Caucasian Business Week #49 by Caucasian Business Week

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BUSINESS WEEK April 7, 2014 #49

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April 7, 2014, Issue 49

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Georgian Prime Minister Visits Place for New Transit Hub Pg. 2

BE INFORMED, DO BUSINESS

GEORGIA GEORGIA IS CIS SPACE LEADER IN TERMS OF GLOBAL TRADE OPPORTUNITIES

eorgia is a leader on the CIS space in terms of global trade opportunities. Georgia was ranked 36th in the 2014 report of the international organization “World Economic Forum”. Pg. 4

WHY HAVE TENS OF COMPANIES WITHDRAWN FROM POTI FREE INDUSTRIAL ZONE?

President Aliyev receives UNWTO SecretaryGeneral

QATARI BUSINESSMEN ARE INTERESTED IN MINERAL WATERS EXPORT FROM GEORGIA

Pg. 11

ice premier of Georgia, Minister of Economy and Sustainable Development George Kvirikashvili met with Qatari businessmen delegation on Tuesday. Pg. 6

TBC BANK WINS TWO AWARDS FROM EMEA FINANCE MAGAZINE: BEST BANK IN GEORGIA 2013 AND CORPORATE SOCIAL RESPONSIBILITY AWARD 2013 IN CENTRAL AND EASTERN EUROPE & CIS

BC Bank has been honored with two outstanding awards from EMEA Finance magazine in its Europe Banking Awards 2013. Pg. 9

AZERBAIJAN EXCELLENT ORGANIZATION OF FIRST EUROPEAN GAMES IS PRIMARY GOAL: MEHRIBAN ALIYEVA

ens of Iranian companies have left the Poti Free Industrial Zone (FIZ) after western sanctions were imposed on the Iranian business. Soso Nibladze, a deputy director general for the Poti FIZ commercial issues has provided such a comment on the information about 100 companies have left the Poti FIZ. Enver Sichinava, an owner of Master TIZ company that has also left the zone, says the FIZ has no perspective and there are high taxes. At the same

time, he noted the FIZ moves to a new stage of development and the fact companies have withdrawn from the FIZ is related to western sanctions against Iran. The situation with Master TIZ is different because the company provides professional training courses. The company launched operation in the Poti FIZ in 2009 and that time there were a small number of companies operating in the FIZ. Pg. 5

CZECH COMPANY ABOUT BANK OF GEORGIA’S DUMPING POLICY

CIS

“Nova Technology” new leadership not afraid of a 0% commission fee offered by “Bank of Georgia“

zerbaijani First Lady, President of the Heydar Aliyev Foundation Mehriban Aliyeva attended the third sitting of the Coordination Committee of the Baku 2015 European Games on April 3. Pg. 11

GAS PRICE FOR UKRAINE TO RISE TO $485 – GAZPROM HEAD

WORLD NEWS PUTIN’S PIPELINES HOW RELIANT IS EUROPE ON RUSSIAN GAS?

ova Technology” new leadership, which moved to the company from “Energo Pro Georgia”, calls policy carried out by “Bank of Georgia “ in prompt payment business “dumping” and notes that the bank’s business approach is wrong , “ Nova Technology” new leadership, as they say, plans to conduct business “properly” and is not afraid of competition from “Bank of Georgia”. Commersant.ge wrote at the end of March that prompt payment company “Nova Technology” had a new owner - “Energo - Pro Georgia’s” founder, a unit of Czech Republic-based EnergoPro AS. How profitable is the business run by “Nova Technology” in Georgia is unknown, especially in the light when “ Bank of Georgia “ offers a 0%

CHOOSE GEORGIAN AND GOODWILL WILL HOLD EXHIBITION AND SALES OF GEORGIAN PRODUCTS ON APRIL 11 TO APRIL 12 Pg. 5

commission fee to pay box users. Answering this question “Nova Technology” Director General Levan Kirvalidze, who came from “Energo-Pro” company, says that this business is quite profitable, technologically growing and perspective and problems created by “Bank of Georgia” are not so hard for the company as they were talked about. After “Bank of Georgia” imposed a commission fee equal to 0%, some consumers really began to use the bank’s pay boxes, but after some time the other companies managed to return a large part of the clientele. So this business is very profitable, the company is technically growing. Our company has a number of interesting offerings. We’ll offer new services, there will be a lot of news. Most importantly, we will conduct business properly, “ – Kirvalidze adds.

Budget and Finance Committee Chairman Talks about Fuel Market Monopolies Pg. 4

PASHA Bank Increased Share Capital ANAR ISMAYILOV CEO of PASHA Bank in Georgia Pg. 9

Are interruptions in Georgia’s wine export economic warfare? LEVAN DAVITASHVILI Head of Georgia’s National Wine Agency Pg. 2

Trans Electrica Georgia hopes that this year will invest $100 million Pg. 8

Gakharia: A Collective Approach to the Cases of the Affected Businessmen is Unjustified Pg. 4

MAIN EVENTS caucasian business week

GEORGIAN PRIME MINISTER VISITS PLACE FOR NEW TRANSIT HUB

eorgia on Wednesday confirmed plans for a new airport in conjunction with a port in Anaklia, a small settlement on the Black Sea coast, on the border with Abkhazia. Prime Minister Irakli Gharibashvili, who visited Anaklia with Infrastructure Minister Davit Narmania, said it is important to develop the area along the coast and it is important that it happens close to Abkhazia. “Developing these areas, infrastructure of international standards and progress cannot be uninteresting for our Abkhaz brothers,” he said, and expressed hope that Anaklia will become a large port. He added that consulting companies from Japan are studying the area and there are several projects in the Anaklia port. The Ministry of Economy also outlined the plans in a new statement. “The airport will have special opportunities for transit of goods,” the statement says. Constructing a port and an airport will contribute to creating new jobs, boosting the transit of goods through Georgia and further development of the country’s transit potential. The plan is a modified version of a plan by exPresident Mikheil Saakashvili, who wanted to build an entirely new city with half a million people on a swamp, a plan deemed an unreasonable waste of money by the opposition.

April 7, 2014 #49

GEORGIAN PRESIDENT ABOUT GROWTH IN INVESTMENT INFLOWS

n unstable political environment in our country had a negative impact on our business; in the wake of this, instead of growing 6 percent, our economy increased only 3 percent,” -declared Georgia’s President Giorgi Margvelashvili within his visit to Poland at his meeting with the Georgian Diaspora. As Mr. Margvelashvili maintains, as soon as they managed to keep the political situation on an even keel, the investments have increased in the country. “The unstable political environment deterred our business from advancing; that is why we were faced with as low as 3 percent economic growth; however, the consequences of the last quarter clearly point to the fact that the situation has been rectified as soon as we managed to maintain a stable political situation -- investments substantially

increased in our country,” stated the President. As for the Georgian President’s official visit to Poland, he defines it as “exceedingly pleasing”. Within the frames of his visit, the Georgian top Official is also expected to visit Krakow and grace Kachinskis’ grave with flowers there.

WITTEVEEN + BOS REPRESENTATIVE MET WITH THE PARTNERSHIP FUND LEADERSHIP

MARCH RECORDS 8% GROWTH IN VISITORS TO GEORGIA

eorgia had an 8 percent increase in number of visitors in March, 2014, compared to the same period last year. There came 392,725 visitors in the third month of 2014, according to new monthly figures published by the Ministry of Internal Affairs. In January-March, the number of visitors was 1,006,267 – a 7.6 percent increase from last year. The ministry splits visitors into the following cat-

egories: 375,382 of the visitors in the first three months were tourists. This is 10.1 percent more than last year. 175,805 of those who came were just transiting through Georgia. This is 39 percent more than last year. There were 456,080 visitors who came here for other reasons – a 3 percent drop since last year. The list of countries of origin was topped by Turkey, Azerbaijan, Armenia, Russia, Ukraine and Iran.

ARE INTERRUPTIONS IN GEORGIA’S WINE EXPORT ECONOMIC WARFARE?

here are interruptions in the export of wine from Georgia to Belarus, although formally the export is not stopped. The sale of wine to Ukraine and Russia is continuing without any restrictions, according to Levan Davitashvili, head of Georgia’s National Wine Agency. Media in Belarus have reported that Georgian wine is disappearing from the shelves not only in shops and supermarkets, but also from specialist shops. Some people expect Russia to create obstacles for Georgia as a means to scare the country into not signing a treaty with the EU, especially on the historical background of the Russian wine embargo introduced in 2006. After the change of government in Georgia, this embargo was lifted and export of wine to Russia was resumed. In Tbilisi people now look at the close relations between Russia and Belarus and wonder whether the obstacles in the sale of wine to Belarus might be a form of hidden economic sanctions by Russia. Levan Davitashvili told DF Watch that wine export hasn’t stopped to Belarus, but there are certain interruptions, and negotiations are in prog-

ress to solve the problem. “A week ago, a delegation from Belarus visited Georgia and this issue was brought up. In a week, a delegation from Georgia will visit Belarus, and I hope this issue will be solved on the level of governments and that restrictions will be eliminated,” he explained. Davitashvili also remarked that export to Russia and Ukraine is continuing normally without problems. In 2013, Georgia’s export of wine was 46.7 million bottles, worth USD 232 million. This is twice as many bottles as in 2012, and USD 68 million more in value. In January 2014, Georgia exported 4 million bottles of wine and alcohol, which is 45 percent more than in the same period last year. Export of wine to Russia increased by 80 percent. Georgia’s export of wine to Ukraine increased by 78 percent, to Kazakhstan by 275 percent, Latvia – 596 percent, Poland – 36 percent, Estonia – 289 percent, Azerbaijan – 58 percent, Belarus – 2 percent, UK – 61 percent, Lithuania – 3 percent, Hong-Kong – 16 percent, Netherlands – 17 percent. Wine export in January, 2014, was USD 11.3 million, which is USD 9.2 million more than last year.

utch engineering company Witteveen + Bos representative and the Ambassador of the Kingdom of the Netherlands in Georgia Hans Horbach met Executive Director of the Partnership Fund [PF] and discussed the Foundation’s priority areas, including development opportunities of the new port in the Black Sea region and Tskaltubo resort. According to Executive Director Irakli Kovzanadze, international skilled engineering - consulting Japanese companies Oriental Consultants

Company Limited and its partner Padeco Co., Ltd. are currently preparing a detailed study of the development of a new port. “We will know the details in 60 days, including the location of the new port,” - Irakli Kovzanadze said at the meeting. The development of Tskaltubo as a healing resort was discussed at the meeting as well. Witteveen + Bos representative notes that his company provides consulting and design projects in areas such as infrastructure, urban development and environmental protection.

