Investment Climate & Opportunities in Georgia 2019

INVESTMENT CLIMATE &
OPPORTUNITIES IN GEORGIA 2019

GEORGIA
COUNTRY OVERVIEW
Area: 69,700 sq. km

Population: 3.7 mln GDP 2018: USD 16.2 billions
Life expectancy at GDP real growth rate 2018:
74 years 4.7 %
birth 2018:
GDP CAGR 2013-2018 (GEL): 4%
Georgian
Literacy: GDP per capita 2018: USD 4346
99.8 %
Inflation rate (December) 2018 (Y-o-Y): 1.5%
Capital: Tbilisi
Total Public Debt to Nominal GDP (%) 2018: 42.2%
Currency (code): Lari (GEL)

2
OPPORTUNITIES IN GEORGIA
ADVANTAGES OF INVESTMENT CLIMATE IN GEORGIA
A politically stable investment destination
Efficient, pro-business and corruption-free government
Free trade agreement with 2.3 billion markets
Competitive cost of labor and energy
Entry gate between Europe and Asia
Stable Macroeconomic situation and solid sovereign balance sheet
Simple, low and efficient taxation
7th easiest country to do business in

(World Bank’s Ease of Doing Business Report 2020)
6th safest country in the world

(Numbeo’s Crime Index, 2019)
BB BB Stable Ba2 Stable

3
GEORGIA RANKS 7TH IN DOING BUSINESS REPORT
Country’s impressive progress in improving business climate has been well

documented in a number of international indices
STARTING A BUSINESS REGISTERING A PROPERTY
New Zealand 1 New Zealand 2

GEORGIA 2 Rwanda 3
Canada 3 Lithuania 4
Hong Kong Sar, China 5 GEORGIA 5
UK 18 Singapore 21
Ireland 23 Latvia 25
China 27 China 28
Korea, Rep. 33 Canada 36
Denmark 45 United States 39
United States 55 Turkey 27
Turkey 77 Ireland 60
Germany 125 Germany 76
Poland 128 France 99
Source: 2020
(Rank out of 190 countries)

4
BUSINESS CLIMATE IN GEORGIA
Liberal and free market-oriented economic policy is strengthened by the rule of law
RULE OF LAW INDEX INDEX OF ECONOMIC FREEDOM
Denmark 1 Singapore 2
United Kingdom 11 The Netherlands 13

Up from 99 in 2005
Singapore 13 GEORGIA 16
Poland 25 Sweden 19
GEORGIA 38 Germany 24
Greece 39 Armenia 47
Hungary 50 Kazakhstan 59
Bulgaria 55 Azerbaijan 60
Macedonia 57 Turkey 68
Ukraine 77 France 71
Russia 89 Russia 98
Turkey 101 China 100
Source: Source:
2017-2018 (Rank out of 113 countries) (Rank out of 180 countries)

5
CORRUPTION FREE COUNTRY
Georgia is considered to be an essentially corruption-free investment destination
ABSENCE OF CORRUPTION RANK CORRUPTION PERCEPTIONS INDEX
Denmark 1 Denmark 1
Sweden 3 Sweden 4
Poland 36
Poland 21 41
GEORGIA
Portugal 22 South Korea 45
Spain 23 Italy 53
Romania 61
GEORGIA 24
Hungary 64
South Korea 29 Bulgaria 77
Hungary 53 Turkey 78
Armenia 105
Turkey 57
Ukraine 120
Russia 68 138
Russia
Ukraine 108 Azerbaijan 152
Source: The World Justice Project, Rule of Law Source: Transparency International, Global Corruption
Index 2019 (Rank out of 126 countries) Barometer 2018

6
ECONOMIC STRUCTURE AND TRENDS
REAL GDP GROWTH RATE, Y-O-Y (%) GROWING GDP PER CAPITA (USD)
8.0% 7.2%
5,000
7.0% 6.4% 4,341 4,438 4,346
6.2% 4,500 4,250
4,047
3,844 3,755 3,857
6.0% 4,000
4.6% 4.8% 4.7% 3,500
5.0% 3,073
3,000
4.0% 3.4%
2.9% 2,500
2.8%
3.0% 2,000
2.0% 1,500
1,000
1.0%
500
0.0% -
2010 2011 2012 2013 2014 2015 2016 2017 2018 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Geostat Source: Geostat, MOF
DIVERSIFIED NOMINAL GDP IN 2018 FAVORABLE PUBLIC DEBT SITUATION

