WASHINGTON, D.C., May 12--The International Finance Corporation (IFC) has approved its first investment in the Republic of Georgia. IFC will invest up to US$2.9 million in the equity of the Georgian Glass and Mineral Water Company (GGMW). GGMW, a joint venture between the TBC Group of Georgia as well as Dutch and French investors, produces and distributes the famous Borjomi mineral water which comes from springs in Georgia's Borjomi Valley. IFC's investment will help finance a US$10 million investment program to modernize and upgrade an existing glass bottle manufacturing plant and two existing mineral water bottling facilities. The financing will also provide support to GGMW's distribution systems in Georgia and the CIS.
The Republic of Georgia is known throughout the Former Soviet Union for its mineral water resources which are located mainly in the Borjomi Valley. The naturally mineralized waters are one of Georgia's most valuable renewable natural resources. As recently as the mid-1980s, over 300 million 0.5 litre bottles of Borjomi water were sold annually throughout the CIS. However, the civil unrest in Georgia following the dissolution of the Former Soviet Union brought Borjomi mineral water production to a standstill in the early 1990s and only recently have operations been revived.
"Borjomi mineral water represents one of Georgia's most important potential exports to Russia and other CIS states," said Mr. Edward Nassim, Director of IFC's Europe Department. "We believe that IFC's investment in GGMW will not only assist in the re- establishment of Borjomi as a leading mineral water in the CIS but also will help develop Georgia's mineral water industry by setting international product and quality standards. IFC also believes that this project can serve as a model for the further development of the nascent Georgian private sector."
In addition to IFC's direct investment, the balance of the project cost will be provided by existing shareholders and the First Regional NIS Fund, a private investment fund partially sponsored by IFC and managed by Baring Asset Management. Trust funds were made available by the UK and Dutch governments to assess market, accounting, legal and environmental aspects of the project.
IFC, a member of the World Bank Group, is the largest multilateral source of equity and loan financing for private sector projects in developing countries.
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