ANAKLIA SEAPORT AND AIRPORT CONSTRUCTION PROJECT TO COMBINE RESOURCES OF SEVERAL COMPANIES

eputy Economy Minister Keti Bochorishvili familiarized “Commersant” with the government’s plans regarding the construction of the port and airport in Anaklia. According to her, efforts of several companies will be combined during the implementation of these projects, and the Ministry is ready to consider offers of anyone who is interested in participating in the construction of the port and the airport. “The government is actively working to attract U.S. investors. At this stage, a particular construction site of a deepwater port is being selected. Its development involves several phases and also includes construction of a transit airport,” - she notes.

At this stage, the Arabic holding “ Rakia “, which is the operator of Poti free industrial zone, doesn’t express its interest in this project and planned the airport construction within the FIZ project, but later abandoned the project. According to the company’s CEO Gugi Tsanava, “ Rakia” has information on the port construction project , but at this stage management has other plans. “It is possible that in the future we’ll also be interested in this project , but we have plans for the next 2-3 years, including jointly with the Georgian Co-investment Fund,” - he says. “Rakia” owns “ Sheraton Tbilisi” hotel , the shopping center “ Tbilisi Mall “ and is the Poti FIZ operator.

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PUBLICITY April 7, 2014 #49

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INTERVIEW caucasian business week

BUDGET AND FINANCE COMMITTEE CHAIRMAN TALKS ABOUT FUEL MARKET MONOPOLIES

ccording to Chairman of Budget and Finance Committee of Parliament David Onoprishvili , there are suspicions that the prices of fuel in the country is higher than they should be in reality, and the reason is the cartel dealings between large companies. “Recently a variety of fuel prices was registered on the market, but there are suspicions that the current prices are also the result of collusion between big companies “ - he says. CEO of “ SOCAR Georgia Petroleum “ David Zubitashvili states “Commersant” that currently companies do not have any information about the government’s intention to consider the pricing on the fuel market . According to him, if the competition Agency

conducts a research and experts consider that the prices are too high, then they can be reconsidered. According to the Chairman of the Union of Oil Products Importers Vano Mtrvalashvili , the initiative to study pricing can be only hailed, as it will provide answers to all the questions that have accumulated in the society. “ From the companies pricing has always been transparent , but public was often provided with distorted information , which created a poisoned environment “ - he notes. According to the Government , the competition agency will be officially established by April 15 during the remaining time government will work on its charter and selection of personnel. In general, work on methodology and the legislative acts, without which the Agency is not able to work, will be completed by October 1, 2014. Prior to approval of the document, it will be considered by the parliamentary majority and the opposition, as well as the Parliamentary Committee on Sector Economy. According to the Deputy Minister of Economy Natia Mikeladze, identification of monopolists on the Georgian market by the Agency should take place by market research and positions of certain companieson it Tentatively, the degree of effectiveness of the new Anti-Monopoly Service will be determined by the end of 2014. Under the recently enacted antitrust legislation, the Competition Agency will be independent authority, which itself will determine priorities.

April 7, 2014 #49

BUSINESS OMBUDSMAN: A COLLECTIVE APPROACH TO THE CASES OF THE AFFECTED BUSINESSMEN IS UNJUSTIFIED

usinessmen who have suffered during the previous government continue to blame the current government in the absence of political will in resolving issues of justice restoration and returning their property - and this is despite the fact that adviser to Prime Minister on Human Rights, Thomas Hammarberg involved in the issue has offered a viable mechanism for solving this problem. As reported, the former head of the EU observer mission in Georgia, and currently an advisor to the government on Legal and Constitutional Reform and Human Rights Thomas Hammarberg became interested in the cases concerning the illegal seizure of businessmen’s property during the previous government which are under consideration in the Prosecutor’s Office. In particular, he met with several Georgian businessmen, representatives of non-governmental organizations and a delegation of the Human Rights Department in the EU. Hammarberg acquainted businessmen with some details of his conversation with the Chief Prosecutor of Georgia Giorgi Badashvili who informed him that the number of lawsuits filed to the Prosecutor’s Office does not exceed 500 , despite the fact that the political leadership of the country is talking about tens of thousands. In September last year , the then Prime Minister of Georgia Bidzina Ivanishvili said that the state couldn’t take on the return of the confiscated property or payment of compensation, as a whole it was about 7.6 billion GEL because in 90% of cases the state had been involved in the transactions as a guarantor. “This is the most difficult problem in the restoration of justice faced by the government,” - said the then head of government. According to a representative of the Center for Business and Economics, a lawyer Irakli Kereselidze, the fact that the Prosecutor’s Office is talking about a few hundred cases and not tens

of thousands shows that payment of compensation is entirely possible , and it does not require astronomical amounts. “Obviously, talks about many billions have been speculation on social issues. As a result, there was no progress in any case. The media often talk about the tens of thousands of cases, but as we were told by Mr. Hammarberg, there had been a duplication of cases, and in fact we are actually talking about only 500 cases. It is possible that after a detailed examination this figure will reduce,” - Irakli Kereselidze notes. Business Ombudsman Giorgi Gakharia believes that it’s impossible to imagine the return of property without judicial proceedings and decisions of the judiciary. “The collective approach to such cases is misplaced, since in such a case none of cases will be brought to an end, and we will always walk in circles. Regarding the possibility of creating an international commission to study this issue, establishment of such a commission under the jurisdiction of Georgia will not solve the problem,”- Gakharia adds.

HYPERMARKET OPENS NEAR TBILISI AIRPORT GEORGIA IS CIS SPACE LEADER IN TERMS OF GLOBAL TRADE OPPORTUNITIES

eorgia is a leader on the CIS space in terms of global trade opportunities. Georgia was ranked 36th in the 2014 report of the international organization “World Economic Forum”. It scored 4.5 points from maximum

7, which is the best indicator in the CIS space .Neighboring Armenia took the 53rd place, Azerbaijan – 77th and Russia – 105th. Singapore tops the rating again. The estimated parameters are market access, customs - border administration, infrastructure and information technologies.

SOCAR PETROLEUM GEORGIA REMAINS GEORGIA’S LARGEST COMPANY

OCAR Petroleum Georgia has again been recognized as Georgia’s largest company in 2013. The rating of the largest companies was announced by the Business School of Ilia Chavchavadze University in Tbili-

si in accordance with the companies’ business performances in 2013. The rating covers energy, banking and insurance sectors. The top 10 includes eight companies importing oil and gas and two companies operating in the transport sphere. Thus, Georgia’s top 10 largest companies are Georgian Railway JSC, BP, Galf, SOCAR Georgia gas, Rompetrol Georgia, Lukoil Georgia and others. SOCAR is engaged in distribution of oil products, gas and owns gas stations network in Georgia. SOCAR Georgia Petroleum entered the market of oil products of Georgia in September 2006. The network of petrol stations of SOCAR Georgia Petroleum, has been expanding increasingly both in Tbilisi and various regions of Georgia.

ypermarket built on Iranian investments was opened in the vicinity of Tbilisi airport. The total area of the three-storey building is 2 thousand square meters, where 30 - locals are employed. According to Mahmoud Davari, the Iranian co-founder of the Iran and Georgia Business Development Center, 4 million USD were invested in the commercial object. Davari notes that the Iranian businessmen were also interested in the tourism sector of the Black Sea coast of Georgia.

ACT - 38% OF THE UNEMPLOYED ARE NOT ACTIVELY SEEKING WORK

onsulting and research firm ACT conducted a study of problems of employment, and in particular, was interested in concrete actions of Tbilisi residents to find work. In particular, what percentage of the city’s population does not have a job, how many of them are looking for work? Research shows that 89% of the unemployed men want to have a job, but 38% do not take any effort to search for it. 78 % of unemployed women who call themselves housewives also want to work, but being of still greater passivity - 53 % of them do not take any action in order to find work. Relevant websites are the most popular place to look for a job for those [53%] who are still looking for something to do as well as personal contacts – [54%]. Research shows that in this matter the behavior of persons with different status differs from each other. In particular, students are looking for work only on the Internet, while 62% of women and 69 % of men are basically trying to find a job through the familiar. 74% of respondents disregard whether they will work in their specialty, while 50% say they would only agree to work in the profession that requires skill. 33% of job-seekers agree for unskilled work (nanny, driver, etc.) and 39% of them have a higher education.

BUSINESS April 7, 2014 #49

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IRANIAN COMPANIES LEFT POTI FREE INDUSTRIAL ZONE

ozens of Iranian companies have left Poti FIZ because of UN sanctions against Iran. According to Deputy Director of the FIZ Soso Nibladze, up to 100 companies have left the zone. However, representatives of some other companies explain their decision differently - in particular, the owner of “Master TIZ” Enver Sichinava says that the reason for leaving are high taxes and general unperspectiveness. According to Soso Nibladze , FIZ moves to the next level , and the mass exodus from the zone is related to sanctions against Iran. “Master- TIZ “ is a special case , since this company was engaged in personnel training, and at a time when it came to the zone - it was in 2009 - there was minimal activity there, consequently,

the demand for their services was insufficient. As for the other companies, the majority of them were Iranian, and because of the sanctions they had to leave the country. In general, I cannot agree with the assessment of the futility of the FIZ. We have already attracted new companies, and managed to compensate the losses. In 2013, turnover began to increase, processing projects appeared, as well as more than 50 trade and industrial companies. For example, a factory for the production of helium, building materials was opened, etc. Railway branch was conducted into the zone, water supply system was improved,”Director of the Poti FIZ notes. It is also planned to build plants producing roofs, alcohol, fragrances for perfumes, equipment for repair of pipes, etc. Currently 140 companies have been operating in the FIZ.

JANUARY TO MARCH PERIOD RECORDS 17% GROWTH IN PROPERTY MARKET TRANSACTIONS

n January-March 2014, the number of transactions in the property market has increased by 17 % compared with the same period in 2013. According to official data of the Civil Registry, in total 118 910 real estate transactions were concluded in this period, 20 603 of them came to the primary market, 98 307 – to the secondary market. In the first quarter of 2014, 17.3 % of transactions

were concluded in the primary market, 81.3% - in the secondary. The figures show that in January-March 2014 the number of transactions in the primary market increased by 8.5 % in comparison with the same period of 2013, although their total proportion in the total volume of transactions has decreased. At the same time, the number of transactions on the secondary market increased by 19.0 % in the same period.

CHOOSE GEORGIAN AND GOODWILL WILL HOLD EXHIBITION AND SALES OF GEORGIAN PRODUCTS ON APRIL 11 TO APRIL 12

n April 11 to April 12 the Dighomi branch of Goodwill hypermarket will host the Easter exhibition and sales of Georgian products. The event is organized under the trademark of Choose Georgian. The project will be held for the fourth time. The first event was held in December 2012. Georgian products will be introduced at special prices in the Easter period. The exhibition-sales and tasting will open at 13 o’clock. Representatives of the Georgian Agriculture Ministry, the Economic Development Ministry, the parliament’s agrarian committee and various organizations will attend the event. For the first time, representatives of EU’s EN-

PARD program will also take part in the event. ENPARD provide active job for developing farmers’ complexes. The Choose Georgian exhibition will introduce agrarian and handicraft products: honey, mineral waters, tined products, jams, sweets and so on. The event is to popularize Georgian products and support small regional companies. The event is held twice a year – in the New Year and Easter periods. The event is organized by the Sales Management Company that aims to provide support of Georgian small-sized companies in regions and help them in sales management, marketing and management issues. The company has developed a trademark of Choose Georgian.

