Investment News

Investor.ge provides a brief update on investments and changes in government policy that could impact the business environment. Information in this issue was taken from agenda.ge and other sources.

Georgia receives European Commission’s recommendation for EU candidate status
The European Commission recommended that Georgia be granted candidate status to the EU on November 8, marking an important step forward for the country’s European aspirations. Announcing the decision, President of the Commission Ursula von der Leyen said it “fully supports the genuine aspirations of the overwhelming majority of Georgia’s citizens to join the EU.”
A follow-up document released later that day by the European Commission reiterated the assessment of EU Foreign Affairs Representative Josep Borrell that Georgia had delivered on only three of the twelve “priorities” originally set out to obtain candidate status. This report outlined nine areas where Georgia’s progress is expected, including addressing political polarization, assuring free and fair elections in 2024, enacting electoral and judicial reforms, combating corruption, and protecting vulnerable groups, media professionals, and civil society activists. It also called on the Georgian government to ensure the institutional independence of Georgia’s election administration, national bank, and communications commission, and conduct inclusive reforms of the Chief Prosecutor’s Office and the High Council of Justice.
The European Council will hold a formal vote in mid-December to decide whether Georgia will be granted candidate status.

External trade up 16.2% in January-October
Georgia’s external trade turnover amounted to $17.8 billion in January-October, posting a 16.2% YoY increase, Geostat revealed in early November. The value of exports rose by 12.5% and equalled $5.1 billion, while imports grew by 17.8%, amounting to $12.7 billion in the reporting period.
Georgia’s top trade partners in total external trade turnover in the first ten months of the year were Turkey ($2.5 billion), Russia ($2 billion), and the United States ($1.7 billion). The top export items were motor vehicles (34.5% of exports), copper ores and concentrates (8.8% of exports), and wine (4.3% of exports). Top imports were: motor vehicles (20.4% imports), petroleum and petroleum oils (7.3% of imports), and medications (3.5% of imports).
The trade deficit, a measure of the negative balance of trade in which imports exceed exports, reached $7.6 billion.

Tbilisi hosts fourth edition of Silk Road Forum
The Georgian capital hosted the fourth edition of the Tbilisi Silk Road Forum on October 26-27, welcoming nearly 2,000 high-level government and private sector representatives from 60 countries. Forum participants discussed global economic challenges, ways to solve them, and aspects and perspectives of cooperation for connectivity. Founded by Georgia’s Prime Minister Irakli Garibashvili, the first edition of the forum was hosted in Tbilisi in 2015.
Robin Dunnigan, the newly appointed United States Ambassador to Georgia, said at the event that it was an “extremely important” opportunity for private and public sector representatives as well as leaders of the Middle Corridor countries to gather to support the development of the “important transit road.”
Representatives from USAID and the U.S. business community were among participants at the panel discussions and other events within the forum. “That is why we are here today, the United States and our companies, to continue to support and participate in this development, because we know the true value of the Middle Corridor and the role of Georgia in this Middle Corridor,” Ambassador Dunnigan said.

Kutaisi Airport sees “record levels” of passenger travel
Western Georgia’s Kutaisi International Airport served 1.3 million passengers between January and October, posting a 107% YoY increase, the United Airports of Georgia announced in early November.
The body said the number of flights recorded over the first ten months of 2023 marked a “historic high.” It also noted that the airport served 4,087 flights between January-October, a figure 55% higher than in the same period of 2022. In October alone, more than 164,000 passengers passed through the international airport, which is 415% higher than the same month in 2022.
These record-breaking figures come amidst the news that Hungarian budget airline Wizz Air plans to station its fourth passenger jet in Kutaisi starting in December and plans to resume direct flights to Copenhagen, Denmark. Currently, five airlines operate from the airport, offering flights to 35 destinations in 18 countries.

