FDI in Georgia to Reach More than USD 1.5 billion

By the end of the year, foreign direct investments will stand at more than USD1.5 billion. Economists predict that the increase in investments should be particularly eye-catching in the energy sector and construction in the data of the 3rd and 4th quarters.

According to Q2 official data of 2015, USD530 million worth of direct foreign investments came to Georgia. This was the largest volume in the last six years but the rate of investments failed to affect the rate of GEL and unemployment. Both these issues continue to be major challenges for the Government.

According to the Economic Council of the Government, the Co-Investment Fund is implementing USD2 billion worth of investments in Georgia. The majority of projects will be completed by the end of 2017.

Georgian Co-Investment Fund’s projects include: Mtkvari Hydropower Plant; Oni Cascade of Hydropower Plants; Tskhenistskali Cascade of Hydropower Plants; Dairy Farm and Processing Plant; 35 Ha Greenhouse Development project; A class shopping centre - Galleria Tbilisi; the tallest skyscrapers in Tbilisi AXIS TOWERS; Shekvetili Hotel and Spa Resort; 4 multifunctional complexes of Panorama Tbilisi project; Innovative technologies Data Processing Center; All of these investment projects are already being carried out.

As mentioned above, Georgia’s foreign direct investment amounted to USD 530 million dollars in two quarters, while in 2014 – more than 1.7 billion. Last year, the biggest investors were the Netherlands (26%), Azerbaijan (24%) and China (15%). These three countries accounted for 65% of FDI. USD114 million came from the United Kingdom, USD85 million from Luxemburg, while investments increased from the United States, Turkey and Russia.

Most of the direct foreign capital was invested in transport and communication - USD343 million, which is 27% of the total foreign direct investment. Construction took second place with USD295 million, while the third was the processing industry with USD174 million, followed by the energy sector - USD87 million and the financial sector - USD78 million.

According to government members, a large-scale investment has been made in the energy sector. However, the volume of investments in this sector has been declining for several quarters. A few months ago, the Energy Minister Kakha Kaladze spoke about the investment of USD600 million to enter the energy sector.

The National Statistics Office will release the data of Q3 on December 9th while the results of Q4 will be released in spring 2016.

Ana Akhalaia