WHY HAVE TENS OF COMPANIES WITHDRAWN FROM POTI FREE INDUSTRIAL ZONE?

CARTU GROUP HAS NO INFORMATION ON MEDIA RUMORS ABOUT SALES OF CARTU BANK STAKES

nformation about possible sale of the Bank Cartu Stocks released by Georgian media is unknown for Cartu Group. Qronika+ released the information based on confidential source. Uta Ivanishvili, son of the former Prime Minister Bidzina Ivanisvhili is 100% beneficiary stockholder of the bank. He became owner of 100% share of Cartu Group last year. Before and after that stockholder structure was represented by offshore companies although son of the businessman owned only 10% before that. Executive director of Cartu Group Nodar Javakhishvili states that negotiations about the possible stock sales is competence of Uta Ivanishvili and his involvement is excluded, although he would have had information about it, but he has not

heard nothing similar. The source informs one of the local editions that businessman and former Prime Minister Bidzina Ivanishvili suspended all charity projects, among them funding of the hospital in the home region. According to confidential source, international audit is already over in the bank and 3 foreign companies are negotiating with Ivanishvili about stock exchange. The source announces Bidzina Ivanishvili’s leave of Georgia although can’t say specific date. Ivanishvili will leave Georgia before or after local self-government elections of Georgia because he’s afraid “not to share Patarkatsishvili’s fate because of the failure of the obligations fulfillment to Russia”, - says the article of Qronika+.

CONSTRUCTION WORKS ON SHAORI LAKE TO START IN JUNE

ommersant ‘’ found out new details about Shaori lake development project. According to Ambrolauri district administration, an investor will start construction works in

June. The project cost is unknown at this stage, however, it is known that 80 thousand GEL will be spent on the development of Shaori lake infra-

structure. As we reported, Russia-based Georgian businessman Tamaz Jenalidze would build a hotel and restaurant on Shaori Lake. The businessman will spend 200 thousand USD on the development of the area of 2 square meters. Works on carrying out communications on Shaori lake will start in 3 months , after which the investor will commence the hotel and restaurant construction.

herefore, the demand for Master TIZ services was low. Thus, the company had to leave the zone. As to other companies, a major part of them came from Iran and, consequently, they were subjected to western sanctions. They were banned to carry out bank transactions and therefore, they had to leave the zone. However, Nibladze does not agree as if the Poti FIZ has no perspectives and he says many new companies have launched operation in the zone. The POti FIZ is moving to a new stage of development, new players have been attracted and losses from withdrawal of Iranian companies have been remunerated. Namely, the trade turnover rose in 2013 and various processing projects were launched in 2013, Nibladze said. Over 50 trade and industry companies were registered in the Poti FIZ in 2013. Two new enterprises for helium processing and construction materials manufacturing opened in the zone. Railroad was stretched to the zone. Water supply system is being also arranged stage by stage. At this stage, preparatory works are being carried out for the following construction projects: A roofing materials manufacturer from Azerbaijan will open on 5 000 square meters. The company will be unveiled in 2-3 months. Spirits enterprises will open on 30 000 square meters. The land plot preparatory works have been completed and the company has launched construction works. Perfume aromas manufacturer form Ukraine will open on 1000 square meters. The land plot preparatory works have been completed and the company has started construction works. Oil and gas pipes repair inventory manufacturer will open on 1500 square meters. Technical details of the project are being agreed. The company will launch construction works in the near future. The warehouse and refrigerator complex will be constructed on 5 000 square meters. Afghan investments: The land plot preparatory works have ended. In the near future automobiles batteries processing project will be also developed. A contract agreement has been already signed with the project owner Indian company and the project development will be launched in the near future.

Negotiations are also underway with various investors over production of construction materials and pharmaceutical goods. At this stage, about 140 companies continue operation in the Poti FIZ. The Poti FIZ launched full-scale operation on October 15, 2010 and the zone has already moved to a new stage of development. Negotiations are underway with companies from United Arab Emirates, India, Azerbaijan, Armenia, Ukraine, Turkey, China and other countries. Various forums and business conferences are been planned, Nibladze says, and he hopes the new phase will increase the number of employed and the Poti FIZ will fulfill its role in the trade turnover growth. The Poti FIZ is located on 300 hectares. The FIZ owner company issues land plots to investors by leasing. The registered companies that operate in the zone enjoy various tax preferences: they are exempted from profits, property and customs taxes on imported products. The Saakashvili’s Authority proposed to develop a fee industrial zone in Poti in 2007. In April 2008 the previous government sold a 51% stake in Poti seaport and buildings on 300 hectare development zone to Arab company Rakeen Investmenmt - Ras Al Khmaimah Investment Authority Georgia with a 49-year management right at 90 million USD. Under the contract agreement, the Arab company was to develop a free industrial zone in the Poti FIZ. In 2009 Rakia bought the remaining 49% stake at 65 million USD, but later the Arab company announced the Poti Seaport as unprofitable venture and sold a 80% stake to APM terminal, an affiliated company of Danish A.P. Moller-MaerskGorup. Now Rakia owns only the FIZ territory.

BUSINESS & ECONOMY caucasian business week

BEER TRADITION AND MODERNITY Renewed Kaiser - Special and the Best Quality Bavarian Beer!

here is nowhere on earth with a longer brewing tradition than Bavaria. In Bavaria we find both the oldest archaeological evidence of beer making in Europe — a Celtic beer amphora from 800 BC — and the oldest preserved malting plant and brewhouse in which beer was made by modern techniques: a complete installation dating from 179 AD, during the Roman occupation of Bavaria. In Bavaria, however, beer is an integral part of social life. Nowhere in the world is there a closer connection between people and their beers as in Bavaria. Beer and Bavaria are almost synonymous concepts. Bavarian breweries, therefore, are not only commercial enterprises; they also are the guardians of an essential part of the culture. Everywhere beer is seen as a drink of pleasure. On average a Bavarian consumes from birth to the grave some 150 litres of beer per year putting Bavarians right at the top of the beer consuming list of states in Germany. In summer all roads

eventually lead to a beer garden. It is here that the highly valued and highly refreshing state drink – also known as liquid gold - awaits both tourists and locals alike. Here, after a hard days of work many Bavarians choose to unwind in the company of friends and with a cool glass of beer. Bavarian beer is especially liked in Georgia. “Tasty, light and pleasant…” – this is how consumers characterize Beer Kaiser, which appeared in a renewed packages on retail shelves across Georgia. History of Kaiser Beer started in 1522 when Prince-Bishop Weigand von Redwitz of Bamberg issued an official brewery permit for the Village of Neuhaus. Traditional Beer festivals were periodically being held in various regions of Germany. Beer prepared according to the Laus family recipe living in Bavarian suburb came out as the winner in one of the competitions. This beer was recognized as the Kaiser Beer. In 1929 Kaiser Beer was granted the official commercial registration and now its plant Kaiser Bräu GmbH & Co.KG, is operating in Neuhaus.

QATARI BUSINESSMEN ARE INTERESTED IN MINERAL WATERS EXPORT FROM GEORGIA

ice premier of Georgia, Minister of Economy and Sustainable Development George Kvirikashvili met with Qatari businessmen delegation on Tuesday. They visit Georgia to study investment opportunities of the

country. The delegation headed by member of Qatari Chamber of Commerce Ali A Misnad, includes representatives of 20 leading companies of this country. Members of Qatari delegations presented business proposals, among them about mineral water export from Georgia to Qatar, development of hotel business and spa-resorts in Georgia, also construction of the great exhibition center in Tbilisi. On the meeting investment environment in Georgia and main economic policy directions of the country were discussed. The guests expressed interest to invest in specific economic sectors of Georgia. At the end of the meeting the sides expressed hope to continue productive tradeeconomic relations between Georgia and Qatar.

April 7, 2014 #49

ECONOMY April 7, 2014 #49

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April 7, 2014 #49

MARK KANTSELSON: THE FACT THAT THE GOVERNMENT IS TALKING ABOUT KHUDONHESI WITH AFFIRMATIVE FORM AND AS ABOUT THE PLANNED PROJECT IS VERY GOOD

TRANS ELECTRICA GEORGIA HOPES THAT THIS YEAR WILL INVEST $100 MILLION

rans Electrica Georgia hopes that they will invest $100 million in Georgia this year. On Friday in his speech on Tbilisi Economic Forum, technical director of the company David Mirtskulava mentioned that if Trans Electrica Georgia gets permission for Khudonhesi construction and works start in the second half of the year, on the first stage of the construction, $100 million have invested in the construction of the power plant by the end of the year. As David Mirtskulava mentioned, the project considers investment of $200 million each ear. Total budget of Khudonhesi project is $1,2 billion. On the forum David Mirtskhulava presented “Energy and Economy” and discussed situation in Georgian energy sector, energy balance of the country and challenges. Mirtskhulava ones again mentioned that construction of the new power plants is necessary in Georgia, it’s guarantee foe

the energy security of the country. “Khudonhesi project of $1,2 billion, construction of the power plants in Adjara are planned, although there are such system attacks on these projects that I do not think that they have spontaneous character”, - Mirtskhulava said. He also expressed doubt that it’s likely that not only Georgian but also foreign organizations are standing behind these protests. “We satisfy 75% of energy consumption with import it’s a very big data. We should be able to reduce this indicator to the average European one, to about 54%. We have opportunity for that. Importance of energy security was demonstrated well recently on the example of Ukraine”, - Mirtskhulava states. Mirtskhulava also recalls examples of other countries as well. He says that there are 3600 power plants with dams in Norway, 500 power plants in Switzerland and among them 250 – with dams; Spain constructed 18 power plants annually till 2000.

PHILIP DIMITROV: “IT IS OUR WISH TO INCLUDE GEORGIA’S ENERGY SYSTEM IN THE EU”

ccording to EU Ambassador for Georgia, Philip Dimitrov, The European Union expresses desire to integrate Georgia’s energy system.

“The European Union is interested in being informed of happenings in this field. A strategy needs to be facilitated. We’re emphasizing the development of infrastructure – this is important not only for Georgia, but for its bordering countries and for the European Union. We definitely want to integrate Georgia’s energy system with the EU. We see a readiness displayed by the Georgian side to be included in Europe’s energy group.” The two-day conference on the topic of energy was also attended by the Minister of Energy, Kahka Kaladze. The conference further covers ongoing processes in the energy sector, present investment policies, and the general relationship between Georgia and the EU in the energy business.

