US embassy cable - 05TBILISI3214

UNCLAS TBILISI 003214 
 
SIPDIS 
 
DEPT PLEASE PASS TO OPIC: KENNETH ANGELL 
 
E.O. 12958: N/A 
TAGS: ECON, SENV, GG, Economy 
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