Hotels and Other sectors
restaurants 2%
Financial Trade; repair of
3%
intermedia on goods
5% 17%
Educa on
Total Public Debt to Nominal GDP (%) External Public Debt to Nominal GDP (%)
5%
Health and social
work 50%
6% 42.6% 43.1% 43.4%
45% 41.0% 42.4%
39.4%
40% 36.5% 35.7%
34.9% 34.7%
Agriculture, hun ng and
forestry; fishing 8% 35% 31.2%
Industry 17% 35.5% 35.4%
30% 35.1%
33.6% 32.5%
31.7%
25% 28.8% 27.6% 27.2% 26.9%
Public 20% 23.5%
administra on 15%
8%
Transport and 10%
comunica on 5%
Construc on 10%
9% 0%
Real estate, ren ng and
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
business ac vi es 10%
Source: Geostat Source: Geostat, MOF

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FOREIGN DIRECT INVESTMENT
Georgia has signed Bilateral Investment Treaties (BIT’s) with 33 countries and is a
member of ICSID Convention since 1992
FDI amounted to USD 1.265 billion in 2018
FDI BREAKDOWN BY SECTORS FDI BY YEARS

2018 (%)
Hotels and restaurants 2,500 20%
6% Financial
Real Estate sector 17% 18%
10% 21% 1,963
2,000 1,837 16%
1,765 1,729
1,650 14%
1,575
12% 13%
1,500 12% 12%
Construction 11% 11% 1,265
1,134 10%
14% 1,048 1,039
Transports and 1,000 866 8% 8% 8%
communicatio 7%
667 6% 6% 6% 6%
ns
13% 500 4%
2%
Other sectors Energy sector 0 0%
15% 10% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Manufacturing
11% FDI FDI as % of Nominal GDP
Source: Geostat Source: Geostat

8
PREFERENTIAL TRADE REGIMES
Deep and Comprehensive Free Trade Area Very simple and service oriented
(DCFTA) with EU customs policy and administration
Free Trade Agreement with the People’s – customs clea rance in 5-6 minutes
Re pub lic of China (Including Hong Kong) 80% of goods are free from import
Free Trade Agreements (FTA) with EFTA tariffs
Countries (Iceland, Norway, Switzerland,
No quantitative restrictions
and Liechtenstein), Ukraine, Turkey and CIS
countries
GSP agreement with USA, Canada and Japan

Member of WTO
Georgia
FREE TRADE
AGREEMENTS WITH
~ 2.3 BILLION MARKET
AND ACCESS WITHOUT
CUSTOMS DUTY
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TAXATION IS SIMPLE, LOW, EFFICIENT AND FAIR
Taxes
0% or 15%
Personal Income Tax 20%
VAT 18%
Customs/Import Tax 0%, 5% or 12%
Excise Tax Depends on goods
Property Tax Up to 1%
Pension Contribution - 2% paid by Employer, 2% paid by Employee, 2% by Government
No wealth tax and inheritance tax
Personal income tax for interest, dividend, royalty – 5%
Foreign-source income of individuals fully exempt
No restrictions on currency convertibility or repatriation of capital & profit
Double taxation avoidance treaties with 56 countries

10
0% CORPORATE PROFIT TAX
Under previous legislation When profits are earned
According to new legislation When profits are distributed
Non-arm’s length cross-border transactions with related parties
Non-arm’s length transactions with related persons not covered under the new system

11
GEORGIA HAS YOUNG,
SKILLED & COMPETITIVELY PRICED LABOR FORCE
UNEMPLOYMENT YOUNG LABOR AVERAGE MONTHLY

RATE SALARY IN 2018
12.7% 56% 422 USD LABOR

of unemployed population including white and blue
CODE
are in 20-40 age category collar workers
Around 60% of young population According to Heritage Foundation,

and 40% of overall population know Georgia ranks 20 th globally on Labor
English Freedom Index
by Georgia