KHUDONHESI INVESTOR CREATES SVANETI DEVELOPMENT FOND OF SEVERAL MILLIONS

hudonhesi investor company Transelectrica initiates establishment of Svaneti Development Fund in the near future. The company states that they are going to deposit considerable amount in this fund and permanently take care of the region’s development. “According to investor’s decision, 5% of the

profit will be permanently transferred to the fund named as Region’s Revival Fund. It’s several million GEL annually”, - technical head of Transelectrica David Mirskhlava states. The company announces about one other important initiatives related to Svaneti infrastructural development: “Initiative was born that the investor should think about construction of the Lentekhi-Mestia connecting road. The investor will participate in the construction of the tunnel along with the state Svaneti is a winter resort, with remarkable tracks for skiing. New cableways of Tetnuldi are being built, but the hotels are empty. During January only several hotels were loaded for New Year period. When the road is improved, people will be able to get from Kopitnari airport to Ushguli in 1 hour and 40 minutes period. It will be a great advantage for the regional development”, - David Mirtskulava stated.

irector general of Rustavi Azote Mark Kantselson considers that there is nothing surprising that government lobbies Khudonhesi construction. Kantselson says that the country, which has hydro resources and rich potential, is obliged to use its resources for the economic development. The fact that the government is talking about Khudonhesi with affirmative form and as about the planned project, is right and it should be a message for the future wellbeing of the population. The state is talking about the large investment projects and thus talking with people about the ways and necessities for the country development. “As for ombudsman’s statement as if the government does not take into account the case that the project many not get approval permission of the Ministry of Environmental Protection, is absurd. The project considers technical details; technical and seismological issues may be adjusted any time. There is nothing impossible in it. When the government declares that the project should be implemented it means that economic situation should be developed in the country. I can’t understand how it may consider as pressure on the administrative bodies, which should issue respective permissions to the Khudonhesi construction company. The population always expects immediate results; it’s difficult for them to understand large investment projects, which will bring benefits to the country in the long-term. Yes, the government should talk and as much as possible on this project so that positively form opinion of each person. There is an issue not only about the country benefit, but also development of the specific region, improvement and increase of population living conditions and on this time the state is obliged to take care on the implementation of this project. I think that the ombudsman does not understand technical side of such projects and can’t realize that not only large,

but smaller-scale projects considers all kinds of risks and none of the investors will invest in the project, which will be risky and unprofitable. In this case the ombudsman should protect people’s interests, people’s interest is living in the economically developed country. He should focus on the protection of the population’s interests during the project implementation, issue compensation for them and offer for the normal conditions, not on the lobbying and not lobbying of the project. Khudonhesi project is in fact a social project, which will enable the country to increase living standard. Such project definitely needs the state support. One region should not determine fate of whole country. It turns that the ombudsman thinks about specific group of the people who does not like project and does not think about population of Georgia, country development and opportunity for the state to use hydro resource and large investment for the economic development. I can’t understand what opposite arguments the ombudsman may have, what argument should be more than country development?” - Mark Kantselson stated. He considers that when there is a conclusion of the project of the reputable institution, such as World Bank and compensations are paid to the population according to their regulations, questions marks are not necessary and talking on this topic is only demagogy.

GEORGE TAVDGIRIDZE: “KHUDONHESI PROJECT IS AN IMPORTANT GUARANTEE FOR THE COUNTRY’S SECURITY”

tate security depends not only development of defense opportunities, but also on the strong base for economic and energy security. That’s why we support large economic projects. In this context we review construction of Khudonhesi plant and consider it as an important affair for energy security of the country, respectively - as an important factor or energy security”, - elected head of Military Analytic Research Center George Tavdgiridze stated on todays press conference. Representatives of Ministries of Defense, Regional Development and Infrastructure, Energy, Economy, also from the parliament committee of Defense and Security, and from the boards of security and State Security of Georgia attended the conference, which was held in the hotel Radisson Blu Iveria - “Khudonhesi and challenges for Georgian Security”. The activity is organized by non-governmental organizations - Georgian Infrastructural Projects Initiative and Military-Analytic Research Center. One of the presenters George Tavdgiridze states that defense capacity of the country is in direct correlation with its economic potential and therefore, Khudoni directly (increase of tax base) and indirectly (energy necessary for economic development) will promote increase of financial resources for the defense of the country. “In order to reach aims declared in State Security Concept of Georgia, economic megaprojects are really important, such as Khudonhesi hydro

plant, Anaklya port, start of Shah-deniz second phase, etc. Such projects greatly influence international authority of the country and important foreign guarantees for security. Construction of Baku-Ceyhan oil pipeline is a clear example of it, parallel of which USA funded Train and Equipment Program, which considerably increased defense capacity of the country (for comparison, in 2002-2003 military budget of Georgia did not exceed to 40 million GEL, USA assigned about 150 million GEL for Training and Equipment Program)”, - George Tavdgiridze stated. We also consider that defense capacity of the country is directly correlated to the economic potential of the country and we consider that Khudoni directly (increase of tax base) and indirectly (energy necessary for economic development) will promote increase of financial resource for the defense of the country.

BANKING NEWS April 7, 2014 #49

caucasian business week

TBC BANK WINS TWO AWARDS FROM EMEA FINANCE MAGAZINE: Best Bank in Georgia 2013 and Corporate Social Responsibility Award 2013 in Central and Eastern Europe & CIS

BC Bank has been honored with two outstanding awards from EMEA Finance magazine in its Europe Banking Awards 2013. The Bank was named the Best Bank in Georgia for the third consecutive year and was also selected for Best Corporate Social Responsibility (CSR) in the Central and Eastern Europe & CIS region. TBC Bank is the first Georgian company to receive regional recognition for its CSR efforts in these annual awards. “TBC Bank has a lot to be happy about in its 2013 performance. Its growing loan book is providing valuable support to local companies and entre-

preneurs, and its dominance in the retail deposits space shows that it remains a name trusted across the market. With excellent growth in its profitability as well, it is a worthy winner of our Best Bank in Georgia award for a third year. Furthermore, the variety of initiatives launched to help its local communities means we are proud to name TBC as the first Georgian bank to receive our Corporate Social Responsibility award,” said Tim Burke, Editor, EMEA Finance. “We are honored to win the prestigious Best Bank in Georgia Award from EMEA Finance for the third consecutive year. We are especially pleased to receive the award for Best Corporate Social Responsibility within the wider, CEE & CIS region – the first Georgian company ever to be awarded for achievements in CSR on a regional scale. This international recognition reinforces our determination to continue delivering outstanding results, while maintaining our traditional focus on sustainable corporate practices and policies,” commented Vakhtang Butskhrikidze, CEO, TBC Bank. EMEA Finance is a bi-monthly magazine focused on the financial markets in Europe, the Middle East and Africa. The EMEA Finance Europe Banking Awards program is in its sixth year in 2013. This year, TBC Bank was named a winner among such institutions as Barclays, HSBC, Credit Suisse, Raiffeisen Bank International and Citi.

SMALL BANKS EXPECT GROWTH IN DEMAND FOR LOANS

epresentatives of small Georgian banks interviewed by “Commersant” expect growth in demand for their loans during the spring. According to “Basisbank”, trend in demand for loans now is the same as it has been for many years, and this year the demand has increased compared to last year. “We expect the increased demand in the near future, and it is possible that our bank will offer various promotions on consumer and mortgage loans,” – it was said in “Basisbank.”

“KorStandardBank” claims that since January 2014, as in previous years, there has been an increase in demand for loans. “Significant demand is observed during various actions , in particular, action on consumer loans. Currently, the bank has launched a campaign of car loans and interest in this product has grown significantly, “- the bank representatives note. The bank notes that the demand for loans is growing and competition is developing in the market as well as demand from consumers is growing.

IN JANUARY-MARCH 2014, THE NUMBER OF TRANSACTIONS IN THE PROPERTY MARKET INCREASED BY 17%

PASHA BANK INCREASED SHARE CAPITAL

ASHA Bank, a player of the Georgian financial market, has increased its share capital by 68 million GEL, bringing its paid-up share capital to 103 million GEL in total. This capital increase has resulted in PASHA Bank climbing into the top 10 banks of Georgia by equity and the top 15 by total assets. According to the strategic development plan for the current period, the bank also plans to move up into the top 10 banks of Georgia by total assets. CEO of PASHA Bank in Georgia, Mr. Anar Ismayilov, commented that this almost tripling of the Bank’s capitalization is proof of the shareholders’ trust in the significant potential and stability of the market. This decision is predominantly intended to support expansion of the Bank’s op-

erations as suggested under its corporate development strategy. The increased capital base makes the Bank even more attractive to its major target clients, and enables it to participate in financing large projects. PASHA Bank in Georgia follows the same business model as its parent bank in Azerbaijan offering services to large companies, as well as to small and medium businesses. PASHA Bank has an individual approach to each customer and builds long-term partnerships with businesses requiring financial partner support for their growing operations in Georgia and beyond. The expected expansion of PASHA Bank into the Turkish market through acquisition of one local player, will greatly contribute to the groups’ synergy potential and availability for its regional client base.

PASHA BANK SPONSORED GEORGIAN-SWISS BUSINESS ROUNDTABLE IN ZURICH

ASHA Bank Georgia, a wholly owned subsidiary of the leading Azerbaijani corporate and investment bank Pasha Bank OJSC (the Bank), sponsored the Georgian-Swiss Business Roundtable in Zurich on 25.03.2014. The roundtable, organized by the Joint Chamber of Commerce Switzerland-CIS (JCC), was devoted to the facilitation of bilateral trade and raising Georgia’s profile as an attractive investment destination for Swiss business and financial communities. Mr. Turkhan Mahmudov, Advisor to the Board of PASHA Bank OJSC, addressed the gathering and shared the experiences and lessons learned during the launch of the Bank’s Georgian subsidiary.

Among the speakers were representatives from both the Swiss and Georgian governments as well as the private sector. Mr. Goga Japaridze, Commercial Director of PASHA Bank Georgia, also in attendance, noted the importance of such events for the promotion of investment opportunities that Georgia has to offer.

HALYK BANK COMPLETED JANUARY-FEBRUARY WITH 361 355 GEL PROFIT

SC Halyk bank completed January-February with 361 355 GEL profit (01/03/13 -13 800 loss). Credit portfolio of the bank is 82,7 million GEL (01/03/13 -49,4 million GEL), deposits - 7,7 million GEL (01/03/13-8,3 million GEL), overall obligations - 91,6 million GEL (01/03/13 - 54,2 million GEL).

