‘6.5 Bln Investment’ By Emirati Company Draws Questions, Controversies
“Today we are laying the foundation for a project which, by its substance and scale, writes a new, historic chapter in the story of our country’s development,” Georgian Dream Prime Minister Irakli Kobakhidze said on October 21 at the sleek opening of the Tbilisi office of Eagle Hills. The office is located in the newly renovated historic building of the former Rustaveli Cinema, directly opposite the parliament and therefore at the heart of ongoing anti-government protests.
Officials say that the Eagle Hills, Abu Dhabi-based real estate company, is ready to invest over USD 6 billion in Georgia, hailing it as “the largest investment in Georgia’s history.” Georgian Dream, which is struggling to ease public concerns over the costs of Georgia’s drift from the West, appears to hold the project particularly dear.
The real estate and development project spans 260 hectares in coastal Gonio, near Batumi, and 590 hectares in Krtsanisi, near Tbilisi. First announced during Kobakhidze’s visit to the UAE in January, the project regained the spotlight in September when Bidzina Ivanishvili, the ruling party’s reclusive billionaire founder, made a rare public appearance to personally host an Emirati delegation led by UAE President Mohamed bin Zayed Al Nahyan.
But despite the government’s efforts to frame the investment as a driver of prosperity, the project has faced multiple lines of criticism. Civil society and progressive groups have increasingly raised concerns about the commercial secrecy of the investor agreement and the potential environmental impact of the mega-project. And in a separate wave of backlash, Georgian Dream, after months of championing anti-immigration rhetoric and policies, is now forced to defend itself against what its right-wing critics claim to be “Arabization.”
‘Green City’ in Krtsanisi, ‘Premium-Class Resort’ in Gonio
The construction of what authorities describe as a “green city” in Krtsanisi and a “premium-class resort” in Gonio is set to begin in the coming months, with the state holding a 33% stake in the project. According to officials, the development will include around 16,000 homes and apartments, hotels with more than 1,400 rooms and apartments, as well as commercial and recreational zones.
They claim the project will generate over 30,000 jobs during and after construction, with the work expected to be carried out by local companies. The government also estimates the project’s direct economic impact of GEL 11 billion (USD 4 billion), plus hundreds of millions in GEL in annual tax revenues, and an average annual profit of GEL 200,000 for the state as a 33% shareholder.
According to Mohamed Alabbar, Eagle Hills founder, 60 percent of real estate in the project is intended for international buyers, including investors from the UAE and Georgians living abroad. “People from the UAE will want to purchase property here. Georgians who live abroad, many other nationalities who like and love this country, for them this will be a second home or a place to rest, some may even want to move here permanently,” Alabbar told Imedi TV on October 22.
Eagle Hills and past controversies
Alabbar, a prominent Emirati investor, founded Eagle Hills in 2014. The businessman is better known as the co-founder and chairman of Emaar Properties, the giant developer behind the Burj Khalifa, partly owned by the Investment Corporation of Dubai (ICD), the Emirate’s state investment fund. Eagle Hills is a separate private company that is operating in 20 countries, including European and Arab countries, with a portfolio of over 90 hotels and resorts and 17 shopping malls.
The company, however, has faced controversies in some of these countries. Earlier this year, Hungarian authorities ultimately backed away from the Eagle Hills’ 12 billion-worth “Grand Budapest“ mega-project, dubbed “Mini-Dubai”, after public outcry fueled by questions about transparency and fears of corruption.
In Serbia, the Belgrade Waterfront project, a similarly ambitious housing and shopping project carried out by Eagle Hills, has faced protests, including over the shady demolition of properties within the project site in 2016. The project continued to draw scrutiny in the years since, including over concerns related to labor conditions.
Earlier this year in Montenegro, the company’s Velika Plaža beach project, which aims to develop a 12-kilometre stretch of Adriatic coastline, also triggered protests over similar concerns about potential corruption and a lack of transparency.
Worries About Commercial Secrecy
Questions over the project intensified after Irakli Kobakhidze classified the investment agreement as a “commercial secret.”
“They fight against us in the name of ‘transparency’, but themselves conclude a USD 6 billion secret deal on our land without informing us,” a Movement for Social Democracy, a progressive force that emerged during ongoing Georgian protests, said on November 9. The movement members have repeatedly expressed worries about the project’s social and economic impact. The project “serves to ensure that only the wealthiest people close to Georgian Dream have access to air, forests, rivers, shade, and that every public good that exists in this country becomes part of private property,” Tatia Dvali, a member of the movement, said during a November 10 rally.
Others have questioned the numbers behind the investment.
Nikoloz Shurghaia, a financier, described the USD 6.6 billion claim – roughly half of Georgia’s national budget – as unrealistic. “The scarce information available about the project demonstrates significant economic inconsistencies,” he wrote in a petition addressed to Georgian Orthodox Church hierarchs. “The project is either designed to be unprofitable, or its true purpose differs from what has been presented,” Shurghaia added, noting that no details have been provided regarding potential risks or possible harm to the public and the environment.
