State owned Georgian Sovereign Wealth Fund to be established

The government of Georgia plans to establish 100% state-owned Sovereign Wealth Fund based on the Partnership Fund, created in 2011 to attract investments from abroad, and focus on co-financing projects in the energy agriculture, real estate, and industrial sectors.

Revenues for the fund will come mainly from dividends from the state-owned rail, oil, electricity and gas businesses and profits of its own investments.

The draft bill on "JSC Georgian sovereign fund was also presented to the parliament for the debates.

According to the draft law, the goal of the fund is supporting and developing the cost-effective investment projects and attracting the investments.

Moreover, the Partnership Fund will be integrated into the Strategic Development Fund and will be a sister enterprise of the Sovereign Fund. The founders and 100% owners of the Strategic Development Fund will be part of the Sovereign Wealth Fund.

According to the government, the acting structure and functions of the Partnership Fund does not comply with the practice and requirements of the similar types of international funds. Also, the shares of the state own companies are not protected from entrepreneurial risks.

The Sovereign Fund will establish the Strategic Actives Company which will own the stocks and shares of state-owned rail, oil, electricity and gas businesses.

The initiative for establishing the Georgian Sovereign Wealth Fund was revealed by the Ex-Prime Minister of Georgia Bidzina Ivanishvili, who repeatedly announced plans for three, new government-run investment funds at the launching presentation of one of the Georgian Co-Investment Fund (GCF), a private equity fund of USD 6 billion to channel capital into needed sectors, in late September this year. Ivanishvili has committed 1 billion USD of his own money to the GCF.