Bank’s actives equal to 132,7 million GEL (01/02/13 - 77,1 million GEL), market share 0,8% (01/03/13 - 0,5%). People’s Bank of Kazakhstan (Halyk Bank) is a founder of the bank. The bank operates on Georgian market since the beginning 2008. Overall stock capital of the bank is 41 million GEL..

LOANS IN THE NATIONAL CURRENCY OF 125,5 MILLION GEL, SECURED WITH REAL ESTATE WERE INVEST BANK COMPLETED ISSUED IN FEBRUARY oans in the national currency of By March 1 secured loans portfolio in GEL equals JANUARY-FEBRUARY WITH 703 786 125,5 million GEL, secured with to 1,2 billion (01/03/13 -666,8 million GEL), 633 real estate were issued in February million are corporate loans, 582 million - indi(01/14 -118,8 million), in the foreign vidual. Fixed-term credit portfolio in the foreign MILLION GEL LOSS

currency - 330,4 million GEL (01/14 -171 million GEL). 245 million (74%) out of 330,4 million are corporate loans. 85,4 million is issued for individuals. In the GEL portfolio (125,5%) percent ratio is 68/32. 85,3 million is loan portfolio for the legal entities, 40,2 million - retail loans.

currency is 4,019 billion GEL. 2,5 billion comes on the legal entities, 1,5 billion GEL - in the retail loans. Total portfolio of the loans secured with real estate equals to 5,1 billion GEL (01/03/13 - 4,3 billion GEL) and 50,2% of the total lending (01/03/13 -49,4%).

SC Invest Bank completed JanuaryFebruary 2014 with 703 784 GEL loss (01/03/13 profit -1,671 million). By March 1 deposits equal to 10,3 million GEL (01/03/13 - 27,6 million GEL), credit portfolio - 8,8 million GEL (01/03/13 -7,06 million GEL).

Bank’s actives are 24,6 million GEL (01/03/13 -44,7 million GEL). Majoritarian stockholder of Investbank was recently changed and Alexander Kurtanidze became owner of 70% stocks. Temporary administration managed the bank during last 5 months.

PUBLICITY caucasian business week

April 7, 2014 #49

AZERBAIJAN April 7, 2014 #49

caucasian business week

U.S. AFTER MORE GAS FROM AZERBAIJAN

PRESIDENT ALIYEV RECEIVES UNWTO SECRETARY-GENERAL

zerbaijani President Ilham Aliyev has received Secretary-General of the United Nations World Tourism Organization (UNWTO) Taleb Rifai on April 3, AzerTag state news agency reported. The sides noted the development of tourism in Azerbaijan, particularly the creation of the state-

of-the-art alpine tourism infrastructure. They stressed the importance of the Baku-hosted 13th Azerbaijan International Travel & Tourism Fair and the 57th Meeting of the UNWTO Commission for Europe. President Aliyev and Taleb Rifai also discussed prospects for expanding Azerbaijan-UNWTO cooperation, as well as tourism potential of Azerbaijan.

EXCELLENT ORGANIZATION OF FIRST EUROPEAN GAMES IS PRIMARY GOAL: MEHRIBAN ALIYEVA

zerbaijani First Lady, President of the Heydar Aliyev Foundation Mehriban Aliyeva attended the third sitting of the Coordination Committee of the Baku 2015 European Games on April 3. The sitting was preceded by a meeting of Aliyeva, who is also Chairperson of the Organizing Committee of the Games, with President of the European Olympic Committees Patrick Hickey, AzerTag state news agency reported. They discussed a wide range of issues, including bilateral cooperation and preparations for the Baku 2015 European Games. Speaking to the Sitting of the Coordination Committee, Aliyeva praised cooperation between Azerbaijan and the European Olympic Committees. “Our cooperation with the European Olympic Committees is built on strong foundations,” she said. Aliyeva said Azerbaijan had hosted a number of international events, noting the importance of the recommendations of the European Olympic Committees related to the organization of the inaugural European Games in the Azerbaijani capital. “Ensuring excellent organization of the first European Games is our primary and common goal. Azerbaijan is determined to hold these Games in compliance with the Summer Olympic Games standards. Sport infrastructure of our country will allow us to excellently organize the Games,” the First Lady said. Aliyeva highlighted the preparations for the Games: “The preparations will end in time, which is evidenced by the speed of construction work at Water Sports Palace, National Gymnastics Arena, Baku Shooting Center, Baku Olympic Stadium and other facilities, and reconstruction

of the existing sport infrastructure.” “The National Gymnastics Arena is almost ready. We plan to host European Gymnastics Championship there this June,” Aliyev said. The First Lady noted that the Azerbaijani government attaches special importance to preparations for the first European Games. “The city residents and the entire sport community of the country are enthusiastically following the course of the preparatory work. I believe this support will help us. We will do our best to use the Baku 2015 European Games to set a benchmark,” Aliyeva said. Hickey, in turn, praised the preparations for the inaugural Baku European games led by Aliyeva. He said a lot of work had been done since the second Sitting of the Coordination Committee. Hickey said the Baku 2015 European Games were a qualifying event for the Summer Olympic Games that would be hosted by Brazil in 2016. Chairman of the Coordination Committee, President of the Hellenic Olympic Committee Spyros Capralos said Azerbaijan had made huge success in a short period of time in terms of the preparations for the first European Games. Azerbaijani Minister of Youth and Sport Azad Rahimov said Baku would organize several international tournaments before hosting the European Games, adding “this will be essential in terms of testing the infrastructure”. Chief Operating Officer of the Baku 2015 European Games Jim Scherr lauded the Azerbaijani government’s assistance to ensuring perfect organization of the Baku 2015 Games. Director of Sport of the Baku 2015 European Games Operation Committee Pierce O’Callaghan said inclusion of eight Olympic qualifying sports in the program of the Baku Games was what increased the event`s importance. Following the Sitting of the Coordination Committee, Azerbaijani President Ilham Aliyev has received president of the European Olympic Committees Hickey. Hickey noted that effective discussions had been carried out over preparatory work for the first European Games during the third Sitting of the Coordination Committee of the Baku 2015 European Games. He also praised what had been done in Azerbaijan to ensure excellent preparations for the Games. President Aliyev and Hickey also exchanged views on prospects for cooperation between Azerbaijan’s relevant agencies and the European Olympic Committees.

he U.S. and the EU have a lot of work to do in order to diversify their energy supply and getting more gas from Azerbaijan is on today’s agenda,” U.S. Secretary of State John Kerry said at the U.S.-EU Energy Council Meeting in Brussels on April 2. “Our agenda today, or at least part of it, is to look at how do we get more natural gas through what folks call the Southern corridor, from Azerbaijan to Turkey and on to Europe,” Kerry said. He went on to say that there are also other opportunities, including LNG terminals planned across Europe, and pipelines that can get gas to customers. “But we, all of us, have to make certain that we are not dependent on one single source of energy,” Kerry added. The gas which will be produced at the second stage of Azerbaijan’s Shah Deniz field development will be the main source of the Southern Gas Corridor, which envisages the transportation of the Caspian gas to the European markets. Earlier Deputy Vice-President of Azerbaijan’s state energy company SOCAR Vitaliy Baylarbayov said the Southern Gas Corridor can speed up the development of connecting pipelines in

Southern Europe. He made the remark during a presentation of the Southern Gas Corridor at the Center for Strategic and International Studies in Washington. Baylarbayov emphasized the significance of the Southern Gas Corridor in ensuring Europe’s energy security. The presentation was attended by U.S. government officials, academics, and energy professionals based in Washington. Baylarbayov also presented the project in Houston at CERAWeek, one of the energy industry’s main forums for business leaders and government officials. He gave a lecture on the Southern Gas Corridor to faculty and students from all around the world at the Harvard University’s John F. Kennedy School of Government. The Shah Deniz consortium announced the selection of TAP as the main route for transporting its gas to Europe in late June. Another pipeline which was vying for Azerbaijan’s gas transportation to Europe was Nabucco West. The selection of TAP marked the start of implementing the Southern Gas Corridor project that will allow Europe to diversify its supply sources and increase energy security, and enable Azerbaijan to acquire a new market-Europe.

SOCAR TO INCREASE INVESTMENT IN UKRAINE DESPITE UNSTABLE SITUATION

zerbaijan’s State Energy Company SOCAR is planning to increase its investment in Ukraine, despite unstable political and economic situation in the country. SOCAR office in Ukraine told Trend Agency on April 2 that the company’s plans remain unchanged. It intends to continue the construction of filling station complexes in Ukraine. “The company plans to expand its filing station complex network in Ukraine by 50 percent by autumn 2014. Additionally, it is expected to open new complexes in those provinces of Ukraine where the company wasn’t previously represented,” SOCAR Energy Ukraine said. SOCAR, which is keen on expanding operations in the retail oil products market abroad, is involved in exploring oil and gas fields, producing, processing, and transporting oil, gas, and gas condensate, marketing petroleum and petrochemical products in the domestic and international markets, and supplying natural gas to industry and the public in Azerbaijan.

SOCAR Ukraine, which represents SOCAR in Ukraine, owns over 60 refueling stations in the country. Some 38 gas stations are operating under the SOCAR brand in the Kyiv, Odessa, Lviv, Nikolaevsk, Rovensk, Cherkasy, Khmelnytsky and Poltava regions of Ukraine. Azerbaijan’s energy giant SOCAR continues to steadily develop its filling stations network both in the capital of Ukraine and other regions. It provides the Ukrainians with quality European oil products in order to strengthen its position in Ukraine’s fuel market. SOCAR invested over $160 million in the development of business in Ukraine from 2009 to 2013. The company’s investments in social and charitable initiatives in this country amounted to over $5 billion in the mentioned period. Currently, the company owns gas stations in Azerbaijan, Switzerland, Georgia and Ukraine. It has representative offices in Georgia, Turkey, Romania, Austria, Switzerland, Kazakhstan, Britain, Iran, Germany and Ukraine, and trading companies in Switzerland, Singapore, Vietnam, Nigeria, and other countries.

ADB TO INVEST IN AZERBAIJAN BRIDGE RECONSTRUCTION PROJECT

he Asian Development Bank (ADB) is set to finance a project to construct some bridges on Aghstafa-PoyluGeorgian border highway. “The loan worth $45 million will be spent on construction of four bridges (one railway viaduct and three bridges across the river),” the bank said. The loan will cover only some parts of the funds needed for mentioned project. The total cost of the project is estimated at $58 million. The Aghstafa-Poylu-Georgian border highway was commissioned in January 2014. The total length of the highway is 59 kilometers running with two lanes. The construction of the road began in November 2011 and ended in December 2013. As a result of the construction, the road was transferred from the third to the second technical category. ADB loan funds are part of the last tranche of the first multitranche financing facility package intended for road financing. The multitranche package was approved with $500 million in August 2007. Around $400 million of this amount was allocated by ADB for construction of the Masalli-Astara road, while some $55.4 million was allocated for

financing one part of the project for construction and expansion of the Ganja circular road. The ADB active credit portfolio in the country has reached $1.2 billion. ADB was established in 1966 and has 67 members. The bank’s headquarters is located in the capital of the Philippines, Manila. Azerbaijan joined ADB on December 22, 1999. The country’s share in the bank’s capital is 0.5 percent. ADB’s leading shareholders are Japan and the U.S (31.2 percent of the total share capital), India and China (12.8 percent), Australia, South Korea and Canada (16 percent) and so on.

