Georgia’s energy sector maintained a strong position in foreign direct investment (FDI) during the first half of 2025, even as overall FDI declined compared to the previous year. According to preliminary data published by the National Statistics Office of Georgia (Geostat) and reported by multiple Georgian business media outlets, energy stood out as one of the leading sectors in the first quarter.
FDI Overview: First Half of 2025
In the first quarter of 2025, total FDI in Georgia amounted to USD 179.4 million, representing a 7.7% decline compared to Q1 2024.
In Q2 2025, FDI rose to USD 580.1 million, but this figure was still 12% lower year-on-year, reflecting broader economic pressures and investor caution.
Despite the overall downturn, the energy sector demonstrated resilience, attracting substantial investment in Q1.
- Q1 2025: The energy sector received USD 70.2 million, making up 39.1% of total FDI—the largest share among all sectors in that quarter.
- Q2 2025: The sector attracted USD 54.4 million, a decline in relative share to 9.4% of total FDI, placing it behind financial and insurance activities and real estate.
These figures indicate that while energy’s prominence declined in Q2, it remained a significant FDI destination in the broader six-month period.
Key Source Countries
FDI in 2025 came from a diverse set of countries, though the leading investors varied between quarters:
- Q1 2025:
- Czech Republic: USD 43.0 million (~23.9%)
- United States: USD 39.6 million (~22.1%)
- Türkiye: USD 28.1 million (~15.7%)
- Q2 2025:
- United Kingdom: USD 242.7 million (~41.8%)
- Türkiye: USD 54.0 million (~9.3%)
- Czech Republic: USD 38.3 million (~6.6%)
While detailed energy-sector-specific breakdowns by country are not published, the Czech Republic’s continued investment aligns with its active role in Georgia’s energy infrastructure in recent years.
Comparison to 2024
In the full year 2024, Georgia attracted approximately USD 1.333 billion in FDI, marking a 29.9% decrease compared to 2023.
The first half of 2025 appears to follow that trend, with both Q1 and Q2 recording year-on-year declines in total FDI. However, the energy sector’s sustained inflows in Q1 signal continuing foreign confidence in Georgia’s long-term role as a regional energy transit and generation hub.
Sectoral Trends and Implications
The significant share of energy FDI in Q1 reflects Georgia’s strategic value in regional energy markets, including electricity transmission, hydropower development, and renewable energy expansion. However, the drop in energy FDI share in Q2—amid a surge in financial sector investment—may indicate shifting investor priorities or project timelines.
Analysts suggest that the sector’s performance is likely tied to ongoing infrastructure projects and reinvestments by existing energy operators.
Looking Ahead
While comprehensive H1 2025 figures by individual company are not yet publicly available, the early-year performance of the energy sector underscores its importance within Georgia’s broader investment landscape.
As Georgia advances its energy sector reforms and renewable energy targets under the EU association framework and Green Agenda, energy is expected to remain a vital channel for foreign capital, despite fluctuations in quarterly data.
By Team GT
