Wednesday, November 9, 2011

Georgia. Novotel Hotel Tbilisi

The EBRD is considering a senior loan to 64 Chavchavadze LLC (the “Borrower”) to finance the development, construction and operation of a 4-star hotel in the capital Tbilisi, It would be run under the Novotel brand by the hotel operator Accor (the “Project”).

The Project site is located on Chavchavadze Avenue, close to the city centre and major corporate demand generators, and would feature 160 rooms, 1800 square metres of retail space and approximately 70 underground parking units.

Transition Impact

The Project is expected to increase competition in the mid-range hotel sector, which is currently small and fragmented. There are only two international branded hotels in operation in Tbilisi and very few in the pipeline. Non-branded mid-market hotels are classified according to the local rating system and the vast majority do not meet international standards. The Project would bring improved standards of accommodation and services in the mid-range segment, at affordable rates, and would suit both leisure and business travellers. The Project could also facilitate the transfer of technical and managerial skills more widely in the sector.

The Client

64 Chavchavadze LLC is a limited liability company incorporated in Georgia, whose ultimate beneficiaries are Mr. Lasha Papashvili and Mr. Sulkhan Papashvili.

Mr. Lasha Papashvili will co-Sponsor the Project jointly with the Georgian Real Estate Holding, a holding company set up in Georgia.

EBRD Finance

US$ 18 million, including US$ 15 million committed tranche and US$ 3 million uncommitted tranche.

Project Cost

US$ 30 million.

Environmental Impact

The Project was categorised “B” by the European Bank for Reconstruction and Development (EBRD), which requires an environmental and social analysis in accordance with the 2008 Environmental and Social Policy and Performance Requirements (PR’s)

The Project has some environmental and social impacts which can be readily addressed through mitigation measures and an action plan.

The Bank’s environmental and social due diligence is currently being carried out. An initial review of the completed EBRD Environmental and Social Due Diligence Questionnaire for Property Projects showed that the Project has been developed in accordance with relevant legal requirements including those of city planning. Further analysis and clarification regarding land acquisition, water and waste management, occupational health and safety, fire and public safety, construction material safety and other related issues will be followed. Energy efficiency opportunities will be also explored. Based on the further analysis, an Environmental and Social Action Plan (ESAP) will be developed and agreed by the client as part of the legal agreement with EBRD. The client will be required to ensure that the Project complies with PR’s and submit an annual environmental and social report to the Bank.

Technical Cooperation

The Project qualifies as a Built Environment Project with substantial sustainable energy investments, and has benefited from a Technical & Energy Performance Assessment under the Framework for Enhancing Sustainable Energy and Transition Impact in the Built Environment funded by the Japan-SEI TC Fund, provided by the Government of Japan. A consultant engaged by Energy Efficiency and Climate Change Team has assessed the performance of the Project, assisted in identification of the overall Sustainable Energy Investment and proposed further energy saving opportunities suitable for the development. In addition the consultant provided a detailed cost-benefit analysis of the proposed sustainable energy investments and evaluated their impact on the overall energy performance of the building.

Company Contact

Marilena Vuiu
Principal Banker, EBRD, Property and Tourism
Tel: +44 (0) 207 338 6213

Business opportunities

For business opportunities or procurement, contact the client company.

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Text of the PIP

Project Complaint Mechanism (PCM)

The EBRD has established the Project Complaint Mechanism (PCM) to provide an opportunity for an independent review of complaints from one or more individuals or from organisations concerning projects financed by the Bank which are alleged to have caused, or likely to cause, harm. The Rules of Procedure governing the PCM can be found at, the Russian version can be accessed at
Any complaint under the PCM must be filed no later than 12 months after the last distribution of EBRD funds. You may contact the PCM officer (at or the relevant EBRD Resident Office for assistance if you are uncertain as to the period within which a complaint must be filed.

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