12 RUSSIA’S BINBANK TO BUY SUBSIDIARY OF UKRAINE’S PRIVATBANK

CIS GAS PRICE FOR UKRAINE TO RISE TO $485 – GAZPROM HEAD

ussian lender Binbank said it could buy the Moscow subsidiary of Ukraine’s Privatbank in two weeks, Reuters reported. After Russia’s central bank put Moskomprivatbank under temporary administration last month to prevent its bankruptcy, the bank’s Ukrainian owners said it was a victim of “political tensions” between Moscow and Kiev

KRAINE BANS RUSSIAN CONFECTIONERY, FISH PRODUCTS

kraine’s consumer rights watchdog on Thursday banned sales of Russian-made confectionery, cheese and fish products, citing product-labeling violations, RIA Novosti reported. Products made by Russia’s famous chocolate factories Krasny Oktyabr, Rot Front, and Babayevsky Concern were targeted. Authorities in Kiev also banned some fish products after reportedly conducting checks of the products. Russia’s food safety watchdog Rosselkhoznadzor dismissed described the ban as violation of the international law and procedures on laboratory checks. Ukraine has failed to officially inform Russia of the ban.

JEWELRY PRODUCTION IN ARMENIA IN TWO MONTHS DECLINE BY 51 PERCENT TO 1.7 BILLION DRAMS

ewelry production in Armenia in the first two months of 2014 amounted to 1.7 billion drams, a 51% decline when compared to the same period in 2013, according to the National Statistical Service (NSS). In January and February local jewelry plants produced 91.5 kg of jewelry, down from 115.5 kg in the same period in 2013 (down 20.8%). Diamond production slashed by 48.7 percent to 9,551 carats, NSS said. It said export of precious and semiprecious stones, precious metals and items grew by almost 20 percent to about $32.9 million (up 19.5%) , while import of the same types of goods increased by 34 percent to $54.9 million. ($1 413.98 drams).

UZBEKISTAN JOINS CIS FREE TRADE ZONE

oscow announced that Uzbekistan has joined the CIS free trade zone. Russian President Vladimir Putin signed a law on ratification of free trade zone protocol on Uzbekistan. The law was passed by the Russian’s State Duma and approved by country’s Federation Council in March, 2014. Meanwhile, it had been passed by the Legislative Chamber of the Oliy Majlis (lower house of the Uzbek parliament), and the country’s Senate in December, 2013. President of Uzbekistan Islam Karimov signed a law in late December, 2013. The protocol is designed for more active involvement of Uzbekistan in CIS, as well as harmonizing trade regimes of the Customs Union members with Uzbekistan. The agreement provides an appropriate ground for expanding mutual trade between the countries of the Customs Union and Uzbekistan. At the same time agreement provisions on the FTA apply to Uzbekistan in a number of terms. Based on the law, until 31 December, 2020, or Uzbekistan’s accession to the WTO, Uzbekistan and the contracting sides would be exempt from the obligation to provide national treatment in mutual trade. They should follow procedures for dispute resolution through bilateral negotiations. Russia, Ukraine, Belarus, Kazakhstan, Armenia, Kyrgyzstan, Moldova and Tajikistan signed the Free Trade Agreement of the Commonwealth of Independent States (CISFTA) on October 18, 2011.

April 7, 2014 #49

caucasian business week

azprom CEO Aleksey Miller has announced Ukraine will no longer receive the $100 discount it enjoyed under the Kharkov Agreement, and will pay $485 per thousand cubic meters starting from April. The statement came after Miller met with the head of Ukraine’s state gas company Naftogaz, Andrey Kobolev in Moscow. Naftogaz is responsible for the majority of Ukraine’s unpaid gas bills. The price rise follows a cancellation of the Black Sea hosting deal. On Wednesday President Vladimir Putin signed a Federal law ending Russia’s

commitment to the Kharkov Agreement, as the Black Sea port of Sevastopol is now under jurisdiction of the Russian Federation. Under the April 30 2010 Kharkov Agreement, Russia guaranteed Ukraine a $100 gas discount in return for using the Sevastopol port to host its naval fleet. The decision to end duty-free gas exports to Ukraine is supported by Russia’s Prime Minister Dmitry Medvedev, who said Gazprom’s should apply general tariffs on exported gas for everybody. “You should be guided by the commonly set

export duty rates for gas without applying any discounts and preferences,” Medvedev told Gazprom head. Half of natural gas imported by Ukraine comes from Russia. The country owes $2.2 billion for gas that has been delivered in 2013 and 2014, according to Miller. “We’ll hope that in the near future Ukraine will start paying its debts and current supplies, though we see that the situation isn’t improving, but only getting worse,” Miller said. Last December, Russia offered Ukraine’s Yanukovich-led government a $15 billion loan and a 33 percent discount on natural gas; a lifeline to help its faltering economy. Following the Kiev protestsand a new government taking over, both deals have been cancelled. On April 1 the price Ukraine paid for gas went up 44 percent to $385, after Kiev failed to meet its debt repayments. On May 1, everyday Ukrainian consumers, and not just gas utilities, will start paying 50 percent more for gas, part of a planned price hike. Before Naftogaz bought natural gas from Russia at a discounted price and sold to customers for even cheaper, which has led to massive debts for the state monopoly. Naftogaz, which is on the verge of bankruptcy, says it anticipates more than $7 billion in losses this year. Ukrainians may be pinched further by the terms of an IMF loan, which conditions the state to jettison gas subsidies, and has customers pay more.

FORD SOLLERS AXES 700 JOBS IN RUSSIA

he US/Russian car making joint venture between Ford and Sollers is cutting 700 jobs from its plant in St Petersburg. The companies say a slowing economy and weakening ruble are a huge burden, and experts say other western carmakers could follow suit. A shrinking car market in Russia is dragging down demand for brand’s best selling Ford Focus and Mondeo models, which has forced the plant to a single shift. The manufacturer employs around 5,500 people in St Petersburg and Tatarstan and intends to suspend production for 58 days from April to June. “We regret that the company is forced to reduce staff, however this measure is necessary for the company in the current conditions,” Gazeta.ru quotes Ted Kannis, the president and CEO of Ford Sollers. “Weakening of the ruble has an additional negative impact on company activities. Adopting new production plans under the current market situation, and also the timely start of new products will help us to minimize the influence of unfavorable economic factors on our business,” Sollers added. The falling ruble makes it more expensive for au-

tomakers to buy parts from abroad, and product prices rise. On March 3 the ruble reached an historical low at 36.5 to the dollar. Russia’s central bank warned on Wednesday that economic growth would “most probably” fall below 1 percent in 2014. The bank’s governor Elvira Nabiullina said the bank’s previous 2014 growth forecast in the range of 1.5-1.8 percent was now unlikely to be met. Regional authorities together with Ford Sollers intend to help soften the blow of the job cuts. According to a report by the Association of European Businesses (AEB), during the first two months of 2014 Ford sales in Russia decreased by 21 percent, to 10,500 cars compared to the similar period last year. The demand for the best selling Ford Focus was halved. In a year the Focus fell from 8th position to the 17th in the AEB rating of the most popular cars, sales having dropped 41 percent. The Ford Sollers plans to massively cut workers at the enterprise in Vsevolozhsk, as well as stopping production for two months, hasn’t surprised experts. They think a similar situation could affect car makers who are not producing cheap model lines. So, Nissan and Skoda could follow in Ford’s footsteps.

According to the managing partner of University of Sales Vitaly Novikov, Ford had seriously lost its position including price competitiveness. “The best selling Ford Focus model becomes more expensive than its rivals. Today to become the owner of a Ford Focus will costs you approximately 600,000 rubles ($17,100), while the Renault Fluence price tag starts from about 500,000 ($14,200). The customer doesn’t really care, what is important is the initial base price, and the minimum things such as two air bags, AC and two power windows. Today several brands sell these vehicles at a cheaper price than Ford,” Novikov told RBC.

KAZAKH PRESIDENT APPOINTS NEW PM

azakh President Nursultan Nazarbayev has appointed a new prime minister for the country. Based on a presidential decree signed on April 2, Karim Massimov has been appointed as the new Prime Minister of the country. Massimov replaced Serik Akhmetov in the post. The decree comes into force on the date of its signing but the current cabinet will remain in office until the approval of the new cabinet. Earlier Massimov served as the head of Kazakhstan’s Presidential Administration. Ex-PM Akhmetov, who headed the Kazakh’s cabinet since September 2012, announced his resignation at a cabinet meeting on April 2. According to the Kazakh constitution, the resignation of the chairman of the Cabinet of Ministers means the resignation of the whole cabinet. RESIGNATION DUE TO DRASTIC CHANGES INSIDE AND OUTSIDE OF COUNTRY Kazakh political analyst Daniyar Ashimbayev believes Kazakh cabinet’s resignation was due to drastic changes in the external and internal situations. “Inside and outside changes - devaluation of national currency and the unrest in Ukraine

- made the change in the cabinet unavoidable,” Ashimbayev told Trend Agency. He said the current change in the cabinet is not at the level of cabinet buildup but power distribution. “This means the executive branch would become more active, flexible and efficient to cope with the rapid changes inside and outside of the country,” he added. “Meanwhile, an excessive rivalry emerged between the president’s administration headed by Karim Massimov and Kazakh government headed by Serik Akhmetov,” Ashimbayev said. CABINET RESIGNATION RESULT OF KAZAKH PRESIDENT’S POLICIES Kazakh political scientist, Doctor of Political Sciences Dosym Satpayev believes resignation of the cabinet was not a surprise. On the contrary, it was a belated move resulting from president’s policies. “Some experts expected resignation of the present government at the end of last year following the strong criticism voiced by the head of state,” Satpayev told Trend Agency. Satpayev also noted today Kazakhstan is facing risks inside and outside.

“The external risks are problems with the Customs Union and the Common Economic Space, which cause irritation in Kazakhstan, the conflict between Russia and the West over Ukraine,” Satpayev said. The expert noted Nazarbayev relies on Massimov, who previously served as PM during the global financial crisis, as crisis manager. “Kazakhstan managed to emerge from the crisis due to serious financial investments in the country’s economy when Massimov was the country’s PM,” Satpayev added.

