AGP Executive Report

Duchenne Medicines Breakthrough: Parent Kakha Tsikarishvili says Georgia’s decision to fund treatment likely reflected public support, Patriarchate involvement, and a letter to Bidzina Ivanishvili, while also hinting at possible personal intervention. City Economy Snapshot: Georgia’s statistics show Tbilisi dominated enterprise activity in Q1, with 80.8% of turnover and 65.7% of output concentrated in the capital. Local Governance: Tbilisi Mayor Kakha Kaladze stressed that sustainable development is about citizens’ well-being, not just economic indicators. Banking & Payments Exchange: An Armenian Central Bank delegation met the National Bank of Georgia to compare experience from NBG’s RTGS and ACH upgrade project. Regional Outlook: The EBRD’s regional prospects report flags uneven growth across the Caucasus, with Armenia and Georgia still growing but inflation pressures returning. Crypto Policy Push: Georgia’s government backs a plan to introduce a GEL₮ stablecoin, drawing scrutiny over transparency and state-linked involvement. Trade & Energy Links: Coverage also points to Georgia’s role in regional connectivity, including upgrades tied to the Baku–Tbilisi–Kars corridor.

Middle Corridor Boost: Georgia completed upgrades on the BTK railway’s 180km Georgian section, lifting freight capacity from 1m to 5m tonnes a year and marking full-scale operation with ministers from Azerbaijan, Georgia and Türkiye. Energy Security Plan: Georgia is exploring a green hydrogen pipeline alongside a planned Black Sea electricity cable to strengthen the Black Sea green energy corridor and export clean gas plus power. Trade & Payments: Armenia’s central bank delegation visited Georgia’s National Bank to discuss modernization of real-time settlement and clearing systems, including plans for instant payments and ISO 20022. Business Performance: Geostat reports business-sector turnover rose 11% in 1Q26 to 62bn GEL, with higher production value and employment. Health & Pharma Access: After months of protests, the government agreed with parents of children with Duchenne muscular dystrophy on specific medicines; a working group with the Health Ministry will start procurement steps. Local Investment: TBC-backed M25 premium office/coworking complex opened in Tbilisi with EUR 8.5m investment. Diplomacy Watch: Georgia said it will not join the upcoming “3+3” meeting in Saint Petersburg, reiterating it has never participated in that format. Regional Context: EU announced €50m immediate support for Armenia after Russia imposed new export restrictions, calling it economic coercion.

EBRD Outlook: The EBRD lifted Georgia’s 2026 GDP growth forecast to 6% (from 5.5%), citing services, tourism and private consumption, while warning Middle East conflict could hit tourism and raise energy import costs. New EBRD Leadership: Tomas Kairys was appointed head of the EBRD’s Caucasus office, effective Sept 1, 2026, overseeing EBRD operations across the region. Transport & Trade Finance: The World Bank approved $372m for the Trans-Caspian Transport Corridor “TC-GATE” to upgrade rail and roads, cut logistics bottlenecks and support reforms—aimed at strengthening Georgia’s Middle Corridor role. Macroeconomy: Georgia’s annual inflation eased to 5.7% in May, down from 5.9% in April, with the National Bank linking the earlier spike to global energy and fuel price moves. Local Housing: Tbilisi says 450 homeless families have received housing with use rights, after up to 1,150 families were granted homeless status. City Infrastructure: Tbilisi City Hall started rehabilitation at Sioni Cathedral, with works expected to finish by end-October. Real Estate Deal: eVoost AI signed an exclusive international commercialization agreement with Mardi Holding for Batumi projects Mardi Hills and Mardi Aquapark, targeting global sales and lead generation. Agri-Food Cooperation: Georgia’s agriculture deputy minister met Türkiye counterparts to discuss irrigation, water management and expanding Georgian agri-food exports to the Turkish market. Energy Tech: bp deployed multilateral well technology in Azerbaijan’s ACG field to boost recovery and extend production life.

