Investor Presentaiton

Key drivers of economic growth Export-led growth with sufficient diversity Agricultural products, ferroalloy, aircraft, rail car, vessels and vehicles, fertilizers, machinery Oil and gas pipelines - Russia-Georgia-Armenia pipeline; Shah-Deniz (BTE) gas pipeline; Iran-Azerbaijan-Georgia (IAG) gas pipeline; Baku-Supsa oil pipeline; Baku-Tbilisi-Ceyhan (BTC) oil pipeline; NABUCCO Project is to finish by 2014 Grow potential revenue, tourism sector - c.US$1.4 bn donor money earmarked for investments in infrastructure Baku-Akhalkalaki-Kars railway line - sanctioned in 2007 building railway to link Asia and Europe; Huge untapped hydro-power resources - only 18% of Georgia's hydro potential is being utilized; current export capacity of c. 150 MW Increasing domestic consumption Consumer spending in 2008 - US$3.8bn estimated average household size of 3.5, far higher than in most CEE/CIS peers less than 18,000 households (out of the estimated total of 1.3 million) have mortgages Consumer debt per capita stood at US$92 as of YE 2009 Debt /GDP under 30%; Retail loans/GDP under 10% Libertarian policies kick-start modernization Tax and Tax rates slashed: Only six taxes, down from 21 Flat personal income tax of 20% (15% by 2013) Corporate income tax 15% By 2012 no taxes on dividends, interest income or worldwide income "Liberty Act" Referendum is required for an increase in tax rates Budget expenditure capped at 30% of GDP (effective FY2012) Budget deficit capped at 3%, effective FY2012 Public debt capped at 60% of GDP, effective FY2012 Red tape and import duties cut Customs code harmonized with EU; Capital controls abolished since 1990s Corruption significantly reduced Georgia 11th out of 183 in the WB's Ease of Doing Business 98% of Georgians didn't have to pay bribe in past year, according to International Republican Institute Economic growth is supported by Free industrial zones created around Poti (port), Kutaisi (second largest city) etc. (Tax rates in zones largely 0%) Poti Sea Port privatized in December 2008 by Rakeen Group (UAE) to build infrastructure for operating Free Industrial Zone Net transfers from abroad Increasing consumer spending Sustained government spending Source: Ministry of Economic Development, Ministry of Finance, State Statistics Department www.bog.ge/ir Lobko BANK OF GEORGIA September 2010 Page 6

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