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Gov’t not Abandons an Idea of Creating Development Finance Corporation and Identifies Priorities

After months of discussions and  postponement of  the bill submitted to the Parliament, the government does not give up an idea of the creation of the  Development Corporation and is working on the development of the corporation system and  structure.
“Commersant”  reports that the German Development Bank (KFW) will assist the Georgian government in establishing the  State Development Corporation.

The sectors which will be a priority for  the Georgian Development Corporation will be known by the end of April 2015.

According to  the parliamentary majority  leader David Saganelidze, KFW will provide about 350 000 Euro for a research about the prospects for the creation of such a structure in Georgia, and the findings will be presented to the government.

“The study should reveal which  sectors of the Georgian economy need  the potential of the corporation, which branches are most in need of public investment. Mostly, we are talking about large and long-term projects which are not subjects of interest of commercial banks, “- the MP notes.

As the majority leader  David Saganelidze  states, a few weeks ago he paid an official visit to China  in the frames of which  visited the China Development Bank, and held  several  working meetings. He says  that China is ready to assist in the training of specialists.

In the words of Saganelidze,  the Development Corporation in Georgia will significantly increase the potential of the economy.

The idea of creating the  State Development Corporation belongs to  the former Prime Minister Bidzina Ivanishvili. Originally it was planned to create a Development Bank, then it was decided to form a Development Corporation.

It will be created on the basis of the  Partnership Fund (PF), which manages state assets of the country.

The “Partnership Fund”  was established  3 years ago,over  the past year the government decided to reorganize it three  times and submitted to Parliament the packages of bill in a  form of legislative initiative.

According to the first variant, the “Partnership Fund”  had to be transformed into “Sovereign Fund”, but the government withdrew its legislative initiative back so that Parliament did not have time to start a discussion.

The Partnership Fund (which is fully government owned) has stakes in the key  public companies such as “Georgian Railway ” LLC,  “Georgian Oil and Gas Corporation”, “Georgian State Electric System”, “The Electricity System Commercial Operator” and Tbilisi electricity distribution company “Telasi”.