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$6bn Georgian fund buys hydro plant

Having debuted at no.40 in the PEI 300, GCF has made its first investment in an infrastructure asset in its home country.

The $6 billion Georgian Co-Investment Fund (GCF) – a private equity fund focused on investment opportunities in Georgia – has acquired 100 percent of the Mktvari hydro power plant in a $98 million deal.

The asset, which is located in the Akhaltsikhe region on the River Mtkvari, has been acquired from local developer JSC Caucasus Energy and Infrastructure.

Initial construction work, costing approximately $22 million, has already been completed. Further work on the plant – including construction of a power house and reservoir, tunneling works, enlarging of intake dimensions and the raising of the surge top elevation – is expected to finish by the end of 2017. The plant will have a total installed capacity of 53.3 megawatts.

“In addition to the benefits brought to the nation’s energy infrastructure, the Mktvari project will also create over 100 new jobs and comply with international environmental and engineering standards, which is in line with our stated commitment to establish top quality enterprises in Georgia,” said GCF chief executive officer George Bachiashvili in a statement.

GCF was launched in September 2013 to invest in opportunities in Georgia on behalf of limited partners including sovereign wealth funds, global corporations and private family offices from countries including the United Arab Emirates, Azerbaijan, Turkey and Kazakhstan.

It is aiming to invest around half of its capital in energy – other sectors include hospitality/real estate, agriculture/logistics and manufacturing – and is targeting an internal rate of return (IRR) on investments of at least 17 percent.

With its $6 billion of backing, GCF debuted in this year’s PEI 300 – our ranking of the globe’s largest private equity managers by size – at number 40. This positioned it eight places below Russia’s Russian Direct Investment Fund, which is at number 32.