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 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