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