12
TRANSPORT NETWORK IN GEORGIA
Poti Sea Port
Port has 15 berths Total Length: 20 thousand km
Depth: 8-11m Capacity: min. 8-10 thousand motor vehicles per day,
Annual Capacity: 4 mln tons of dry cargo, 1 mln tons max. 50 thousand motor vehicles per day (highway)
of oil products, 1.0 mln. Ferry cargo, 500,000 TEU 190 km new Highway constructed
APM terminals
Tbilisi international airport
Batumi Sea Port 3,164,139 passengers in 2017
Port has 11 berths
Depth: 9-12m Batumi international airport
Annual Capacity: 15 mln tons of oil products, 2 mln 495,668 passengers In 2017
tons of dry cargo, 0.7 mln. tons Ferry cargo, 100,000
TEU, 180,000 passengers Kutaisi international airport
JSC KazTransOil 405,173 passengers in 2017 (incl.
low-cost airlines)
Kulevi Oil Terminal Gantiadi
Sokhumi
Crude oil, petroleum and lubricants RUSSIA
Capacity 6mln. t/year Mestia
Lars
State Oil Company of Azerbaijan Zugdidi Ambrolauri
Roki
Anaklia
(SOCAR)
Senaki
Kulevi
Kutaisi
Tskhinvali
Supsa Oil Terminal

Zestafoni
BLACK SEA Gori
Poti Baku-Supsa Pipeline (oil)
Telavi
Crude oil Supsa Samtredia Khashuri
Natakhtari
Capacity 8 mln t/year Batumi
Akhaltsikhe Baku-Tbilisi-Ceyhan Tbilisi Lagodekhi
BP
Pipeline (oil)
Sarpi
Red Bridge
Akhalkalaki
Vale Ninotsminda
Depth: 18-20m TURKEY Kartsakhi Zhdanov

Guguti
Sadakhlo
AZERBAIJAN
Annual capacity of the Phase I: 8 mln tons of cargo
ARMENIA
Total investment: 2.5 bln USD Main Road Network Pipelines (Oil)
Railway connection to Anaklia
Phase I: 586 mln USD
Sea ports
Railway (Temporarily Closed) Deep Sea Port (Project)
International Airports
Baku-Tbilisi-Kars Railway (Project)
LTD Anaklia Development Consortium Railway (Temporarily Closed)
Domestic Airport
Anaklia Deep Sea Port
(Project)
Tbilisi and Kutaisi Logistics Centers
(Project)
Road (Temporarily Closed) Sea Ports
Infrastructure: 1 443.2 km (approx. 90% electrified);

modernization in progress (capacity: 28 mln t/year) Oil/Gas Pipelines
Main line Length: 460 km (100% electrified) Baku-Supsa (8 mln t/year)
New railway line Baku-Tbilisi-Kars (BTK) linked to Turkish Baku-Tbilisi-Ceyhan (60 mln t/year)
railway networks: 180 km (capacity: 5-15 mln. t/year)
13
INCENTIVES
Exemptions from all taxes except Personal Income Tax (20%), which is paid from
employees’ salaries
Four Free Industrial Zones (FIZs) operate in Poti (port city), Kutaisi (third largest city)
and Tbilisi (capital)
Free Land
Free Casino License for Hotel with over 80 Rooms
Free lands & buildings for factory construction

Subsidies for loan interest payment
Grants for food processing factories
125 state owned vocational education centers

Most of the course fees are financed by the Government

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ACCESS TO FINANCE
100% state owned investment fund

Operating fields: Energy; Hospitality & Real Estate, Manufacturing, Agribusiness
Finances up to 49% of equity in new investment projects
100% state-owned Joint Stock Company

Mission of JSC “Georgian Energy Development Fund” is to promote realization of country’s
energy potential, retrieval of appropriate funds, by developing projects and their effective
implementation.
Participation in energy projects with projects elaboration (share in projects 30%)
Exit option after commissioning
USD 6 billion private equity fund

Investment sectors: Energy & Infrastructure, Hospitality & Real Estate, Manufacturing,
Agriculture, Logistics
Minimum Project Size: USD 5 M
GCF equity stake in projects: 25%-100%
European Bank of Reconstruction and Development (EBRD)

International Finance Corporation (IFC)
Asian Development Bank (ADB)
European Investment Bank (EIB)
Overseas Private Investment Corporation (OPIC)

15
INVESTMENT OPPORTUNITIES IN GEORGIA
v
ENERGY
HOSPITALITY &
REAL ESTATE
MANUFACTURING
v
BUSINESS PROCESS
OUTSOURCING
REGIONAL LOGISTICS
16
CORRIDOR
WHY INVEST
IN HOSPITALITY & REAL ESTATE IN GEORGIA
Continuous Increase of International No Real Estate Ownership Restrictions

