Introduction

The Georgian Economy Minister, Levan Davitashvili, on Tuesday, January 28, 2025, highlighted the significance of a newly signed $6 billion investment agreement between Georgia and a real estate group from the United Arab Emirates (UAE). The deal, finalized during a visit by Georgian Prime Minister Irakli Kobakhidze to Abu Dhabi on Monday, underscores Georgia’s growing status as an “attractive” destination for foreign investment. Davitashvili emphasized that the agreement, aimed at financing a “multifunctional development project” in key cities such as Tbilisi, Batumi, and Gonio, will not only stimulate the Georgian economy but also raise the country’s profile on the global investment map.

The agreement signals a substantial shift in the region’s economic dynamics, as it comes at a time when Georgia is making concerted efforts to strengthen its economic infrastructure, diversify its foreign investments, and cement its position as a competitive player in the Caucasus and beyond.

Details of the Investment

The $6 billion agreement revolves around a multifunctional development project across three major locations in Georgia. The primary locations include:

1. Tbilisi – The Georgian capital, a cultural and political hub, and one of the fastest-growing cities in the region.
2. Batumi – The Black Sea port city, which has gained prominence for its tourism potential and economic activity.
3. Gonio – A coastal town near Batumi that holds strategic importance for both tourism and trade.

The investment is spearheaded by the UAE-based Emaar Group, one of the largest real estate developers in the Middle East, with notable projects such as the Burj Khalifa in Dubai and several large-scale developments across the Gulf region. The agreement, being one of the largest foreign direct investments (FDI) in Georgia’s history, represents a new era of economic cooperation between the two countries.

Georgian PM’s Remarks on Investment

In a statement made during the signing of the agreement, Prime Minister Irakli Kobakhidze hailed the deal as an unprecedented foreign direct investment for Georgia. Kobakhidze noted that this substantial investment would bring not only a financial influx to the country but also have a multiplying effect by attracting further foreign investments into the region. He expressed confidence that the project would result in significant economic growth, infrastructure development, and job creation.

The Prime Minister also noted that the investment decision was being made by the Emaar Group, a company whose investment strategy is often followed by successful international firms. This, he believes, reflects the growing confidence that global investors are placing in Georgia’s economic prospects.

Minister Davitashvili’s Comments on the Investment

Minister Levan Davitashvili further emphasized the importance of this deal, noting that it is a testament to Georgia’s favourable and stable economic environment. He highlighted the country’s growing reputation as a prime investment destination that offers a conducive business climate, regulatory stability, and competitive advantages such as low taxes and proximity to regional markets.

Davitashvili pointed to Georgia’s strategic location at the crossroads of Europe and Asia as one of the driving factors behind the increasing interest from international investors. As a gateway between the two continents, Georgia offers unique access to regional markets, and its continued economic liberalization makes it an attractive choice for companies looking to expand into the Caucasus, Eastern Europe, and Central Asia.

Strengthening Bilateral Ties Between UAE and Georgia

A particularly noteworthy aspect of the agreement is the direct involvement of the UAE Federal Government, including the President of the UAE, in the deal. Davitashvili stated that this involvement elevated the agreement beyond a simple private sector transaction to one of strategic importance for both nations. The investment is seen as part of a broader effort to strengthen the bilateral relationship between Georgia and the UAE, which has grown rapidly over the past few years, particularly in the areas of politics, economics, and tourism.

Georgia has become one of the first countries to establish a comprehensive economic cooperation agreement with the UAE, which came into force in 2024. This agreement has helped to formalize the growing collaboration between the two countries, setting the stage for more joint ventures and increased foreign direct investments.

Economic and Strategic Significance of the Investment

The $6 billion UAE investment is significant for a variety of reasons, both from an economic and strategic standpoint:

Boosting Economic Growth

The multifunctional development project will involve the construction of residential, commercial, and mixed-use facilities in some of Georgia’s most prominent cities. This will significantly boost the real estate sector in Georgia, providing both short-term economic benefits (through construction activity) and long-term growth (through the development of sustainable urban centers).

Moreover, the project is expected to drive considerable improvements in infrastructure, including transport networks, tourism facilities, and energy systems. This will contribute to enhancing the overall living standards and attracting more investors to Georgia’s burgeoning tourism, technology, and finance sectors.

Job Creation and Technology Transfer

An important component of the investment is the job creation potential associated with such a large-scale development. Thousands of construction workers, architects, and engineers will be needed to realize the ambitious project, providing a significant boost to the local labor market.

In addition, the UAE’s Emaar Group is expected to bring with it best-in-class expertise in urban development, smart city technologies, and sustainable building practices. This transfer of knowledge will help elevate the standards of Georgian construction and urban planning, ultimately positioning Georgia as a more competitive player in the global market for real estate development.

Enhancing Georgia’s Global Competitiveness

This landmark investment will likely serve as a catalyst for future foreign direct investments in Georgia. By demonstrating the country’s economic stability and investment-friendly environment, this deal could attract more multinational corporations looking to set up operations in the region. Georgia’s relatively low corporate tax rates, simplified business registration processes, and access to the Eurasian Economic Union (EAEU) market make it an attractive location for foreign companies to establish a base of operations.

Tourism and Cultural Implications

The investment is also set to have a positive impact on Georgia’s tourism industry, especially in cities like Batumi, which is already a popular tourist destination for visitors from the Black Sea and the Middle East. Batumi has been increasingly recognized as a cosmopolitan hub with a vibrant tourism sector, and the new development projects will only enhance its appeal as a destination for both leisure and business travelers.

Additionally, cultural exchanges between the UAE and Georgia are expected to grow, with tourism initiatives potentially offering both countries opportunities to showcase their heritage to a wider international audience. Enhanced air connectivity, luxury accommodations, and tourism-friendly infrastructure will attract travelers from the UAE and beyond, contributing to increased tourism revenues for Georgia.

The Future of Georgia’s Economic Landscape

The $6 billion investment represents a significant milestone in Georgia’s journey towards becoming a more prominent player on the global economic stage. The agreement reflects a positive trajectory for the country’s economic future, as Georgia continues to diversify its investment base and strengthen bilateral relationships with strategic partners like the UAE.

The ongoing modernization of Georgia’s economic institutions, its commitment to regulatory reforms, and the expansion of its global trade partnerships will continue to pave the way for more international investments. As the country consolidates its position as a key regional hub for business, tourism, and trade, the Georgian government is expected to focus on maintaining the favorable conditions that have made it an increasingly attractive investment destination.

Conclusion

The $6 billion investment deal between the UAE and Georgia represents more than just a financial transaction—it symbolizes a new chapter in the economic cooperation between the two nations. The project promises to boost Georgia’s economic growth, create jobs, enhance its infrastructure, and increase its global competitiveness. Moreover, it underscores the country’s growing attractiveness as a destination for foreign investment and the increasing interest from international investors in Georgia’s evolving economic landscape.

As Georgia continues to make strides in fostering a favorable investment climate, it is poised to reap the benefits of its strategic location, business-friendly policies, and strong relationships with key global players like the UAE. This investment marks a significant step forward, setting the stage for further economic growth and the potential for more large-scale projects in the future.

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photo source: Google

By: Montel Kamau

Serrari Financial Analyst

29^th January, 2025