February 12, 2016 / 9:22 AM / 2 years ago

Georgia may issue Eurobonds in 2016 - prime minister

Georgian Foreign Minister Georgy Kvirikashvili delivers a speech during a meeting with members of parliamentary groups and committees in Kutaisi, Georgia, December 28, 2015. REUTERS/Pool

TBILISI (Reuters) - Georgia may issue Eurobonds in 2016 and is eyeing additional financial resources from international institutions to cope with an economic slowdown triggered by problems in neighbouring countries, the prime minister has said.

Georgy Kvirikashvili said his government would conduct a series of roadshows in the United States and elsewhere to attract foreign investment to an economy hit by financial problems in neighbouring countries.

“There will be a number of roadshows this year, including the roadshow in the United States that we are planning for the second quarter of this year and also in regional countries,” Kvirikashvili told Reuters in an interview late on Thursday.

“I can’t predict whether we will need to issue Eurobonds, but if speeding up infrastructure projects requires attracting additional investments, including via Eurobonds, of course, we will do that, maybe later this year.”

Georgia issued $500 million worth of 10-year Eurobonds in 2011 and at the same time bought back $417 million of its five-year $500 million Eurobonds, which it issued in 2008.

He said tax reforms were planned that would include abolishing corporate profit tax, a simplification of tax administration and further liberalisation of the economy.

“This year we project 3 percent growth and I think it is achievable,” Kvirikashvili said. Last year Georgia’s economy grew 2.8 percent.

INFRASTRUCTURE INVESTMENTS

He said the government planned to ask international institutions for additional financing for infrastructure projects.

Georgia signed an agreement with the European Investment Bank (EIB) on a 150 million euro facility on Thursday for infrastructure upgrades, including reconstruction of an east-west highway and post-flood reconstruction in the capital Tbilisi.

“We also discussed the potential for additional resources,” said Kvirikashvili, who has a Master’s degree in finance from the University of Illinois in the United States.

Georgia has pushed for political and economic integration with the European Union and is seeking NATO membership. It signed a free trade accord with the EU in June 2014 and expects visa liberalisation with Europe later this year.

Kvirikashvili said Georgia could benefit from the free trade agreement by attracting investment from countries that do not have such an accord, and urged the EU not to delay the decision on visa-free travel.

“I believe that within one decade it will be possible to see Georgia’s economy, revenue and per capita GDP as comparable to eastern European standards,” Kvirikashvili said.

Kvirikashvili, who became prime minister in December, has said Georgia will continue its push for membership of NATO, which has played down any prospect of rapid accession, and its pragmatic policy towards Russia, with which it fought a brief war in August 2008.

“Our NATO and EU plans should not be deemed by Russia as a sign of confrontation,” he said.

Kvirikashvili said that, after the lifting of international sanctions, Iran could bring a new dynamism to the region, and that Georgia’s location at a crossroads between Europe and Asia put it in a position to boost cooperation between Iran and Europe.

“Iran is ready to discuss cooperation in different fields, including in the energy sector, which can be very interesting for Europe to diversify its energy supplies,” he said.

Editing by Christian Lowe; Editing by Kevin Liffey

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