CDB provides $20 million loan to Georgia's JSC Partnership Fund

On March 20, 2019, China Development Bank signed an agreement to provide a $20 million loan to the state-owned investment fund, JSC Partnership in Georgia. The Framework Agreement on Cooperation envisions an increase in the loan to 50 million by 2020. The first round of talks between the fund and the bank has been completed. The China Development Bank will issue the loan without a state guarantee, which is the first precedent for state-owned companies in Georgia. The funds will go to the investment portfolio of the Partnership Fund, which will then be allocated to various projects. Historically, the JSC Partnership Fund has promoted investment in Georgia by providing co-financing (e.g., equity, mezzanine) in projects at their initial stage of development via special purpose vehicles. The main areas of investment for the fund are power generation, agriculture, real estate, and manufacturing (Source: p. 113 in "PUBLIC–PRIVATE PARTNERSHIP MONITOR SECOND EDITION"). Prior to the loan agreement, on the 21st and 22nd of December 2015, a Georgian delegation led by David Saganelidze, head of the state-owned shareholding company the Partnership Fund, met officials from Chinese financial institutions to discuss the prospects for future cooperation. The general director of the China Development Bank also promised to financially support Chinese companies that invested in Georgia’s infrastructural or energy projects. On January 25, 2017, Saganelidze noted at his meeting with businessmen at the Employers Association that the Partnership Fund of Georgia planned to sign an agreement with China Development Bank to authorize the latter to enter all projects of the Partnership Fund. Despite the agreement envisioning an increase in the loan to 50 million by 2020, there is no proof of this development.

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