WORLD NEWS April 7, 2014 #49

caucasian business week

EU, US REAFFIRM ‘ENERGY T INDEPENDENCE’ GAMEPLAN

EUROZONE UNEMPLOYMENT RATE AT 11.9% IN FEBRUARY

S and EU diplomats have said they will help Ukraine cut back on Russian gas, and also promised to help diversify the Russian-dominated European energy market, a difficult long term task for energy-dependent EU countries. US Secretary of State John Kerry, EU foreign policy chief Catherine Ashton and other energy advisors met in Brussels on Wednesday for an energy summit. “Developments in Ukraine have brought energy security concerns to the fore and prove the need to reinforce energy security in Europe,” the summit statement said. Ukraine is the main transit route for Europebound Russian gas exports - about a third of Europe’s gas passes through the country - and is therefore crucial to energy stability. Russia has invested billions into European gas networks and has partnerships with German, Italian, and French utilities. Italy’s Eni, France’s EDF, and Germany’s Wintershall are all partners in Gazprom’s $45 billion South Stream project,

and additionally to another pipeline that bypasses Ukraine to deliver gas to Europe. The council said energy ties with Russia “must be based on reciprocity, transparency, fairness, non-discrimination, openness to competition and continued cooperation to ensure a level playing field for the safe and secure supply of energy.” The strategy of “leveling the playing field” will include expanding the Southern Gas Corridor, which stretches from Azerbaijan to Turkey to Europe, and has the potential to meet 20 percent of EU gas demand. On the sidelines of the meeting, Gazprom CEO Aleksey Miller met with Guenther Oettinger, the EU’s energy commissioner, and Frank-Walter Steinmeier, Germany’s foreign minister, and discussed German-Russian energy cooperation. On Thursday, the head of Naftogaz, Ukraine’s state-owned gas company, will hold talks in Moscow with energy ministers. TOWARDS ENERGY INDEPENDENCE Ukraine imports nearly 50 percent of its natural gas from Russia, a country it now finds itself at

PUTIN’S PIPELINES

How reliant is Europe on Russian gas?

HE crisis in Ukraine has alarmed the rest of Europe—not just because of the prospect of war, or chaos on its borders, but because a row with Russia over Ukraine’s unpaid gas bill threatens energy security in the rest of the continent. Europe could survive a short interruption of a few weeks to the pipelines across Ukraine, assuming that other Russian gas kept flowing. The European Union has built in more resilience since the last up-

set in Ukraine, in 2009. Now it is hurrying to reduce its reliance further. But measures such as better storage, more interconnectors and diversification of supply will take several years. In the long term Europe could import more liquefied natural gas as new supplies come on stream, chiefly from America. It could also take advantage of abundant Norwegian hydro-power. For now, though, Europe cannot do without Russian gas—but then again, the Kremlin cannot do without its European customers.

diplomatic ends with, as it moves towards EU integration. Though the country’s 2020 goal of complete“full gas sufficiency” seems far off, the US and EU are prepared to help, at least, with diversification. The US-EU Energy Commissions said Ukraine can move away from Russian gas by increasing gas storage capacity, reverse flow of gas, and working with the International Monetary Fund to become an competitive energy economy. Increasing the number of storage facilities or increasing the capacity of existing sites could be a capital heavy task that Ukraine’s economy is not ready to tackle alone. However, if parts of Ukraine’s energy sector are privatized, investment in storage facilities is viable. Reverse-flow, or getting European countries like Slovakia, Poland, Hungary or Germany, to begin sending gas to Ukraine, is another option. “We expect that Naftogaz can be get 20 billion cubic meters of gas from reverse flow. Its price is lower than the Russian, and now averages $ 350 per 1 thousand cubic meters, “ he said. Helping Ukraine develop its vast shale reserves, believed to be the third largest in Europe, will also be priority of the US-EU commission. Before the Maidan protests broke out in November, Kiev secured a $10 billion deal with Chevron to explore shale fields in western Ukraine. Much of Europe hopes to emulate the US shale boom, which has brought energy independence. Another option is turning to nuclear energy, as Ukraine is home to Europe’s largest nuclear plant, Zaporizhzhia in southeast Ukraine. Russia still has a strong hold on gas pipelines and fields in Ukraine, and Gazprom, Russia’s largest state-owned gas producer, has $1.7 billion of debt leverage over Ukraine, which hasn’t paid its gas bills since 2013. Rising debt caused Gazprom to raise prices for the second quarter of 2014 by 44 percent to $385.50 per thousand cubic meters, a $117 increase.

he unemployment rate in the eurozone remained at 11.9 percent in February, after downward revisions of the past few months, Reuters reported. Eurostat said on Tuesday that 18.97 million people in the block were unemployed in February, a decrease of about 35,000 from last month. This equated to a rate of 11.9 percent, the same as in January. Eurostat, which had initially reported a figure of 12 percent in January, said the rate had been stable since October 2013.

GERMAN RETAIL SALES UP 1.3% IN FEBRUARY

erman retail sales rose 1.3 per cent month-on-month in February, putting in a much better performance than expected, the Financial Times reports. The figures from the Federal Statistics Office compared to growth of 1.7 percent in January, which was revised down from 2.5 percent. Retail sales were 2.0 percent higher year-on-year, much better than the 0.9 percent recorded the previous month.

EUROPEAN CENTRAL BANK HOLDS KEY INTEREST RATE AT 0.25%

he European Central Bank on Thursday held its key interest rates unchanged for the fifth month in a row. It left the central “refi” or refinancing rate unchanged at 0.25 percent at its monthly policy meeting, AFP reported, citing an ECB statement. The bank also held two other key rates - the marginal lending rate and the deposit rate - unchanged at 0.75 percent and zero percent respectively.

INFLATION RATE IN EUROZONE DROPS TO 0.5%

he eurozone’s inflation rate in March decreased for the third consecutive month to a new low of 0.5 percent, AP reported. The preliminary estimate for the bloc published by the European Union’s statistics agency Monday was down from February’s annual rate of 0.7 percent. The core inflation rate — excluding volatile food and energy costs — also dropped from 1 percent in February to 0.8 percent in March, according to Eurostat. The figures are likely to add pressure on the European Central Bank to ease its monetary policies.

EU COZIES UP TO CHINA, AS RELATIONS WITH RUSSIA SOUR

hinese President Xi Jinping is wrapping up his official European tour. His hosts have pampered the head of state and his 200-strong business entourage as the two economic blocs work towards a multi-billion dollar free trade agreement. The world’s second-biggest economy is a strategic ally for the EU, especially as relations with Moscow have become frosty over action in Ukraine. Europe is cozying up to Chinese industry, concerned the ongoing dispute between the EU and Russia over Ukraine could affect trade relations. China is pushing a multi-billion dollar free-trade agreement with Europe’s $17 trillion economy, focusing on Germany, the most important partner within the EU. Net trade is only higher with the USA. In return, the EU wants China to open up investment opportunities, which will attract more foreign money to China. The tour began in the Netherlands, with legs in France, Germany, and Belgium, meeting with US President Barack Obama on the sidelines of the nuclear summit in The Hague. Annual trade between China and the EU is $588.6 billion, according to the most recent European Commission data. Europe wants to keep a good rapport with China, even if that means disregarding previous complaints of human rights abuse. China is forecast to become the world’s largest economy as early as 2018, but depending on the pace of economic growth, maybe not until 2028. The EU exports $148 billion annually to China in machinery and equipment, including automobiles from BMW and Volkswagen. The EU imports even more from China, about $280 billion per year in raw materials, electronics, clothing, and toys. China’s annual GDP is $8.6 trillion, but grouped together the 28-state EU has an economy twice the size.

ADVANTAGE RUSSIA Europe may try and boost trade with China to punish Russia, but such a move may just benefit China, and have little effect on Russia. “Sanctions and this whole uproar over Crimea is simply foolishness on the part of the EU, but the EU has nothing to gain from sanctions on Russia,” geopolitical analyst William Engdahl told RT in Berlin. Russia has very strong ties with its eastern neighbor, about $410 billion in annual trade and several oil and gas projects in the works. The largest is a 25-year $270 billion deal between Russia’s state-owned Rosneft and China’s National Petroleum Company. Many Russian companies have made the first move and have begun to re-orient their business towards booming eastern markets, and away from Europe and the US. The CEO of Norilsk Nickel, Vladimir Potanin said his company won’t rule out increasing supplies of nickel and palladium to China and Japan.

PUBLICITY caucasian business week

April 7, 2014 #49

TBILISI GUIDE April 7, 2014 #49

Embassy United States of America Embassy 11 Balanchivadze St., Dighomi Dstr., Tbilisi Tel: 27-70-00, 53-23-34 E-mail: tbilisivisa@state.gov; askconsultbilisi@state.gov United Kingdom of Great Britain and Northern Ireland Embassy 51 Krtsanisi Str., Tbilisi, Tel: 227-47-47 E-mail: british.embassy.tbilisi@fco.gov.uk Republic of France Embassy 49, Krtsanisi Str. Tbilisi, Tel: 272 14 90 E-mail: ambafrance@access.sanet.ge Web-site: www.ambafrance-ge.org Federal Republic of Germany Embassy 20 Telavi St. Tbilisi Tel: 44 73 00, Fax: 44 73 64 Italian RepublicEmbassy 3a Chitadze St, Tbilisi, Tel: 299-64-18, 292-14-62, 292-18-54 E-mail: embassy.tbilisi@esteri.it Republic of Estonia Embassy 4 Likhauri St., Tbilisi, Tel: 236-51-40 E-mail: tbilisisaatkond@mfa.ee Republic of Lithuania Embassy 25 Tengiz Abuladze St, Tbilisi Tel: 291-29-33 E-mail: amb.ge@urm.lt Republic of Latvia Embassy 16 Akhmeta Str., Avlabari, 0144 Tbilisi. E-mail: embassy.georgia@mfa.gov.lv Greece Republic Embassy 37. Tabidze St. Tbilisi Tel: 91 49 70, 91 49 71, 91 49 72 Czech RepublicEmbassy 37 Chavchavadze St. Tbilisi Tel: 291-67-40/41/42 E-mail: czechembassy@gol.ge Web-sait: www.mzv.cz Japan Embassy 7 Krtsanisi St. Tbilisi Tel: 75 21 11, Fax: 75 21 20 Kingdom of Sweden Embassy 15 Kipshidze St. Tbilisi Tel: +995 32 2 55 03 20 , Fax: +995 32 2 22 48 90 Kingdom of the Netherlands Embassy 20 Telavi St. Tbilisi Tel: 27 62 00, Fax: 27 62 32 People’s Republic of China Embassy 52 Barnov St. Tbilisi Tel: 225-22-86, 225-21-75, 225-26-70 E-mail: zhangling@access.sanet.ge Republic of Bulgaria Embassy 15 Gorgasali Exit, 0105 Tbilisi, Georgia Tel: +995 32 291 01 94; +995 32 291 01 95 Fax: +99 532 291 02 70 Republic of Hungary Embassy 83 Lvovi Street, Tbilisi Tel: 39 90 08; E-mail: hunembtbs@gmail.com State of Israel Embassy 61 Agmashenebeli Ave. Tbilisi Tel: 95 17 09, 94 27 05 Embassy of Swiss Confederation’s Russian Federation Interests Section Embassy 51 Chavchavadze Av., Tbilisi Tel: 291-26-45, 291-24-06, 225-28-03 E-mail: RussianEmbassy@Caucasus.net Ukraine Embassy 75, Oniashvili St., Tbilisi Tel: 231-11-61, 231-12-02, 231-14-54 E-mail: ukraina_pu@wanex.net; emb_ge@mfa.gov.ua Consular Agency: 71, Melikishvili St., Batumi Tel: (8-88-222) 3-16-00/ 3-14-78 Republic of Turkey Embassy 35 Chavchavadze Av., Tbilisi Tel: 225-20-72/73/74/76 E-mail: turkemb.tbilisi@mfa.gov.tr Address: 8, M. Abashidze str. Batumi, Georgia tel: (8-88-222) 7 47 90 Republic of Azerbaijan Embassy Kipshidze II-bl . N1., Tbilisi Tel: 225-26-39, 225-35-26/27/28 E-mail: tbilisi@mission.mfa.gov.az Address: Dumbadze str. 14, Batumi Tel: 222-7-67-00 Fax: 222-7-34-43 Republic of Armenia Embassy 4 Tetelashvili St. Tbilisi Tel: 95-94-43, 95-17-23, 95-44-08 E-mail: armemb@caucasus.net Web: www.armenianembassy.ge Consulate General, Batumi Address: Batumi, Gogebashvili str. 32, Apt. 16