World Bank Funding: The World Bank approved $372m for Georgia’s Trans-Caspian Transport Corridor (TC-GATE), aiming to modernize rail and key road segments, cut logistics bottlenecks, and support institutional reforms—expected to directly benefit 900,000 people and strengthen Georgia’s role as a Middle Corridor transit hub. Regional Transport: Georgia’s upgraded Baku–Tbilisi–Kars (BTK) railway officially entered full operation after modernization of the Georgian section, boosting annual freight capacity from 1m to 5m tonnes and reinforcing the Europe-Asia route. Digital Finance & Crypto: Tether plans to invest in Georgia and launch GEL₮, a lari-pegged stablecoin, in a government-linked setup that watchdogs say raises transparency concerns. Energy & Connectivity: Georgia is also being discussed in the context of broader regional energy corridors, including plans for green hydrogen pipeline options alongside Black Sea infrastructure. Business Expansion: eVoost signed an exclusive international sales and marketing deal with Mardi Holding to commercialize Batumi projects Mardi Hills and Mardi Aquapark worldwide.

BTK Railway Upgrade: Georgia’s upgraded Baku–Tbilisi–Kars line has moved from test mode to full operation, with annual freight capacity rising fivefold from 1m to 5m tonnes—reinforcing the Middle Corridor as a key Eurasian trade route. Crypto Crackdown in Mestia: Georgia plans to install electricity meters across Mestia after officials blamed illegal crypto mining for pushing 2025 consumption to 133m kWh (about 13x typical levels), straining the grid and costing 20–25m lari annually; free power remains capped, while excess use will face tariffs and law enforcement targets large-scale miners. Energy Pipeline Management: BP says it will transfer management of the Baku–Tbilisi–Ceyhan pipeline to SOCAR from July 1, calling it a contractual handover rather than an exit. Regional Connectivity: Georgia’s rail and air links keep expanding, with upgraded BTK operations and new regional passenger services announced, supporting tourism and business travel.

BTK Railway Full Launch: Azerbaijan, Georgia and Türkiye officially commissioned the modernized Baku–Tbilisi–Kars line at Akhalkalaki, with Georgia’s PM saying capacity could reach 5 million tons annually and freight container traffic nearly sixfold in 2025. Oil & Gas Corridor Updates: BP said it is transferring management of the Baku–Tbilisi–Ceyhan pipeline to SOCAR from July 1, while BP also reported first commercial natural gas production at the ACG field. Regional Finance & Investment: Georgia will host the Tbilisi Financial Summit in autumn, aiming to connect central banks, fintech and investors around “regional economic corridors” and AI/open banking. Energy Policy Watch: An IMF paper warns central banks across the Middle East, Central Asia and the Caucasus to protect independence from political pressure as energy and food shocks return. Georgia Business Signals: EBRD appointed Tomas Kairys as Director and Head of Caucasus from Sept 1, based in Tbilisi. Trade & Markets: Galt&Taggart reported Batumi primary-market apartment prices rising in Q1 while rents fell, pointing to oversupply pressure. Aviation & Tourism Links: Shirak Avia launched weekly Yerevan–Tashkent–Yerevan flights, restoring direct connectivity after decades. Tax Relief Deadline: Georgia’s gas tax suspension ends at midnight June 2, with drivers expecting a price jump.

