International finance institution invests in Georgia’s agriculture

An international financial institution is investing two million USD to finance one of Georgia’s largest dairy farms Kvarlis Baga in Georgia.

International Finance Corporation (IFC), a member of the World Bank Group, backed Kvarlis Baga’s effort to significantly expand fresh milk production.

The owner of Kvarlis Baga Lasha Papashvili believed the investment would help the business purchase additional facilities, allowing them to triple their fresh milk production and "making Kvarlis Baga the number one Georgian producer of fresh milk”.

"Last year we started a very risky business but the project will hopefully serve as a role model for other agricultural projects in the country. We started with 120 lactating dairy cows and the farm’s capacity is three tonnes of milk daily,” Papashvili said at today’s signing ceremony of a new loan agreement.

"This IFC’s financial long term, seven year loan will allow us to purchase an additional 120 cows and build housing facilities for cattle. The daily milk production will increase 10 tonnes per day,” he said.

IFC’s Director for Europe and Central Asia Tomasz Telma believed the project would also spur agribusiness development, which was crucial for Georgia’s economic growth, employment generation and poverty reduction.

"Georgia is a small market in terms of agribusiness. This investment is expected to increase high-quality fresh milk production in Georgia at a cost competitive with international suppliers. The increased production will allow Georgia’s dairy sector to reduce reliance on imported whole milk powder and, eventually, become self-sufficient,” Telma said.

Telma believed that while agribusiness provided employment for more than half of Georgia’s workforce, increasing the productivity of this sector was "still a challenge,”

"This investment will enable a quality fresh milk producer to scale up production and help meet rapidly growing demand in the Georgian market,” he added.

IFC currently had only three clients in Georgia’s agricultural industry but Telma believed this number would soon increase.

"IFC is eager to identify with entrepreneurs like Mr. Papashvili who are willing to spend time to prepare proper projects which will significantly increase the productivity and quality of Georgian agriculture products,” he said.

Georgian dairy farm Kvarlis Baga has been operational since October 2013 and was equipped with high-standard facilities and management systems, ensuring the production of fresh milk was always high.

Telma highlighted a number of other projects were being prepared for future investments in Georgia’s agribusiness.

Georgia became a member of IFC in 1995. Since then, IFC has invested $810 million USD in 60 projects across various sectors and supported regional projects developed in the country. In the past fiscal year IFC invested $400 million USD in the agriculture sector in Europe and Central Asia.