TAV Georgia is jointly owned by four Turkish companies: Tepe İnşaat Sanayi A.Ş (“Tepe”), Akfen İnşaat Turizm ve Ticaret A.Ş (“Akfen”) and Urban Insaat Sanayi ve Ticaret AS (“Urban”) with 30% each and Sera Yapı Endüstrisi ve Ticaret Ltd. Şti (“Sera”), a private investment company, holding the balance (10%).

Tepe, Akfen and Sera own direct stakes in a number of companies in the airport operation and construction sectors (“TAV Group”). In addition to operating Istanbul, Ankara and Izmir airports (cumulative passenger and aircraft movements of 20,415,286 and 241,129, respectively in 2004), TAV Group companies are also involved in airport construction (EPC contracts of Ankara and Izmir airports and construction projects at Dubai and Cairo airports), duty free and food and beverage operations, the management of the airport hotel in Istanbul, and airport maintenance and ground handling services (60% stake in Havas, the largest ground handling services company in Turkey).

Tepe is the construction company of the Tepe group of companies (“Tepe Group”). In addition to the construction sector, the Tepe Group is active in such areas as the establishment and management of shopping, sports and entertainment centers, defense industry and security systems, and energy production. Akfen is the construction company of the Akfen group of companies (“Akfen Group”). The Akfen Group operates in the fields of construction, tourism, trade, insurance, natural gas distribution, industrial plants, catering services, and airport operation services.

Urban, established in Istanbul in 1995, is a construction company specialized in hospital projects that operates in Turkey, Russia, Kyrgyzstan and Iraq. Cumulative project revenues since the company’s inception have been more than $400 million and projects under construction are in excess of $300 million.

The total project costs are up to $76.5 million. IFC’s proposed investment consists of an A loan of up to $27 million for IFC’s own account. The European Bank for Reconstruction and Development will provide a parallel loan of the same amount along with IFC.

27.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	27.0
Equity

* These investment figures are indicative

TIA is located 20 km from the capital city of Tbilisi and serves as the main gateway to Georgia. In 2005, TIA handled approximately 535,000 passengers of which about 46.5% were foreigners. The airport handled 11,250 aircraft movements in 2005of which about 55% were operated by international airlines with the balance provided by Georgian airlines. Of the 2005 seat capacity, 52% was dedicated to CIS and Eastern Europe and 38% to Western Europe and Turkey. Batumi International Airport serves the city of Batumi located approximately 20 kilometers from the Turkish border in southwestern Georgia. Batumi is a main port on the Black Sea, a transport center for petroleum from Azerbaijan and a popular tourist destination.

The project will have a strong developmental impact on the Georgian economy. TIA is the main international and domestic airport in Georgia and is of significant importance as an integral part of the country’s transport and economic infrastructure. The expansion and modernization of TIA is a high priority for the Government of Georgia to relieve expected capacity constraints and improve operating efficiency and performance standards by implementing international best practices in the airport industry.
TAV Georgia will bring its airport operation and management know-how to Georgia, resulting in upgrading of skills of local workforce (in accordance with the terms of the concession contract, more than 70% of the personnel at TIA shall be Georgian citizens). The project is also likely to have indirect benefits by facilitating the arrival of more travelers to Georgia. Beneficiaries will include Georgia’s hotel and tourism sector.

IFC''s investment in the proposed project would provide long-term financing necessary for a concession-based project at a reasonable cost. Long-term limited recourse financing is generally unavailable in Georgia from either domestic or foreign sources. The Project represents an opportunity to promote infrastructure privatization in Georgia and its successful financing would have a strong demonstration effect on potential investors by demonstrating the feasibility of limited recourse project financing for infrastructure projects in Georgia.

This is a category B project. The review of this investment consisted of appraising technical and environmental information submitted by TAV Georgia and site visits by IFC staff. Environmental, health and safety issues associated with this project include:

- Environmental, health and safety management systems, including environmental assessment,
- construction impacts,
- fuel/ hazardous materials storage and handling, including emergency response,
- air emissions,
- water supply,
- stormwater drainage and effluent discharges,
- solid and liquid waste management,
- aircraft noise,
- employee health and safety, including fire and life safety, and
- airport land acquisition and resettlement.

TAV Georgia has presented plans to address these issues and to demonstrate that the operation of the Tbilisi airport will, upon implementation of the specific measures comprising an associated Environmental Action Plan, comply with applicable Georgian environmental laws and regulations, relevant international norms, and World Bank Group policies and guidelines.
Location of environmental documents In locally affected community
The documents will be available in the following locations in Georgia: TAV Urban Georgia LLC, Tbilisi International Airport, Tbilisi, Georgia.