Visitors Availability of Government Incentives
Unique Nature and Culture Visa Free Regime with 98 Countries
Various Types of Resorts and 6th safest country in the world
Investment Opportunities (Source: Numbeo’s Crime Index 2018)

17
NUMBER OF INTERNATIONAL TRAVELERS HAS
BEEN GROWING RAPIDLY
10
9
8 8.7
7.9
7 6.7
5.9 6.3
6 5.7
5 4.7 +10%
4
3
2
1
0
2012 2013 2014 2015 2016 2017 2018
Source:
TOP COUNTRIES BY INTERNATIONAL

ARRIVALS IN 2018
Georgia has proved to be a highly
desirable location for the hospitality 8%
and real estate sector
25% Azerbaijan
Average duration of stay (International 20%
Turkey
visitors) - 4.3 nights, ave rage spend -
Russia
~430 USD
Armenia
Number of international tourist arrivals
22% EU
is expected to grow by 8-10% during 25%
International)

18
HOSPITALITY & REAL ESTATE INVESTMENT
OPPORTUNITIES
Home to more than 12,000 historical and cultural monuments including

several UNESCO World Heritage Sites
8 national parks and 84 different categories of protected areas
“SUN-BEACH” MEDICAL & WELLNESS

WINTER SKI RESORTS GAMBLING
RESORTS RESORTS RESORTS
Mixed and all- Winter resorts Majestic landscapes Unique water Development of
inclusive seaside with wide range of allow four season and mud large-scale
resorts activities including tourism activities resources provide integrated casino
freeride and heli- opportunities complex
skiing for SPA resort
development
LOCATIONS
Batumi Mestia Mestia Tskhaltubo Batumi

Gonio Bakuriani Bakuriani Akhtala Anaklia
Anaklia Gudauri Goderdzi Borjomi Tbilisi
Kobuleti Goderdzi Kazbegi, etc. Abastumani, etc. Tskaltubo
Other Black Sea Bakuriani
locations Sighnaghi
Kobuleti, etc.

19
OVERVIEW OF
GEORGIA’S MANUFACTURING SECTOR
and various regional import substitution opportunities
Access to 2.3 billion markets without Customs Duty - Georgia has Free Trade Agreements (FTA) with
Turkey, Ukraine, EFTA and CIS countries, Deep and Comprehensive Free Trade Area (DCFTA) with EU
and FTA with the People’s Republic of China (including Hong Kong)
Competitive labor costs - the avera gemonthly salary in manu facturing industry was 360 USD (2018)
including white andblue-collar workers
Low utility costs - currently up to 80% of power is generated via hydropower plants leading to cheaper energy cost.
Electricity costs for industrial consumers is 0.06 per kWH
4 Free Industrial Zones (FIZ) - In FIZ, businesses are exempt from all taxes except Personal Income Tax
(20%), which is paid from employee salaries
R U SS I A
Anaklia
BLACK Poti
SEA
Batumi
TURKEY
AZERBAIJAN
ARMENIA

20
SEVERAL HIGHLY ATTRACTIVE REGIONAL
PRODUCTION OPPORTUNITIES
APPAREL, FOOTWEAR
AND BAGS
AUTOMOTIVE AND
AEROSPACE COMPONENTS
FURNITURE
PHARMACEUTICALS
CONSTRUCTION
MATERIALS
PLASTICS

21
BENCHMARK ANALYSIS OF GEORGIA WITH
COMPETITOR COUNTRIES
Average Gross Salary in Manufacturing Sector, 2018 Total Tax & Contribution Rate (%)
1414
USD
40.5 40 41.7 40.9

37.8
1011
360 362 243 9.9

Georgia Moldova Romania Ukraine Vietnam Turkey
Construction costs per square meter, 2017 Electricity Tarrifs, 2018

USD
USD
0.11
0.1
0.07 0.07
0.06 0.06
Source: KPMG; PWC, World Bank

22
WHAT INVESTORS THINK ABOUT MANUFACTURING
IN GEORGIA
“Georgia has transparent business climate, growing economy, acceptable

labor cost and simple legislation” –
manufacturing capabilities are attracting high-tech businesses to