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Nikoloz Alavidze, who served as Deputy Economy Minister in 2019, also questioned the Georgian Dream’s math. Relying on figures provided by the authorities, which forecast a total of GEL 2 billion in profits over ten years from the state’s 33% stake, he calculated that the project’s total ten-year profit at full ownership would amount to about USD 2.2 billion. This, Alavidze said, translates into a Return on Investment (ROI) of just 3.4%, drawing on a financial ratio measuring profit relative to the overall cost.
“For such a high-risk project, a 3.4% annual return is very low by international and every other standard,” Alavidze said. “This means that the state has assumed full financial risk in exchange for an insignificant [profit] or even a loss.”
Environmental Concerns
Questions about the project’s environmental impact have sparked additional concern.
Critics are particularly worried about the fate of Krtsanisi Park, situated between Tbilisi and the industrial city of Rustavi, where part of the investment is planned. According to the information published by the National Wildlife Agency of the Ministry of Environment, the “200-hectare recreational area represents the natural floodplain ecosystem of the Mtkvari River and boasts a great diversity of flora and fauna” and “is one of the best destinations for birdwatching enthusiasts.”
“This place will be chopped down. This place will be brutally chopped down,” said Sopia Shvelidze, an activist with the Save Krtsanisi Park initiative, in comments to On.ge, voicing concerns about the park’s diverse and unique ecosystem.
Environmental expert Nino Chkhobadze told Mtis Ambebi that Krtsanisi Park functions as a fresh-air “oasis” for the two cities. “We won’t be able to breathe in the city,” she warned, referring to the potential consequences of building a settlement in the area.
‘Arabization’ Discourse
The Emirati project triggered a wave of nativist reaction, including claims that the development would result in “Arab towns” or even Georgia’s “Arabization.” While the predictable reaction came from traditional ultra-conservative, anti-immigration groups such as Alt-Info/Conservative Movement or Alliance of Patriots, the sentiments have been echoed within more mainstream opposition circles as well.
“Our government has made it very clear that it envisions only one future for Georgians: being service personnel for foreigners in a country that will be Georgia in name only,” said Zurab Makharadze, leader of the far-right Alt-Info/Conservative Movement, as he announced a December rally in a video address recorded in Krtsanisi Park. His party colleague Giorgi Kardava, who was recently elected to the Tbilisi City Council, further claimed the project will bring “compact settlement of foreigners” with whom Georgia shares “no religious, cultural, or ideological affinity.”
Lelo for Georgia, a larger, pro-Western opposition force, also described the plans as an “ambiguous project of Arabization” while voicing broader concerns that the development would be “commercially unprofitable for the Georgian side.” The party argued in its November 18 statement that the investment raises “serious questions and risks regarding national interests, including in terms of economy, demography, and security.”
In contrast, the Federalist party leader Giga Bokeria warned that “Arabization” rhetoric created “an unhealthy approach.” Bokeria noted that the primary source of the large-scale migration affecting Georgia today is Russia, rather than Arab countries. He also noted that the large-scale investment project was driven less by economic interests and more by Georgian Dream’s political survival concerns amid growing international isolation.
Georgian Dream Defends Investment
Georgian Dream officials, including GD Prime Minister Kobakhidze and Economy Minister Mariam Kvrivishvili, as well as their media allies, have repeatedly and often aggressively defended the project. On November 23, in a conspiracy-filled report attacking online media outlets, the pro-government Imedi TV channel singled out the media organizations that have critically covered the project, accusing them of working as a “network” to ruin the country’s economy.
Earlier, on November 16, Kobakhidze recorded what looked like a nine-minute promotional video of the project, accusing “ill-wishers” of waging what he called “an anti-state campaign built on lies.”
In the video, Kobakhidze addressed the anti-immigration sentiments, clarifying that it’s “not two Arab towns that will be built in Georgia, but two very beautiful, Georgian, European-style spaces will be created near Tbilisi and Batumi.” Kobakhidze further argued that if, as Alabbar projected, 60% of the project’s units were actually to be sold to foreigners, this would amount to 9,600 apartments, noting that “over the past four years foreigners have purchased more than 60,000 apartments in Georgia, which has not created any demographic problem for the country.”
The Georgian Dream Prime Minister also sought to allay fears over the transfer of land to the investor, emphasizing that the project permits the land to be used “solely for development purposes.” He added that the state “remains a co-owner of this land; therefore, no Georgian land will be transferred to anyone.”
As for the concerns of commercial secrecy, Kobakhidze defended the decision, saying the classification aligns with “Georgian legislation and international practice.” He noted that “the state has nothing to hide from its own citizens and is ready to answer all questions related to the agreement,” arguing that “it is in the interest of any commercial company to keep the details of a contract confidential, so that it has greater flexibility in future negotiations with other potential partners.”
Author: Luka Gventsadze
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