Georgia preparing to host World Tourism Day, FIS Ski Cross World Cup
Thirty-eight countries of the Commission for Europe of the United Nations World Tourism Organization voted in support of Georgia’s bid to host World Tourism Day in 2024, the Georgian National Tourism Organisation announced on October 18. The issue was decided within a meeting of the Executive Council of the UN World Tourism Organisation in Uzbekistan. World Tourism Day has been held annually on September 27 since 1980 to raise awareness of the role of the industry within the international community.
At a briefing for travel agencies and associations on November 17, Deputy Economy Minister Mariam Kvrivishvili noted that the country is also preparing to host FIS ski events in Gudauri and Bakuriani in 2023-2024, highlighting the importance of developing resort zones and strengthening the infrastructure of the country’s winter resorts. “In close cooperation with the private sector, even more jobs will be created [in the domestic industry] to have a positive impact on strengthening small and medium-sized entrepreneurs of the country,” she said at the meeting.

Georgia, EU hold first High-Level Energy Dialogue in Tbilisi
Georgian Economy Minister Levan Davitashvili and European Commissioner for Energy Kadri Simson held the first EU-Georgia High-Level Energy Dialogue in Tbilisi on November 17. The meeting focused on Georgia’s alignment with key EU energy legislation, development of energy infrastructure and connectivity, and promotion of energy efficiency and renewable energy.
Following the European Commission’s recommendation that Georgia be granted candidate status, Minister of Economy Davitashvili noted during the discussions that Georgia was starting a “new path” in the process of European integration, while highlighting the “significant progress” the country has made in its energy market reforms in line with EU regulations.
“However, in addition to the achieved progress, we also have many important energy reforms that still need to be implemented with the support of the EU. Georgia has the greatest potential in renewable energies, and we feel the support of Europe and European financial institutions in the way of effectively using and utilizing this potential,” said Minister Davitashvili.

Georgia to receive €16 million from EU to improve road safety along East-West highway
Georgia will receive €16 million from the European Commission to improve road safety in the country along its East-West highway, after the European Commissioner for Neighborhood Policy and Enlargement Olivér Várhelyi and European Investment Bank (EIB) President Werner Hoyer formalized a financial package at the Global Gateway Forum in late October.
Hoyer said the project aimed to decrease the number and severity of accidents and improve safety on roads, as well as to contribute “significantly” to improving transport connectivity along the trans-Caspian corridor linking Central Asia to Europe across the South Caucasus. The EIB President noted that “enhanced safety” of Georgia’s extended Trans-European Transport Network, connecting the country to Europe and certain local transport axes, would “strengthen its trade links and economic growth.”
Várhelyi said the East-West highway “opens up new economic and trade opportunities for Georgia as it strengthens the country’s role as a trade hub” along the Middle Corridor. “With this new investment in Georgia’s East-West highway, we are improving Georgia’s connectivity to Europe,” he noted.

World Bank launches $150 million agricultural program
Georgian Agriculture Minister Otar Shamugia on October 17 announced the launch of a $150 million project to benefit farmers and enterprises by enhancing irrigation services, land management, and agricultural support. The Georgia Resilient Agriculture, Irrigation, and Land Project, which will be jointly financed by the Georgian government and the World Bank, is designed to help irrigation services and the irrigated agricultural sector adapt to drought, warming temperatures, and an anticipated long-term reduction in precipitation.
Speaking at the presentation of the project, Shamugia said the project would make an “important” contribution to the development of irrigation and land management systems in Georgia.
“We help farmers and entrepreneurs both in terms of primary production, processing, and tapping into new markets. Next year, for the purpose of integration of our farmers and entrepreneurs in various markets and promotion of Georgian products, approximately GEL 20 million ($7.42 million) will be spent,” he said.
World Bank Regional Director for the South Caucasus Rolande Pryce said joint and coordinated work was important to improve the agricultural sector. “We expect that an integrated approach to agriculture, irrigation, and land management will bring significant economic growth to Georgia, reduce poverty, and create additional jobs,” she said.

State allocates €475 million for new Tbilisi metro cars
Georgian Prime Minister Irakli Garibashvili on November 17 announced that €475 million will be allocated from the state budget to purchase additional carriages for the Tbilisi metro system in the coming years. In a meeting with the prime minister and Finance Minister Lasha Khutsishvili, Tbilisi Mayor Kakha Kaladze said 212 carriages of “modern, international standard” would be purchased with the funds to gradually replace the existing “obsolete” carriages over the next 15 years. The mayor noted that the allocated funds will be used to purchase 13 four-car trains intended to be used on the Saburtalo Line and 32 five-car trains for the Akhmeteli-Varketili Line.