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Press Release

Monday, April 27, 2009

U.S. Small Business Uses OPIC Loan to Build Affordable Apartments in Georgia

WASHINGTON, D.C. – A U.S. small business will use a loan from the Overseas Private Investment Corporation (OPIC) to construct low- and middle-income apartments in the Georgian capital of Tbilisi through an innovative partnership between a leading Georgian bank and real estate developer. On an affordable basis, the project will address a severe housing demand in the city: according to estimates, Tbilisi has the lowest total residential stock per capita and the highest average residents per household of any capital in Eastern Europe.

OPIC is providing a $6.3 million direct loan for the construction of the Kavtaradze Street housing project in downtown Tbilisi, a 300-unit complex comprising homes ranging from studios to four room apartments; a commercial area on the ground and first floors, and 150 underground parking spaces as well as on-street parking for commercial clients. The goal of the project is to establish a commercially profitable housing complex that offers smaller-sized, lower-priced apartments for middle-class Georgian families.

The project is a joint venture between Iberia Real Estate, a well-known Georgian real estate developer, and a subsidiary of Bank of Georgia (BOG), the largest financial institution in the country. BOG’s competitive mortgage rates and large distribution network will promote sale of the apartments to middle class families. The U.S. sponsor of the project is Firebird Avrora Advisors LLC, an investment fund manager which manages the Firebird Avrora Fund, Ltd, a part owner of the joint venture.

“Real estate is one of the fastest-developing sectors of the Georgian economy, but presently Tbilisi still faces great demand for housing, especially for low- and middle-income families,” said OPIC Acting President Dr. Lawrence Spinelli. “This project, through an innovative partnership between Georgia’s largest bank and one of its leading real estate developers, directly addresses that demand, and in an affordable way. OPIC is pleased to support a project with such a significant developmental impact.”


OPIC is the U.S. Government’s development finance institution.  It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy.  Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets catalyzing revenues, jobs and growth opportunities both at home and abroad.  OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.

 

Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide. To date, OPIC has supported nearly $200 billion of investment in over 4,000 projects, generated $74 billion in U.S. exports and supported more than 275,000 American jobs.