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Development Finance Corporation to be Established instead of Development Bank

The Development Finance Corporation will be established instead of the Development Bank, whichwill be  based on the concept of reform of the Partnership Fund.

Minister of Economy, Vice  Prime Minister George Kvirikashvil said  after the today’s Cabinet meetingthat  the draft law had been submitted to Parliament and would   undergo significant changes. The idea of creating the Development Bank belongs to Bidzina  ​​Ivanishvili.

In his opinion, the Development Bank will accelerate the country’s economic development. “We set up a socially oriented Agriculture Fund,  as well as the Co-Investment Fund  focused on business. Now  the Development Bank will be established which will not be social, but intermediate between social and pure business-focused. The bank would help in the development of certain sectors, “- said Ivanishvili  in March of  this year when he had already moved  to the non-government sector.

The “Partnership Fund”  was established  3 years ago,over  the past year the government decided to reorganize it three  times and submitted to Parliament the packages of bill in a  form of legislative initiative.

According to the first variant, the “Partnership Fund”  had to be transformed into “Sovereign Fund”, but the government withdrew its legislative initiative back so that Parliament did not have time to start a discussion.

In August Kvirikashvili said that the State Development Bank would be established on the basis of a state-owned Partnership Fund set up by the previous authorities in 2011 and will be named  the State Financial Corporation instead of the Development Bank. Then he exclusively told “Commersant” that the Development Bank likely would be led by  Irakjli Kovzanadze.

“The Partnership Fund has already a Director. As the Partnership Fund was restructured into the Sovereign Fund, it can be named Sovereign Development Fund or Development Finance Institution,” -stated Kvirikashvili.

Previously, David Saganelidze  was named  a presumptive candidate for  the post of Director  of thedevelopment bank.

The Partnership Fund (which is fully government owned) has stakes in the key  public companies such as “Georgian Railway ” LLC,  “Georgian Oil and Gas Corporation”, “Georgian State Electric System”, “The Electricity System Commercial Operator” and Tbilisi electricity distribution company “Telasi”.