Fifteen new companies have been established in Georgia in cooperation with Dutch investments in the first half of the current year. The number of enterprises now totals 239. Construction of the Georgia Technology Park commenced last week. After completion of the Technology Park project, Dutch BitFury’s total investments will near USD 100 million. FDI from the Netherlands to Georgia reached USD 330 million in 2014. The Dutch Ambassador to Georgia considers the fact to be an indication that these investors are of the opinion that Georgia is a safe place to invest.
“There are no Georgia-specific risks for foreign investors. Investors always judge carefully the risks before putting their money somewhere. The fact that there was a flow of over USD 330 million from my country last year should be seen as an indication that these investors are apparently of the opinion that Georgia is a safe place to invest. I have no reason to think that at present investors from my country would have a different attitude,” Hans Horbach, Ambassador of the Kingdom of the Netherlands to Georgia and Armenia, told The FINANCIAL.
“In general terms, it is of course of great importance for foreign investors to operate in a politically and economically stable environment that provides confidence for the future,” said Horbach. “That was and still is, in my view, the case,” he added.
With USD 22 million in the first quarter of 2015, the Netherlands are the top fourth investor country in Georgia. According to data of the Georgian National Statistics Office, there were fifteen companies established in Georgia in cooperation with Dutch investments during the first half of the current year. The figure is equal to the number of enterprises founded in the same period of the prior year.
An attractive investment climate and ease of conducting business, as well as low energy costs and competitive labour market, have played a big part in the decision-making of Dutch BitFury Group to start business in Georgia. Georgian Technology Park and BFDC became registered in Georgia in May of the current year.
“Georgia’s business climate proved to be quite attractive for foreign investors. Its efficient regulatory system, simplified tax regulations and no corruption, along with low energy costs and competitive labour market, make Georgia a very suitable place to invest in,” said Eprem Urumashvili, BitFury Group representative in Georgia.
BFDC is a subsidiary of Dutch BitFury. BitFury Group itself is the leading Bitcoin Blockchain infrastructure provider and transaction processing company, founded in 2011 with management offices in San Francisco, Washington D.C. and Amsterdam. The company acquired a privatized 185,000 sq. m land plot located in the Gldani District of Tbilisi from the Georgian National Agency of State Property to develop the Georgian Technology Park project.
BitFury will be the first tenant in the Technology Park, where it will build a mega data centre with up to 100 MW energy capacity to process transactions using its latest generation 28 nm and upcoming 16 nm ASIC chips. Construction of the data centre was launched last week.
The new project will take full advantage of the proprietary immersion cooling technology enabled by Allied Control which BitFury acquired earlier this year. The company has developed its third generation immersion cooling system to create energy-saving data centre cooling systems for high performance computing applications.
“The main idea is the development of a special technology zone which will attract international technology players to Georgia,” said Urumashvili.
Construction of Georgia Technology Park commenced last week. After completion of the Technology Park project, BitFury’s total investments will near USD 100 million.
“We are very enthusiastic about the project as we believe that the development of Technology Park will play a crucial role in attracting international high tech companies to Georgia. Bitcoin Blockchain industry is itself compared to the internet in its early stages of development. It holds great promise and it is very exciting to be a part of it,” Urumashvili said.
Dutch Bob Meijer together with Georgian businessman Mamuka Khazaradze is the shareholder of ART Radio, registered in Tbilisi on April 2015. The radio resumed broadcasting a month ago.
“At this point we are only providing music. The radio holds a news license however. Accordingly, we will soon launch various talk-shows about social and political issues. We will also cover the news regarding our city life; events and developments that are happening in our city. There will be different types of programmes: business, healthcare and other issues. We will also offer programmes from the ARTAREA line. Educational programmes will be offered in line with it. Representatives of art will be broadcasted during night-time programmes. The music we will air will be tasteful, of diversified genres,” said Irakli Shatberashvili, Director at ART Radio.
In Shatberashvili’s words, there is already an established tradition of people listening to the radio in Georgia, especially when driving. He is therefore optimistic about gaining an audience. “In line with current technological development we plan to develop an online radio,” he added.
Rina Georgia is another company founded by Dutch investments in Georgia. It was registered in June 2015. It is a contractor company of BP Georgia. Rina delivers services of classification, certification, testing and inspection (TIC Services) to guarantee excellence to organizations. “We will deliver our service to BP for their construction and development of the South Caucasus Pipeline. We will start our work from September of the current year, after the contract will be signed with BP Georgia,” said Giorgi Otaridze, Partner at UBC Legal Services.
The list of companies founded in Georgia with Dutch investments include: GEO Alloys; Holland Hook Hostel in Batumi; Caucasus Shipping Agency in Poti; Café Newsroom; Luise Mulder Design Construction; TAM Management; Georgian for veterans; and Booking.com Georgia.
Ambassador Horbach found it absolutely impossible to predict the volume of Dutch FDI in the remaining half of the year. “There could be more FDI later on in the year but there could also be less. Annual investment figures always fluctuate. Therefore we should be extremely careful in order not to draw premature conclusions. A single big investment can cause a distorted impression of presumed variations between compared annual figures. For example, if a big investment is made on the 31st of December or the 1st of January - that can considerably affect the annual figures,” Horbach told The FINANCIAL.