ProjectOverview - Esteri

ProjectOverviewJune2019

GEORGIA - HIGH LEVEL DESCRIPTION

2 | PROJECT PRESENTATION

6th

Ease of DoingBusiness

(by World Bank)

16th

Freest Economy

(By the Heritage Foundation)

EXTREMELY BUSINESS ORIENTED GOVERNMENT:

8th

Tax Burden Level

(By the World EconomicForum)

Population (2018) 3.73 million

GDP (2018) US$ 16.2 billion

GDP/Capita (PPP) (2017) c.US $ 9,745

Real GDP Growth (2017) + 4.8%

Real GDP Growth (2018*) + 4.7%

Export (2018*) US$ 3.35 billion (+22.6%)

Import (2018*) US$ 9.12 billion (+14.9%)

FDI (2017) US$ 1.86 billion (+16.2%)

Unemployment % (2018) 12.7%

Inflation % (2018) 2.6%

Sovereign Moody’s rating(March. 2018) Ba2 (Stable)

GEORGIA - CROSSROAD OF EUROPE AND ASIA

● Strategically located on a crossroad ofEurope and Asia

● Non-resources based efficiency driven freemarket economy

● Free trade access to markets with over 2.3billion population

● The only country in the region that hassigned free trade agreements with both the EU and China (incl. HK)

● The EU Associated Country, ongoing approximation of business environmentand quality standards to theEU

● Floating exchange rate / no currencyconversion regulations

● No restrictions on the import or export ofcapital

FTA DCFTA FTA FTA FTA GSPChina

Hong KongEU28 CIS EFTA Turkey The USA

CanadaJapan


CURRENT BLACK SEA PORT DEPTHS

Vessels up to 10,000TEUVessels up to 1,500 TEU

Downtimein 201827%

GEORGIA CURRENTLY CANNOT ACCEPT VESSELS OF MORE THAN 1,500 TEU CAPACITY

GEORGIA CAN NOT ACCEPT 75% OF VESSELS OPERATING IN THE BLACK SEA


HIGH COSTS AND INEFFICIENCY OF GEORGIANPORTS

Poti endured considerable downtime primarily due to wind and ineffective layout of the breakwaters open to main wave direction.

● 3-day average waiting time.● Up to 7-day waiting time during bad weather conditions.● Inefficient/old container handling equipment● Absence of container yard

Consistent downtimes and inability to receive largeships significantly affects Terminal Handling Cost.

THC COMPARISONDOWNTIME DAYS


GEORGIAN PORTS CAPACITY AND EXISTING MARKET GROWTH TREND

PORT CONTAINER TRAFFIC TEU

Oil Crisis, Currency Devaluation by 42%

World Crisis, War with Russia

33.5% CAGR

19.7% CAGR

Actual Q1 2019 container growth+33%

531,436


GEORGIA – SHORTCUT TO CENTRAL ASIA MARKETS

Primary MarketSouth Caucasus: Georgia, Armenia and Azerbaijan Landlocked

17m populationUS$ 62 bln. Total GDP+4% average GDP growth outlook

Secondary MarketCountries of Central Asia and North-West of Iran Landlocked

146m populationUS$ 655 bln. Total GDP+5% average GDP growth outlook


CORRIDOR ONGOING AND COMPLETEDDEVELOPMENTS

Aktau port:$210 mln

Kuryk port:$235 mln

Kazakh transport system: $26 bln

Georgia rail & road: $5.5 bln

Alyat port:$530 mln Turkmenbashi

port: $1.5 bln

Khorgos dry port: $250 mln

Azerbaijan rail:$1.2 bln

Anaklia port:$600 mln



ANAKLIA PORT PROJECT - KEY HIGHLIGHTS

PROJECT SUMMARY

• Public-private partnership with the Government of Georgia(“GoG”)

• Build Operate Transfer (“BOT”) with 52-year concession• Up to 9 development phases• Design Port depth of 16m CD

• Able to accommodate vessels up to 10,000 TEU• GoG to receive 2% of port revenues after 20 years• Opening in 2021• Up to 600,000 TEU initial capacity + 1.5 million tons of dry bulk• Phase 1 development cost c. $ 600m - 65% debt / 35% equity• Signed mandate letters for debt financing of up to US$ 400

million with ADB, AIIB, EBRD and OPIC

• GoG direct investment into equity: $ 100m subordinated debt• Government additional investments in addition to project costs:

• Hinterland road and rail connections ~ $ 120m,• Purchase and transfer of port land ~ $ 30m,

“Strategic Project of the Year”- 2016 Global Infrastructure Leadership Forum in Washington,DC

“Best Investment Project of the Year”- 2016 Dubai Annual Investment Meeting

“Outstanding Conceptual Design”- BUILD (UK construction industry architectural journal)