Energy Diplomacy: SOCAR says Azerbaijan will keep expanding natural gas output and diversify export routes, citing growing demand from Europe, Georgia and Türkiye and noting Syria has now joined the list. Regional Power Trade: Turkey’s energy minister says a new electricity corridor linking Azerbaijan, Georgia, Türkiye and Bulgaria could eventually extend toward Central Asia, with plans framed as an “electricity version of TANAP.” Georgia Enforcement: The government says it is stepping up action against illegal crypto mining in Mestia, including mass electricity meter installation, after officials warned the scheme overloads power lines and drains the energy system. Transport & Infrastructure: A ceremony will mark the commissioning of the modernized Baku–Tbilisi–Kars railway line on June 2, a key freight route for the Middle Corridor. Capital Markets: Georgia’s Finance Ministry issued GEL 400m in treasury securities via syndication; TBC Capital says 65% of buyers were foreign investors, signaling growing interest in Georgian market products. Real Estate: Galt&Taggart reports high demand in Batumi’s real estate market in Q1, with sales rising in both primary and secondary segments. Household Costs: Georgia’s gas tax suspension ends Tuesday night; drivers will see the return of the 33-cent-per-gallon gasoline tax and 37.3-cent diesel tax. Business Performance: Freedom Holding Corp. reported fiscal 2026 net income more than doubling to $153.3m and record revenue of $2.19bn.

Agriculture Reform: Georgia’s Minister Davit Songulashvili says the country can’t win on mass production due to limited land, but can compete by scaling high-quality products for export, backed by a new Agricultural Co-Financing push. He highlights Enhanced Monitoring & Extension Services: stronger monitoring to catch problems early, plus better access to knowledge, modern tech and mechanization for farmers. Transport & Trade: Georgia will officially launch the modernized Baku–Tbilisi–Kars railway on June 2, with the Marabda–Kartsakhi section at 180 km and capacity expected to reach 5 million tons/year. Energy Corridors: Georgia is exploring a green hydrogen pipeline alongside electricity links as part of regional energy connectivity. Electricity Security: electricity meters are being installed across Svaneti to curb illegal crypto mining in Mestia, with electricity still free up to a limit. US–Georgia Talks: the US Embassy says a State Department delegation met Georgian leaders to discuss a “constructive, forward-looking” partnership, including a fair business environment and energy cooperation. Corporate/Markets: Reuters reports SOCAR has completed its acquisition of Italy’s Italiana Petroli and named new executives.

Higher Education Reform: Georgia’s Education Minister outlined a new higher-education funding model with two components—basic funding and phased performance-based funding—plus a plan to make education in public universities free from the 2026-2027 academic year. Airport & Payments: Visa opened its first “Business Lounge Powered by Visa” at Kutaisi International Airport, offering free access for eligible Visa Premium cardholders and aiming to upgrade Georgia’s premium travel experience. Public Finance & Markets: The Ministry of Finance issued GEL 400 mln in debut securities via a syndicate, while Bank of Georgia priced USD 300 mln 6.50% notes due 2031. Security & Foreign Influence: Georgia’s State Security Service arrested two citizens on espionage charges in separate cases, alleging information collection and encrypted contacts with foreign intelligence services. EU Politics & Protests: Thousands marched in Tbilisi demanding EU integration and new elections, accusing the government of obstructing accession. Regional Trade & Energy: Gazprom said it will repair 2026–2027 facilities in Georgia’s gas transmission system tied to Russian gas transit to Armenia. Transit Corridor Watch: Reports say China is boosting freight to Europe via the Trans-Caspian route through Kazakhstan, the Caspian, Azerbaijan, Georgia and Turkey, bypassing Russia.

EU Integration Protests: Thousands rallied in Tbilisi demanding closer EU ties and a new parliamentary vote, with opposition leaders accusing the government of blocking accession and calling for the release of people detained after the 2024 protests. Security & Espionage: Georgia’s State Security Service announced the arrest of two people on spying allegations, including journalist Irakli Chikhladze and pro-Russian activist Gulbaat Rtskhiladze, with cases under Article 314 carrying 8–12 years. Transit & Energy: Gazprom says it will repair parts of Georgia’s gas transmission system used for Russian gas to Armenia in 2026–2027, under an agreement with Georgian national companies. Transport Corridor Competition: Ukraine’s foreign intelligence service says China plans to boost freight to Europe via the Trans-Caspian route through Kazakhstan, the Caspian, Azerbaijan, Georgia and Turkey, aiming to reduce reliance on Russia. Tourism & Payments: Visa opened its first business lounge at Kutaisi International Airport, offering free access for Visa Premium cardholders and positioning the move as a boost to Georgia’s premium travel experience.

