U.S. Small Business Uses OPIC Loan to Build Affordable Apartments in Georgia
April 27, 2009
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.”