Recently, the Georgian media abounded with alarming reports about a slowdown of foreign direct investments (FDI) in Georgia. Indeed, economic figures seem to support the view that there may be a turn in the FDI activity. The graph shows FDI in the first two quarters of each year from 2005 to 2013.

The purpose of the Financial Soundness Indicators for Investment Climate Assessment is to present a birds eye view of the Georgia’s financial system, its’ standing relative to other countries in the world and the countries in Europe/Central Asia developing cohort. After the first round of successful cooperation between ISET Policy institute and ADB on the previous FSI project, ISET-PI was granted the second contract for conducting a joint study together with GeoStat and NBG.

The purpose of this report is to present the Financial Soundness Indicators (FSI) data in a way that is accessible and easy to interpret by a wide array of stakeholders, and help them analyze the economic implications underlying the FSI concepts.

Khudoni, Georgia’s largest hydropower investment project, is again making the headlines. According to a recent statement by Georgia’s Minister of Energy and Natural Resources Kakha Kaladze, the project will be put on hold at least until March 1, 2014.

The obsession with hydropower may have obscured other green energy options for Georgia. For one thing, investment in hydro is not happening as fast as could have been expected a few years ago.