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Investment opportunities in Georgia Heidi Eterovic, UNDP Georgia

Investment opportunities in Georgia Heidi Eterovic, UNDP Georgia Sophia Kenchoshvili, Georgian National Investment Agency. Country overview: Population: 4.6 mln Capital: Tbilisi Area: 69,700 sq km (26,911 sq miles) Life expectancy: 69 years (men), 77 years (women) (UN)

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Investment opportunities in Georgia Heidi Eterovic, UNDP Georgia

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  1. Investment opportunities in Georgia Heidi Eterovic, UNDP Georgia Sophia Kenchoshvili, Georgian National Investment Agency

  2. Country overview: • Population: 4.6 mln • Capital: Tbilisi • Area: 69,700 sq km (26,911 sq miles) • Life expectancy: 69 years (men), 77 years (women) (UN) • Monetary unit: Georgian Lari (GEL) • GEL/US$: 1.6500, GEL/EUR: 2.1264 • 2008 GDP: US$ 12.8 bn • 2008 GDP per capita(PPP): US$ 4,851 • Real GDP Growth: 2% in 2008, 12.4% in 2007, 9.4% in 2006 and 9.6% in 2005 • Inflation rate (e-o-p): 5.5% Source: CIA Fact book, Dep. of Statistics

  3. Why Georgia? • FDI and export promotion #1 priorities of the government • Favorable conditions for business: # 19 by Ease of Doing Business • Strategic location, and liberal trade regimes • Growing ties to the EU • Opportunities in investment and sourcing.

  4. Investment sectors: • Energy sector: government support to renewables • Agriculture sector: organic production, processing • Agriculture sector: sourcing, water, wine • Education, technical consulting and services

  5. State Program: Renewable Energy 2008 • List of 87 sites, capacity ranging from 5 mw- 60 mw • Investors interested are required to submit a standard application form • Will be available for other investors for 30 day period • Bank guarantee in the amount of US 170, 000 per mw of prospective capacity. • The land will purchased at a nominal price • Electricity generated can be sold either domestically or abroad. • Export Markets: • The Georgian power grid is connected to the grids of all neighboring countries and can work in synchrony with Russia and Azerbaijan • Once the HVTL Armenia-Georgia line becomes operational, Georgia will have the ability to export electricitynot only to Armenia, but also to Iran • Prior to that, Turkey and, to a lesser extent, Azerbaijan and Russia, are the most attractive markets for electricity exports • Turkey is the most attractive market to export electricity with the existing 220kV transmission line and DC link – no synchronisation required. Furthermore, once the construction of the 400-500kV transmission line is completed (due tentatively in 2011) capacityfor export will increase drastically

  6. Agriculture sector: 100 new enterprises in rural areas • State will undertake obligation to develop road and amelioration infrastructure • On preliminary stage collection of 100 lots of land an competitive selection of investors will be launched • At the same time upon specific request of investor selection of land necessary for creation of such enterprise will take place • Size of land lot exceeds or matches 200 ha and lot could consist of different partials Criteria for selection: • Payment of maximal price for land partial • The best investment conditions among the candidates Conditions for the winners: • Payment of maximal price and implementation of investment project • In standard case enterprise shall be created during 1 year • Investor pays 20 % of Price • In the investor meets all the contractual demands, rest 80% shall not be paid

  7. Poti Free Industrial Zone: The first industrial zone in the Caucassus region • Location: adjacent to the Poti Sea Port – largest port on the Black Sea • Total Free Zone Area: 300 ha with water frontage of Rioni River and Black Sea on two sides • Logistics: well connected to the highways, railroads and international Tbilisi and Batumi Airports Key investment sectors: • Manufacturing • Small/medium enterprises • Warehouse and container storage • Transport and logistics • High tech industry • Raw material industry • Storage and trade • Maintenance and Reconditioning Advantages of the FIZ in Poti: • Competitive rates of lease of land, warehouse and container storage areas • 100% ownership of companies operating in PFIZ • No foreign exchange controls • 100% exception from profit tax • 100% capital and profit repatriation • No restriction on hiring expatriates • Exempt of VAT payment on import and export of goods • No trade barriers of quotas • Low cost of energy

  8. Contacts: Sophia Kenchoshvili: skenchoshvili@investingeorgia.org Heidi Eterovic: heidi.eterovic@undp.org www.investingeorgia.org www.undp.ge www.agro100.ge www.minenergy.gov.ge www.economy.ge www.investmentguide.ge Thank You!

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