“Belt & Road Initiative Project of the year”- Asiamoney (Euromoney Institutional InvestorPLC)

* SEZ is developed as a separate project with separate shareholdingstructure

ANAKLIA DEEP-SEA PORT


Bulk quay – 225 m

Service Pier

Two Container Berths 625m

Intermodal YardRail length- 825m

Block Trains- 82TEUs

23ha Container Yard12 eRTGs

SSA MARINE – PORT OPERATOR

Puerto Rico 2016

Panama

2Costa Rica 1995

000

Colombia 2009

Chile2000

Canada 2005

U.S. 1949

Mexico 1995

South Africa 1993

Vietnam 2006

New Zealand 1993

SSA Marine profile:

One of the Worlds Leading port operators;

Founded in 1949 (68+ years of experience);

Operates 250 strategic locations around the five continents;

More than 30 Joint Ventures with Shipping lines, Local Partners

and Marine terminals around theworld;

Traffic served (2017):

• 27.8 million TEU per annum; and

• 112.7 million tons of non-containerized cargo

Number of employees: 17,000;

Annual revenue of more than $ 1.6 billion

Colón, Panama

San Antonio & San Vicente, Chile.

Saigon, Vietnam.


DREDGING WORKS COMPLETED – COMPACTION ONGOING

● Total cost $ 28.5 million, performed by Van Oord

● Up to 5,000,000 cubic meters of material dredged from sea bed and placed on construction site

● Works started mid-September 2018

● Dredging completed in early November

● Compaction process ongoing untilend of May 2019


DREDGING PROCESSVISUALS


PROCUREMENT – EQUIPMENT / EPC

Tender for port equipment announced in November 2018

● Tender value up to US$ 100 million

● Participants: ZPMC, Konecranes, Kalmar Netherlands,

Hyundai, Liebherr, PACECO USA, Mitsubishi

● Bids received from four companies

●Hyundai selected for STS cranes, ZPMC for eRTG Tender

for the selection of EPC contractor ongoing since

September 2018

● Tender value: several hundred million USD

● Participants: internationally acclaimed construction

companies from France and Turkey


• First Special Economic Zone in Georgia

• Special economic and legal status defined by the Constitution of Georgia

• Attached and fully integrated with the Anaklia Deep Sea Port• Up to 1,000 ha development area

• Mixed use development SEZ with logistics, industrial, financial and service clusters

• Access to multimodal transport infrastructure: the most advance port, direct links to the national road and railway networks. International airport in less than 90km distance

• The most competitive location to become the logistics, industrial and business hub for the region

• Long-terms development to emerge as new urban center on a Black Sea coast

ANAKLIA CITY/SPECIAL ECONOMICZONE

PROJECT SUMMARY

PHASE 1 DEVELOPMENT

• To be commencement simultaneously with Anaklia Deep Sea port

• 110 hectares dedicated to the logistics and industrial parks ( 55ha for Phase1a by 2024)•Modern logistics park to capitalize on the access to multimodal transportation: port, road and railway

• Light industrial park for the export oriented industries

ANAKLIA SEZ

Grant Acquired from the Japanese Government

• Engineering, infrastructure alignment etc.• Operations and management• Investment Promotion (ASEAN region)

Strategic Cooperation with the ADB – vital node of CAREC project

for the region.


IDENTIFIED OPPORTUNITIES – SECTORS/PRODUCTGROUPS

• Port supplementary services• Storage/Warehousing• Re-export/transit• Distribution/Value added services• Industrial park induced logistics

Logistics/Distributionsector

• Confectionary/Cocoa products• Packaged food/Snacks/Savories• Preparations of fruits &

vegetables• Sweetened beverages

Construction MaterialsFood & Beverages

• Ceramics products• Sandwich panels• Insulation materials• Roofing/Flooring materials• Frames, windows, doors and alike

Cosmetics & Beauty

• Personal hygiene products• Dental products, shaving and alike• Essential oils, odoriferous substances

and mixtures• Make-up and beauty preparations

• Tier 2 and 3 products• Parts and accessories for vehicle bodies• Brakes, gear boxes and parts• Suspension systems and parts• Interior components, accessories and

wiring

Automotive Components

• Soap products• Surface active agents and washing

preparations• Lubricants and waxes• Polish products

PharmaceuticalsCleaning Products

• Unmeasured and packaged medicaments

• Pharmaceutical preparations• Herbal, greens, berries preparations• Wadding, gauze, bandages and the

like

Household Appliances/Elect.

• Dishwashing, refrigerators and freezers• Air-conditioning and heating• Small electromechanical appliances• TV/radio apparatus (components/assembly)• Spare parts for electronics



THANK YOU FOR YOURATTENTION!

www.anakliadevelopment.com

ProjectOverview - Esteri

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