COMMENTS ON BANK OF GEORGIA'S APPLICATION FOR OPIC

UNCLAS TBILISI 003214 SIPDIS DEPT PLEASE PASS TO OPIC: KENNETH ANGELL E.O. 12958: N/A TAGS: ECON SENV GG SUBJECT: COMMENTS ON BANK OF GEORGIA'S APPLICATION FOR OPIC FINANCE REF: SECSTATE 209017 ¶1. In response to reftel, post knows of no information about Bank of Georgia's (BOG) shareholders that would cause us not to support the project. Econoff met on December 8 with Lado Gurgenidze, BOG's CEO, to discuss the OPIC loan to expand its residential mortgage loan program. According to Gurgenidze and other sources, the residential mortgage sector is booming, and there is a large demand for mortgage products. BOG seeks to meet this demand. Gurgenidze did mention that OPIC's loan of $10 million will be able to see them through one quarter, after which they would seek additional funding from other sources. The bank currently has insufficient equity to fund ten-year mortgages, Gurgenidze said. ¶2. Regarding the question in reftel about developments in the residential mortgage sector, according to Gurgenidze, BOG is the only bank which publishes its mortgage portfolio information, which is about GEL 36 million with 1200 mortgages. These mortgages are for both home purchases and renovations. Since BOG holds about 40 percent market share in the mortgage sector, he estimates that the total of outstanding mortgages in the sector is approximately GEL 100-120 million. TEFFT