Georgia“ -
“Favorable Geographic Location, transparent tax system, stable

macro-economic environment, and free trade agreements with
neighboring countries and EU led to the birth of steel factory in
Georgia” –
“HeidelbergCement invests in Georgia because of its business

friendly environment, attractive tax regime and highly developed
and reliable infrastructure” –

23
BUSINESS PROCESS OUTSOURCING (BPO) IN
GEORGIA
56% of the unemployed population is in 20-40 age category
Average gross monthly salary for BPO sector is 500 USD
YOUNG, ENERGETIC During last 5 years 127,950 students graduated from Higher
AND COMPETITIVELY education programs
PRICED LABOR FORCE According to BPO Sector Research prepared by Deloitte talent
pool for BPO sector within the age range 20-45 amounts to 271
thousand.
Georgia has literacy rate of 99.8% and 92% of population with at

least secondary education
Georgia has 62 higher educational institutions and over 66
professional education centers which ensure constant flow of
EDUCATION high quality professionals every year
Social sciences, business and law, humanities and arts are the
most popular faculties
Georgia provides vocational education training and most of the
course fees are financed by the state
Strategically located where the two continents meet (GMT+4),

Georgia is well positioned to service all countries from Europe
TIME PROXIMITY AND to Central Asia
CULTURAL SIMILARITIES Georgia has unique perspective and language skills to service
WITH TARGET MARKETS Russian speaking countries
Vast majority of younger population speaks fluent English. Russian
and German are 2 nd and 3rd most frequent foreign languages
Based on competitive advantages, functions like F&A, CRM and

many more could be outsourced from Georgia, giving investors
ATTRACTIVE high returns on investment
INVESTMENT
OPPORTUNITIES With good quality of life, availability of high class offices and
good infrastructure (utilities, internet, telecom, etc.), Tbilisi,
Kutaisi and Batumi could be ideal destination for BPO centers

24
DEVELOPED INFRASTRUCTURE AND FAVORABLE
BUSINESS ENVIRONMENT
FAVORABLE LABOR AND INFRASTRUCTURE &
TAX LEGISLATION BUSINESS COSTS
No minimum wage regulations - compen - High class, modern office spaces are
sation for labor depends on the agreement available in all major cities of Georgia,
between employee and employer with almost 1 mln. sq.m. of office stock
Personal income tax paid from salary is High speed broadband and mobile internet
flat 20% is available throughout whole country,
Georgia ranks 15 th in the world in terms
Georgia provides a profit tax exemption to
of internet affordability
legal entities of a “virtual zone” (engaged
in export of IT services) Utilities costs are one of the lowest in the
wide region, approximately 2.3 USD per sq. m.
No working permits are required
Citizens of 95 countries can stay in Georgia
without visa during whole 1 year, which
helps attracting professionals from other
countries in the wider region.
Georgia has one of the most liberal labor
codes not only in the region, but globally.
Georgia ranks 20 th in Labor Freedom Index
(Source: The Heritage Foundation, Index
Of Economic Freedom 2019)

25
INVESTMENT OPPORTUNITIES
CONSIDERING COUNTRY’S COMPETITIVE ADVANTAGES, DELLOITE RESEARCH
ON BPO&SSC INVESTMENT POTENTIAL HAS REVEALED 5 SEGMENTS WITH
THE HIGHEST POTENTIAL
F&A ITO
F&A service segment has matured with a steady supply The Georgian market has the highest labor supply
of experienced employees. 20000 students graduated in IT support and infrastructure specialists followed
from F&A related programs in last 5 years with over 900 by system administrators commonly with MySQL
ACCA and 200 CFA students registered in Georgia. knowledge and developers working in Java, .Net and
PHP
Most common services are Tax Accounting and
Declaration for local market while financial analysis Georgia has one of the lowest salaries for IT Support
and transactional processes are requested services by Specialists with comparatively low costs per FTE in
International clients, mostly from Azerbaijan, Armenia, IT outsourcing amounting USD 1003;
Turkey, Ukraine, Russia, Italy and France.
There over 24000 specialists working in the sector
Georgia is competitively ranked for senior level staff within 20-45 age range, out of which, approximately
positions and sits at the top of the countries that have 5000 are working in Application Development.
low costs per FTE amounting USD 655.
Companies exporting IT related services can benefit
with profit tax exemption.
CALL CENTERS AND CRM
CRM in Georgia is the most developed among the BPO
segments with a number of relatively large call centers. ADE
Existing CRM companies mostly provide customer
support and telemarketing services in 10 languages. ADE segment has the highest turnover out of all
the service areas at USD 144 million and has been
The segment has the highest potential of serving CIS growing at a rate of CAGR 4% over the past 5 years.
and European countries with time proximity and skilled
workforce in combination with the one of the lowest Based on the survey results, there are 23000 people
average cost per FTE amounting USD 567. employed in ADE sector mostly concentrated in
Tbilisi and Batumi with 12000 and 7000 employees
HRO respectively.
HR outsourcing is relatively nascent and mostly Georgia has recorded the lowest salary levels for
represented as secondary function inside service CAD/3D specialists and, is among the highest
provider companies. salary levels for Interior and Product Designer
30000 students graduated with Law and Social Science professionals.
degrees in the last five years which represent main
education areas for HR specialists.
Georgia has a distinct competitive advantage in terms
of average cost and senior level human resources Information is based on Deloitte’s research
personnel wage ranges for HR outsourcing with 680 on BPO&SSC potential & labor survey.
USD average cost per FTE. For the full report, please contact us