caucasian business week Kingdom of Spain Embassy Rustaveli Ave. 24, I floor, Tbilisi Tel: 230-54-64 E-mail: emb.tiflis@maec.es Romania Embassy 7 Kushitashvili St., Tbilisi Tel: 38-53-10; 25-00-98/97 E-mail: ambasada@caucasus.net Republic of Poland Embassy 19 Brothers Zubalashvili St., Tbilisi Tel: 292-03-98 Email:tbilisi.amb.sekretariat@msz.gov.pl Web-site: www.tbilisi.polemb.net Republic of Iraq Embassy Kobuleti str. 16, Tbilisi Tel: 291 35 96; 229 07 93 E-mail: iraqiageoemb@yahoo.com Federative Republic of Brazil Embassy Chanturia street 6/2, Tbilisi Tel.: +995-32-293-2419 Fax.: +995-32-293-2416 Islamic Republic of Iran Embassy 80, I.Chavchavadze St. Tbilisi, Tel: 291-36-56, 291-36-58, 291-36-59, 291-36-60; Fax: 291-36-28 E-mail: iranemb@geo.net.ge United Nations Office Address: 9 Eristavi St. Tbilisi Tel: 225-11-26/28, 225-11-29/31 Fax: 225-02-71/72 E-mail: registry.geo@undp.org Web-site: www.undp.org International Monetary Fund Office Address : 4 Freedom Sq., GMT Plaza, Tbilisi Tel: 292-04-32/33/34 E-mail: kdanelia@imf.org Web-site: www.imf.ge Asian Development Bank Georgian Resident Mission Address: 1, G. Tabidze Street

Freedom Square 0114 Tbilisi, Georgia Tel: +995 32 225 06 19 E-mail: adbgrm@adb.org; Web-site: www.adb.org World Bank Office Address : 5a Chavchavadze Av., lane-I, Tbilisi, Georgia Tel: 291-30-96, 291-26-89/59 Web-site: www.worldbank.org.ge Regional Office of European Bank for Reconstruction and Development Address: 6 Marjanishvili St. Tbilisi Tel: 244 74 00, 292 05 13, 292 05 14 Web-site: www.ebrd.com Representation of the Council of Europe in Georgia Address : 26 Br. Kakabadze, Tbilisi Tel: 995 32 291 38 70/71/72/73 Fax: 995 32 291 38 74 Web-site: www.coe.ge

Hotels in Georgia TBILISI MARRIOTT Tbilisi , 13 Rustaveli Ave. Tel: 77 92 00, www.marriott.com COURTYARD MARRIOTT Tbilisi , 4 Freedom Sq. Tel: 77 91 00 www.marriott.com RADISSON BLU HOTEL, TBILISI Rose Revolution Square 1 0108, Tbilisi Tel: +995 32 402200 radissonblu.com/hotel-tbilisi RADISSON BLU HOTEL, BATUMI Ninoshvili Str. 1, 6000 Bat’umi, Georgia Tel: 8 422255555 http://radissonblu.com/hotel-batumi SHERATON METECHI PALACE Tbilisi , 20 Telavi St. Tel: 77 20 20, www.starwoodhotels.com SHERATON BATUMI 28 Rustaveli Street • Batumi Tel: (995)(422) 229000 www.sheratonbatumi.com HOLIDAY INN TBILISI Business hotel Addr: 1, 26 May Square Tel: +995 32 230 00 99 E-mail: info@hi-tbilisi.com Website: http://www.hi-tbilisi.com BETSY’S HOTEL With Marvellous Tbilisi Views Addr: 32/34 Makashvili St. Tbilisi Tel: +995 32 293 14 04; +995 32 292 39 96 Fax: +995 32 99 93 11 E-mail: info@betsyshotel.com Website: http://www.betsyshotel.com

Restaurants CHARDIN 12 Tbilisi , 12 Chardin St. , Tel: 92 32 38 CHINA TOWN Tbilisi , 44 Leselidze St. (ent. from Chardin St.) Tel: 43 93 08, 43 93 80, Fax: 43 93 08 BREAD HOUSE Tbilisi , 7 Gorgasali St. , Tel: 30 30 30 BUFETTI - ITALIAN RESTAURANT Tbilisi , 31 I. Abashidze St. , Tel: 22 49 61 DZVELI SAKHLI Tbilisi , 3 Right embankment , Tel: 92 34 97, 36 53 65, Fax: 98 27 81 IN THE SHADOW OF METEKHI Tbilisi , 29a Tsamebuli Ave. , Tel: 77 93 83, Fax: 77 93 83 PICASSO Tbilisi , 4 Miminoshvili St. , Tel: 98 90 86 SAKURA - JAPANESE RESTAURANT Tbilisi , 29 I. Abashidze St. , Tel: 29 31 08, Fax: 29 31 08 SIANGAN - CHINESE RESTAURANT Tbilisi , 41 Peking St , Tel: 37 96 88 VERA STEAK HOUSE Tbilisi , 37a Kostava St , Tel: 98 37 67 BELLE DE JOUR 29 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 VONG 31 I. Abashidze str, Tbilisi Tel: (+995 32) 230 30 30 BRASSERIE L’EXPRESS 14 Chardin str, Tbilisi Tel: (+995 32) 230 30 30 TWO SIDE PARTY CLUB 7 Bambis Rigi, Tbilisi Tel: (+995 32) 230 30 30 LOFT 11. I. Mosashvili str, Tbilisi Tel: (+995 32) 230 30 30 RESTAURANT NERO 21 Abano Street, Tbilisi Tel: (+995 32) 292 10 15

SH. RUSTAVELI STATE THEATRE Tbilisi. 17 Rustaveli Ave. Tel: 93 65 83, Fax: 99 63 73 TBILISI STATE MARIONETTE THEATRE Tbilisi. 26 Shavteli St. Tel: 98 65 89, Fax: 98 65 89 THEATRE OF PANTOMIME Tbilisi. 37 Rustaveli Ave. Tel: 99 63 14, (77) 41 41 50 Z. PALIASHVILI TBILISI STATE THEATRE OF OPERA AND BALLET Tbilisi. 25 Rustaveli Ave. Tel: 98 32 49, Fax: 98 32 50

Galleries ART GALLERY LINE Tbilisi. 44 Leselidze St. BAIA GALLERY Tbilisi. 10 Chardin St. Tel: 75 45 10 GALLERY Tbilisi. 12 Erekle II St. Tel: 93 12 89 GEORGIAN NATIONAL MUSEUM - PICTURE GALLERY Tbilisi. 11 Rustaveli Ave. Tel: 98 48 14 KARVASLA’S EXHIBITION HALL Tbilisi. 8 Sioni St. Tel: 92 32 27, KOPALA Tbilisi. 7 Zubalashvilebi St. Tel: 99 99 02, Fax: 99 99 02 MODERN ART GALLERY Tbilisi. 3 Rustaveli Ave. Tel: 98 21 33, Fax: 98 21 33 M GALLERY Tbilisi. 11 Taktakishvili St. Tel: 25 23 34 ORNAMENT - ENAMEL GALLERY Tbilisi. 7 Erekle II St. Tel: 93 64 12, Fax: 98 90 13

Akhvledianis Khevi N13, Tbilisi, GE. +995322958377; +995599265432

Cinemas AKHMETELI Tbilisi. “Akhmeteli” Subway Station Tel: 58 66 69 AMIRANI Tbilisi. 36 Kostava St. Tel: 99 99 55, RUSTAVELI Tbilisi. 5 Rustaveli Ave. Tel: 92 03 57, 92 02 85, SAKARTVELO Tbilisi. 2/9 Guramishvili Ave. Tel: 8 322308080,

Theatres A. GRIBOEDOV RUSSIAN STATE DRAMA THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 93 58 11, Fax: 93 31 15 INDEPENDENT THEATRE Tbilisi. 2 Rustaveli Ave. Tel: 98 58 21, Fax: 93 31 15 K. MARJANISHVILI STATE ACADEMIC THEATRE Tbilisi. 8 Marjanishvili St. Tel: 95 35 82, Fax: 95 40 01 M. TUMANISHVILI CINEMA ACTORS THEATRE Tbilisi. 164 Agmashenebeli Ave. Tel: 35 31 52, 34 28 99, Fax: 35 01 94 METEKHI – THEATRE OF GEORGIAN NATIONAL BALLET Tbilisi. 69 Balanchivadze St. Tel: (99) 20 22 10 MUSIC AND DRAMATIC STATE THEATRE Tbilisi. 182 Agmashenebeli Ave. Tel: 34 80 90, Fax: 34 80 90 NABADI - GEORGIAN FOLKLORE THEATRE Tbilisi. 19 Rustaveli Ave. Tel: 98 99 91 S. AKHMETELI STATE DRAMATIC THEATRE Tbilisi. 8 I. Vekua St. Tel: 62 59 73

THE BEST GEORGIAN HONEY OF CHESTNUTS,ACACIA AND LIME FLOWERS FROM THE VERY HART OF ADJARA MATCHAKHELA GORGE IN THE NETWORK OF GOODWILL, NIKORA AND SMART

PUBLICITY caucasian business week

April 7, 2014 #49