Airport Business & Tourism: Visa, together with United Airports of Georgia, has opened the first “Business Lounge Powered by Visa” at David the Builder Kutaisi International Airport. The 270 sq m, two-floor lounge includes relaxation, workspace, a children’s play area and dining, with access for Visa Premium cardholders (Platinum, Signature, Infinite) from May 29 under set visit limits. Energy & Transit: Gazprom says it will repair facilities in Georgia’s gas transmission system used for Russian gas transit to Armenia in 2026–2027, after signing an agreement with Georgian national companies. Security & Espionage: Georgia’s State Security Service reported a second spying arrest in one day, naming Irakli Chikhladze, while earlier it detained another NGO head on similar allegations. Georgian Economy & Markets: Tbilisi’s energy market sees a major corporate move: Silk Road Holdings increased its offer to buy out the remaining TELASI shares (after already holding 75.01%). Business Events: Tbilisi Gastro Week 2026 (May 31–June 7) will run with Studio Liberty as strategic partner, featuring international chefs and wine culture programming.

Energy & Trade: Russia’s electricity generation rose 1.8% year-on-year in Q1 2026 to 332.5bn kWh, with exports up 5.8% to 2.12bn kWh, and shipments reported to Kazakhstan and Georgia. Corporate Moves: Silk Road Holdings says it has increased its price offer to buy out the remaining shares of Tbilisi power distributor TELASI. Capital Markets: Georgia’s Finance Ministry sold GEL 400m in debut treasury securities via syndication, with demand at GEL 1.8bn and 65% allocated to non-residents; separately, Bank of Georgia priced $300m 6.50% notes due 2031, with the orderbook over 3x oversubscribed. Business Climate: Geostat reports 7.6% of enterprises introduced new or improved goods in 2025 and 7.9% improved services, while the biggest business-environment concern was rising prices. Policy & Regulation: Georgia signed the Council of Europe audiovisual co-production convention, aiming to help independent TV and streaming producers access European collaboration and funding. Digital Identity & Fraud: A new wave of identity fraud is being driven by synthetic identities and “injection” attacks that are designed to pass verification at scale.

Banking & Markets: Georgia’s Ministry of Finance sold GEL 400 mln debut treasury securities via syndication, with demand hitting GEL 1.8 bln (4.5x), and 65% of the 5.9-year bonds going to non-residents (mostly the UK). Corporate Finance: Bank of Georgia priced USD 300 mln 6.50% notes due 2031, with the deal 3x oversubscribed at peak and expected settlement on June 3. Growth Watch: Geostat says Georgia’s economy grew 6.2% in April y/y; exports rose 21% in Jan–Apr to $2.4 bln, helped by the start of domestic petroleum refining. Innovation & Policy: NBG received regional fintech awards for innovation support; Geostat also reports 7.6% of enterprises introduced new goods and 7.9% new services in 2025, with price increases flagged as a key business challenge. Transport & Trade: Georgia’s auto market faces a structural shift after higher vehicle customs duties and a new excise tax logic from April 2, raising clearance costs for older cars (EVs exempt). Energy/Logistics: Reports say 126 tons of carbamide fertilizer and 67 tons of flour moved from Russia to Armenia by rail via Georgia and Azerbaijan. Diplomacy: A U.S. State Department delegation held meetings in Tbilisi with Georgian Dream, opposition, business, faith leaders and Patriarch Shio III, focusing on improved ties and prosperity. Culture & Tourism: A new Tbilisi enoteca opened at “Wine Factory No. 1,” with up to 20,000 rare bottles aged over 200 years.