26
OVERVIEW OF GEORGIA’S LOGISTICS SECTOR
TRANS-CAUCASIAN ROUTE
Attractive gateway between Europe and

Central Asia
Leveraging its location, Georgia’s
transport economy can benefit from
large addressable transit flows, growing
economies and landlocked resources
Compared to alternative routes, Georgian
Ports are cost-competitive
FDI inflows in the transport and
communication sector have primarily
targeted transport infrastructure
Around 60% of all types of overland
international freight throughput are
transits
TRANSPORT INFRASTRUCTURE
Rapidly developing road infrastructure

Development of new port in Anaklia along
with Anaklia City
Direct connection with European and
Central Asian railway networks (Baku-
Tbilisi-Kars project)

27
MAJOR ONGOING PROJECTS
Anaklia Deep-sea Port

Poti
Tbilisi
Batumi
BTK
DEVELOPMENT OF DEEP-SEA PORT DEVELOPMENT OF BAKU-TBILISI-

IN ANAKLIA KARS RAILWAY (BTK) ANAKLIA
Government of Georgia plans to develop the The new railway line BTK (USD 775 millions)
infras tructure of new deep-sea port, which has from the Caspian Sea to Europe was
a 16 m natural draft and possibility to receive completed in 2017
the fifth-generation vessels such as Panamax
Port will be focused on containers and bulk/

mixed cargoes

28
GEORGIA’S EXISTING TRANSPORT ECONOMY IS
ALREADY TRANSIT BASED – CROSS-BORDER ROAD/
RAIL SHIPMENTS AND PIPELINES HAVE TRANSIT
RATIOS OF ~65% AND ~95%
MODAL SPLIT TRANSPORT VOLUME BY PURPOSE TRANSSHIPMENT RATIO &
MILLION TONS
Transit Import Export

Transit Import Export
Transit Import Export Containers

3.1 1.8 0.5 5.4 68%
3.1 1.8 0.5 5.4 68%
Transit Import Export such as manufactured
ROAD goods, food
3.1 1.8 0.5 5.4 68%
3.1 1.8 0.5 5.4 68%

8.2 0.8 0.2 9.2 89% Oil (KZ) and oil products
8.2 0.8 0.2 9.2 89% Grain (Central Asia)
Metals and minerals
8.2 0.8 0.2 9.2 89% (Central Asia)
Containers
RAIL 8.2 0.8 0.2 9.2 89%
35.4 1.7 0.3 37.4 94.6%
35.4 1.7 0.3 37.4 94.6%
35.4 1.7 0.3 37.4 94.6%

Oil & Gas (8Bln m3) from
KZ and AZ (BTC, WREP
35.4 1.7 0.3 37.4 94.6% (Supsa)), SCP, NS
PIPELINES

29
SILK ROAD
AND CAUCASIAN CORRIDOR
Transit time 11 days in comparison with 45 days via the sea route
Stuttgart
Druzhba
Odessa
Galata
Aktau
Burgas Khrogos
Alat
Istambul
Turkmenbashi
Izmir Astara
Mersin Anzali Amirabad
Lianyungang
Shanghai
AZERBAIJAN, IRAN,
Bandar Abbas
Dubai
GEORGIA AND UKRAINE

