Why a Georgian businessman is investing $600 million in Armenia
04 September, 2014
Why a Georgian businessman is investing $600 million in Armenia
It became known a while ago through the Armenian media that Anaklia IEP Holding (Industrial Eco Park), heralded by businessman Temur Karchava, who is included in the top 20 list of richest Georgians, will invest USD 600 million in Armenia. A gas-powered station will be built in Vanadzor with this money. The station’s strength will be 540 megawatts and from which, according to Armenian media, electricity will be imported back into Georgia.

Temur Karchava does not own a business in
Georgia. His assets are spread across different countries throughout the world. He became known to the public since he blamed the former President Mikheil Saakashvili in the appropriation of Anaklia Port project. According to the businessman, he got interested with the idea of building a port in Anaklia back in the 1990s. By his initiative, the year of 2001 saw the creation of the deep water port project. In 2009 while in London Mr. Karchava received a call from the President’s Administration of Georgia that was soon followed with a meeting of him and President Saakashvili in Anaklia. According to the businessman, negotiations lasted for two days in Anaklia involving the experts in the process. After the meeting, Saakashvili issued a decree about the construction of the port. The Ministry of Economy allocated 2,100 hectares of land for the construction of the project, for which Temur Karchava’s company “Anaklia-Port” paid GEL 6.7 million. The company began construction activities on the port from September 2010. As the businessman states, works were undertaken within the terms set by the agreement signed with the Economy Ministry. However, all of a sudden, Saakashvili started to speak about building Lazika city and Lazika port in Anaklia. This was followed by unilateral cancellation of the agreement from the part of the Ministry of Economy with “Anaklia Port” Ltd. in March 2011. The Ministry confiscated its part of the purchased land and even filed a lawsuit against the company arguing that it should be fined of USD 100 million for violating the construction terms.

Temur Karchava, businessman:


They created extremely good conditions for us in Armenia for the effective employment of the thermoelectric power station. The Armenian government passed a decree according to which Anaklia IEP Holding is guaranteed that it will be systematically provided with one billion cubic meters of gas, and the electricity generated by it will be exported without a problem. Apart from that, the company will benefit from considerable tax breaks.

– Will the exported electricity enter Georgia?

– As you might know, the construction of a deep water port is planned in Anaklia, where an industrial, free economic zone will be created and an airport will be built, which will require roughly 800 megawatts of electricity a year. If the state agrees, electricity generated by the thermoelectric power station will enter Georgia first of all. So far, the position of the government has not been clear. However, we have other markets for the electricity, including Turkey, Iran and Russia.

– Why did you decide to build a thermoelectric station in Armenia and not in Georgia? Russian gas is more expensive than that of Azerbaijan; and investment of USD 600 million would not really hurt our economy.

– The company will receive the necessary gas from Russia, as well as from Iran the price of which equals USD 185 for 1,000 cubic meters. Armenia has signed an agreement with Iran and Russia according to which it will receive an unlimited supply of required gas volume for the next 20 years. Mainly this gave us the motivation to build a thermoelectric power station in Armenia. But I should say that Georgia was considered as a future location as well. We introduced our ambitions and projects to the government of Georgia. One of such thermoelectric station was supposed to be built in Anaklia with the strength of 220 megawatts. Two gas turbines, each of 275 megawatts would be installed in Gardabani. And one more would be working on coal in Tkibuli. Total power generated by theses four stations would equal to 1,000 megawatts. But the government refused the project for unknown reasons. Georgia lost the opportunity to generate jobs and financial energy with this decision.

– Did the government know of the Georgian company’s large-scale investment in Armenia?

– I am a free businessman. I have never depended on any government… My last business visit in Armenia was on 14 August. There I met Georgian Prime-Minister accidentally in Hotel Marriott. That’s how the Georgian government learned about the investment.

– Is the legal dispute between “Anaklia-Port” Ltd. and the state still ongoing?

– Fines that were imposed on “Anaklia-Port” by the previous government for alleged failure to meet the obligations were lifted off. Now the returning of company-owned lands is on our agenda. This constitutes 2,100 hectares of land which belonged to the company and it is where the port was supposed to be built. The issue should be considered by the court; however, the government has the right to return the land to us. If the government wishes, the construction of the port can be started in six months.

– What will be your next step if the government does not return the disputed land?

– I will appeal to the International Court of Justice. This is a matter of principle.

– How did your relationship with Saakashvili end? Have you met him since he stole the idea of Anaklia port?

– I have met him lots of times accidentally, either at the Patriarchate or in Anaklia, but every time he would see me, he would evade me, not even saying hello. I think he was ashamed, but he did not change his behavior.
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