Capital Markets: National Bank of Georgia First Vice Governor Ekaterine Mikabadze backed a EUR 11m bond placement by Tegeta Holding, highlighting growing investor appetite and corporate use of the capital market (coupon 6.25%). Banking & Education: NBG and Caucasus International University launched a documentary series on the history of Georgian money, with materials planned for distribution to 50 schools via Bank Cartu and “FinEdu Corner” library spaces. Energy & Infrastructure Security: NATO warned Russia’s hybrid campaign is targeting Europe’s energy grid, with growing concern over sabotage and cyberattacks on pipelines and power links. Oil & Transit Routes: Kazakhstan is assessing the Baku–Supsa pipeline as an export option, while noting reduced exports tied to Tengiz output and transport limits. Utilities: Georgia Power customers may see slightly lower bills after the regulator approved rate changes, using federal nuclear tax credits. Local Governance: Tbilisi Mayor Kakha Kaladze ordered an audit after complaints that Avlabari subway station rehabilitation still leaks during rain. Environment: Georgia’s Ministry of Environment Protection and Agriculture signed grant agreements with the Caucasus Nature Fund for protected landscape administrations’ operating costs. Diplomacy: A US State Department delegation met NBG and the Economy Ministry, with both sides saying they want to reset relations and restore strategic cooperation.

Energy Security Shock: Russia’s Energy Minister Sergei Tsivilev has warned Armenia it may suspend or scrap a 2013 deal that exempts Armenian purchases of Russian gas, oil products and diamonds from export duties, as Yerevan moves toward EU integration—raising fears of higher costs and supply risk. Sanctions & Finance: The UK announced fresh sanctions targeting crypto and illicit finance networks in Kyrgyzstan and Georgia, designating 18 entities and individuals and adding three Georgian firms, while Georgia’s National Bank says sanctioned companies were not under its supervision. Monetary Policy Watch: Georgia’s Parliament adopted the National Bank of Georgia’s 2025 annual report; NBG Governor Natia Turnava said inflation averaged 3.9% in 2025, the policy rate was raised to 8.25% in May 2026, and the lari’s strengthening trend helps curb imported inflation. Regional Trade & Connectivity: New Georgia–Azerbaijan agreements reportedly cover long-term electricity supply and gas deal extensions, plus restored Tbilisi–Baku passenger rail and steps toward Baku–Tbilisi–Kars operations—amid concerns about Georgia’s long-term transit role. Business & Industry: GM PHARMA hosted an Azerbaijani GMP inspection ahead of exports; and Kazakhstan’s EuroChem started operating a large sulfuric acid plant in Zhambyl as Phase II of a $1bn+ investment.

Commercial Real Estate: Colliers’ 2025 overview says Tbilisi’s office market stays on track, with 52 modern business centres (~300,000 sq.m.), Class A/B making up about 70% of supply, and as much as 150,000 sq.m. more under construction—mostly in Saburtalo. Urban Infrastructure & Heritage: The Tbilisi Development Fund will rehabilitate Sioni Cathedral and the historical building on Agmashenebeli Avenue, with a signed contract and works due to finish by end-October. Tourism & Rail Finance: Galt&Taggart estimates Georgia’s March-April tourism losses from the Middle East at about $150m, while a restored Baku–Tbilisi rail channel could add roughly $200m in the second half of the year. Public Safety & Justice: Georgia’s Prosecutor’s Office opened an investigation into alleged police brutality in Gori, charging abuse of official powers with violence. Energy Prices (US data): GasBuddy reports show diesel and premium fuel price points varying across US counties, with Georgia’s statewide diesel averaging $5.08 per gallon (week ending May 16). Trade & Connectivity: A report highlights the Kars–Akhalkalaki railway debate, with Robert Kocharyan questioning the route’s value for Armenia versus a more direct Turkey link. Sanctions & Crypto: The UK imposed new sanctions on Russian crypto evasion networks and also targeted three Georgian companies tied to Russia-focused exchange activity. Regional Security: Russia has ratified a treaty on closer cooperation with South Ossetia, underscoring ongoing geopolitical pressure in the region.