Kakheti
As part of the Produce in Georgia programme, 12 projects have received support to develop the hotel industry in Kakheti
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VerdictFactCheck concludes that the Prime Minister’s statement is TRUE.

 

Resume: The Produce in Georgia programme has been carried out since 1 June 2014. In 2016, the programme was expanded to include the development of the hotel industry. This gives each entrepreneur the opportunity to develop the hotel business, create new jobs and attract more vacationers.

As a part of this component, a total of 13 projects in the Kakheti region have secured funding. The total sum of the investments is GEL 47.2 million and the number of employed is more than 450.

 

Analysis

Prime Minister Giorgi Kvirikashvili spoke about the work accomplished in the Kakheti region over the past years at a conference of the Georgian Dream’s Telavi branch and stated: “The Produce in Georgia programme has a component for co-funding hotel development. In this field, 12 projects have its support with the total amount of investments constituting GEL 43 million.”

The Produce in Georgia programme has been carried out in Georgia since 1 June 2014 (see FactCheck’s article 1; article 2). It is run by the Ministry of Economy and Sustainable Development and the Ministry of Environment Protection and Agriculture and includes support to develop the following directions:

  • Production
  • Production/processing of agricultural products
  • Hotel industry
  • Film industry

The Produce in Georgia programme consists of three components

  • Financial support
  • Infrastructural support
  • Consultancy service

The financial support component refers to the co-funding of loans (10% for the first two years). If the business is in the industry sphere, the borrower will have to pay 5%-7% annually whilst 10% is covered by the state. If the business is in agriculture, the borrower pays 5%-6% and the state pays 10%.

The infrastructural support component means the affordability of real estate. The state will give state property to an interested party for the symbolic price of GEL 1.

The hotel industry development field was added to the Produce in Georgia programme in 2016. It enables each entrepreneur to develop the hotel business, create new jobs and attract more vacationers.

The aforementioned field makes funding and consulting for entrepreneurs interested in having a hotel business in the regions more affordable. Of note is that the programme is also introducing branding using the experience of successful international brands with co-funding from a franchising contract.

In accordance with the data of April 2018, 44 entrepreneurs have used this support in the hotel industry development field with the total amount of investments equalling GEL 128.7 million. Based on the programme’s calculations, the aforementioned 44 hotels should create additional 1,300 rooms and the same number of new jobs.

In regard to the Kakheti region, 13 projects have been carried out to support the region’s hotel industry. The total amount of investment equals GEL 47.2 million and more than 450 people received employments as part of the programme.

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