Seven of eight demands of international banks met on Georgia’s Anaklia port
By Gvantsa Gabekhadze
Thursday, May 23
The agreement on the seven of eight demands of the European Bank for Reconstruction and Development (EBRD), Overseas Private Investment Corporation (OPIC), Asian Development Bank (ADB) and the Asian Infrastructure Investment Bank (AIIB) regarding the 2, 5 billion USD Anaklia port which is expected to be built in Georgia has been reached, the Anaklia Development Consortium says.
The head of the Consortium, which will invest and is tasked to attract investments for the large-scale project connecting China with Europe, Levan Akhvlediani says that the eighth demand, which has not been decided so far, concerns securing the commercial risks of the port.
After the meeting with the representatives of the four foreign banks, which may not allocate 400 million USD for the project if their demands are not met, Georgian Infrastructure Minister Maia Tskitishvili said that the Georgian government will not cover the commercial risks.
“Negotiations are necessary to enable the banks to finance the project. As you know, some changes in the initial agreement have been proposed from the banks. We have an ongoing interaction about the most important issues. We held several meetings and expressed readiness for compromise, agreed most of the demands raised by the banks,” Tskitishvili said.
Akhvlediani says that the eighth demand regarding the securing of goods turnover might be settled with the involvement of one of the funds of the European Union.
The demands of the banks concern the development phases of the project and others.
Per the current agreement, the first phase of the project must be completed in three years after the construction begins. The first phase is due to be completed by November 20, 2020. The banks demanded a feasibility study of each stage and said that the port development should not be linked to any specific date and should start only after the feasibility study is done.
Another demand is about the 'golden share.' The banks' proposal is to significantly reduce the state impact mechanism as well as the golden share. Issues regarding the continuation of the terms, compensation and political force majeure were also raised.
One of the demands is related to the road and railway that will be connected to the port.
Here the banks require that works, resettlement, and all the process to be developed following the investors’ rules, which was not initially envisaged.
Demand is also about loan agreements. Following the current deal, the state has the right to approve the conditions of credit agreements, while the banks offer the state only to approve the amount and terms of the loan agreement.
After two years of discussions, the Georgian government selected the Anaklia Development Consortium in 2016 ahead of six other local and international companies to develop the mixed-cargo port on a build, operate and transfer basis.
The Anaklia Development Consortium will invest $2.5 billion in the Anaklia Deep Sea Port project.
The consortium was jointly established by local company TBC Holding and US firm Conti International.
The Anaklia Port’s mission is to create a new, faster maritime corridor between China and Europe, helping restore the historic Silk Road. Experts say that the port will strengthen NATO's interest in the Black Sea.