ELABORATED NEW Mumbai
TARIFF POLICY FOR

THE DEVELOPMENT
OF PERSIAN GULF –
BLACK SEA CORRIDOR

30
OVERVIEW OF
GEORGIA’S ENERGY SECTOR
Domestic Demand growth, which is growing faster than the

STRONG DEMAND GROWTH GDP, is expected to almost double by 2030, from current
consumption of 13.4 TWh
PROSPECTS
Majority of economically viable energy potential is not yet

exploited (Approximately 30TWh)
HUGE UNTAPPED Georgia has more than 20,000 rivers and almost 300 of them
POTENTIAL provide excellent opportunity for hydropower generation.
In addition to hydro, there is considerable generation potential
from wind, solar and other renewable sources
Renewable projects are based on Build-Own-Operate (BOO)

principle
No tariff set for the newly built Renewable energy Plants.
DEREGULATED MARKET investor is free to trade on open market and negotiate the price
Georgia is member of Energy Community, bringing it’s market
rules in line with EU standards
Energy sector is second largest recpiend of FDI over last 5

years, Creating more than 13,000 jobs
ENERGY SECTOR HAS 43 Hydropower plant projects are on the construction and
BEEN ATTRACTING MAJOR licensing phase - Total installed capacity of 1,459 MW and
Total Planed Investment of over 3 bln.USD
Huge international companies have entered Georgian energy
maket, with TATA Power (India), K-Water ( Korea), Clean Energy
(Norway) and many more investing.

31
DOMESTIC DEMAND GROWTH REQUIRES AN
EXTENSION OF POWER GENERATION
19.7 2.8
Domestic demand and High
1.8 1.8 scenario
Supply projections
TWh
Low
17.9 1 scenario
12.1 4.8
Current Generation of Project demand Projected Deficit

Electricity Soon to be 2025 By 2025
Generation finished HPP’s
Georgia’s demand for electricity is increasingeven faster than expected GDP growth, requiring more HPP
generation capacity
Even after completing Power Plants that are under development, demand will be higher than supply
1
High scenario assumes 5.7% CAGR of demand, low scenario assumes 4.3%

32
INVESTMENT OPPORTUNITIES
HYDRO POWER
Georgia is one of the top countries in terms of water resources
per capita
Today up to 80% of total electricity is generated from Hydro
Power Plants
New HPPs have priority access to transmission line to Turkey
Generation and Export activities are exempted from VAT
HPPs smaller than 13 MW don’t need generation license
HPPs smaller than 2 MW don’t need the Environmental Impact
Permit
OTHER RENEWABLE SOURCES

WIND
Wind potential of Georgia is estimated at 4 TWh
Wind power is very important because of higher generation
during winter.
It’s estimated that share of wind power in total generation
will reach 10% by year 2030.
GEOTHERMAL
Georgian geothermal water reserves reach 250 mln. m3 per
year.
where the average temperature of geothermal waters ranges

from 30 to 110 C
SOLAR
In most regions of the country there are 250-280 sunny days
in a year, which is approximately 1,900-2,200 hours per year

33
ENTERPRISE
GEORGIA INVESTORS
LEPL “Enterprise Georgia” operates under

the Ministry of Economy and Sustainable
Development LOCAL
ENTERPRISE
“One-stop-shop” for investors to support COMPANIES
companies before, during & after
GEORGIA
investment process
Moderator between investors,
government and local companies
GOVERNMENT
Mission:
OUR SERVICES
Information Communication Aftercare
General data, statistics, Access to Government at all levels Organization of site visits and Legal advising &
sector researches & connection to local partners accompanying of investors Supporting services
ENTERPRISE GEORGIA
18 Uznadze str. 0102 Tbilisi, Georgia
Tel: (+995 32) 2 960 010
E-mail: info@enterprise.gov.ge

34
FOR NOTES

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ENTERPRISE GEORGIA 2018
18 Uznadze str. 0102 Tbilisi, Georgia
E-mail: info@enterprise.gov.ge
Tel: (+995 32) 2 960 010
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Investment Climate & Opportunities in Georgia 2019

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Investment Climate & Opportunities in Georgia 2019

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INVESTMENT CLIMATE &

OPPORTUNITIES IN GEORGIA 2019

Area: 69,700 sq. km