens
Diplomatic and economic relations between Georgia and Japan are now moving to a new phase. Recently Japan has decided to simplify the visa requirements for Georgian citizens.
M&S (Marks and Spencer) and H&M collections to be produced in Georgia
Garments manufacturer MGMTEX will start production of the M&S and H&M trendy collections from this September.
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
Exchange Rates
GEL Exchange Rate
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
November 2018
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30