Main summary

BTU researchers calculate that 51 companies in two sectors account for 76.0% of the combined 2025 income of the 279 state-owned enterprises identified in Georgia’s Ministry of Finance report. Against the backdrop of a new OECD report, this concentration sharpens a question for Georgia: how can public ownership support reliable essential services and private enterprise rather than obscure who is responsible for important economic decisions?

Three key takeaways

• In Georgia’s covered state-enterprise portfolio, electricity, gas and water production and distribution together with transport and communications comprise 51 companies, or 18.3% of the identified total, but generate 76.0% of combined 2025 income, according to BTU calculations from Ministry of Finance tables.
• The OECD report released on 22 October 2026 identifies clear separation of the state’s ownership, policymaking and regulatory roles as important to accountability and competitive neutrality. This provides a governance framework for Georgia, not a measured local outcome.
• BTU’s analytical assessment is that Georgian oversight priorities should reflect enterprises’ economic weight and effects on other sectors: network quality and investment decisions matter to many more businesses and consumers than those directly employed by state enterprises.

Debate about state enterprise often begins with a single company’s profit, loss or major project. A concrete story is easy to see. Yet it can conceal the larger picture. State-owned enterprises are not simply separate legal entities on a government list. Some operate services and infrastructure that other industries use every day. Their management can therefore affect investment planning, service costs and business continuity beyond their own accounts.

Connecting two tables in Georgia’s Ministry of Finance fiscal-risk report makes this structure visible. Electricity, gas and water production and distribution, together with transport and communications, contain 51 enterprises: 18.3% of the 279 companies identified in the report. Their combined 2025 income was approximately GEL 4.007 billion out of GEL 5.275 billion for the covered portfolio. Less than one fifth of the companies thus account for roughly three quarters of its income.

This is not a share of Georgia’s entire economy or of the markets in which these enterprises operate. It describes the distribution of income within a specific state-enterprise portfolio. That boundary also defines its value: oversight allocated equally across companies could miss where the greatest volume of economic activity is concentrated.

What the international development changes

On 22 October, the OECD published Ownership and Governance of State-Owned Enterprises 2026. For Georgia, its value is not that foreign success or failure can be transferred directly. The report treats state-enterprise governance as an important economic-policy question and examines institutional arrangements that make ownership responsibilities clearer.

The institutional comparison shows that this remains an international challenge. Among the 57 jurisdictions covered by the relevant question, 42% reported functional separation of ownership from policymaking and regulation. Multiple responses were allowed because arrangements can vary across sectors and enterprises, so the categories are not mutually exclusive. This describes institutional arrangements; it does not establish that a particular model causes better outcomes.

The state may be a company’s owner, the author of sector policy and the regulator enforcing market rules. These functions have different purposes. The owner is concerned with long-term value and sound operation; the policymaker pursues public objectives; the regulator protects users and the integrity of rules. When the basis for decisions is unclear, it becomes harder to establish who requested an action, what it cost and who is accountable for its outcome.

This is more than an issue for a company charter. Private investors need to understand the conditions for market entry, network access and contractual obligations. State ownership alone neither proves preferential treatment nor guarantees better service. The decisive questions concern how decisions are made and whether their rationale can be examined.

The OECD comparison is consequently a framework for assessing reform, not a promise of results. Importing a governance rule would not automatically reduce a Georgian tariff or budget expense. Its international relevance is that Georgian businesses and investors operate in an environment where transparent public ownership and predictable competitive conditions form part of the investment climate. Local governance cannot be treated as an isolated administrative matter.

Where the Georgian portfolio is concentrated

The following comparison combines company counts with 2025 income reported by the Ministry of Finance. Income is converted from thousands to millions of Georgian lari; percentage shares and the combined row are BTU calculations.

Source: Ministry of Finance of Georgia, Fiscal Risk Analysis, September 2026, pp. 5–7. Counts describe the portfolio identified when the report was prepared; income refers to 2025. Shares and the combined row are calculated by BTU.

The two sectors share a defining characteristic: their services often enable other economic activity. Electricity and water support routine business operations, while transport moves goods and people. Consequently, disruption or poorly planned investment may have effects beyond an enterprise’s balance sheet. This is the economic transmission channel, not an estimate of damage measured by this report.

High income does not automatically mean high profit. Income supports service delivery, employees, maintenance and other costs; capital investment and debt financing require separate examination. The 76.0% share cannot identify which company has a problem or quantify possible savings. It answers an earlier but necessary question: where is the portfolio’s economic activity concentrated, and where is deeper scrutiny especially valuable?

The Ministry states that its fiscal-risk document covers 90% of state enterprises by turnover, including all central-government enterprises. This is broad coverage, but turnover coverage and a complete legal-entity census are different concepts. Subsidiaries are also identified separately and are not mechanically added to the 279-company denominator.

Why private businesses and consumers should care

State-enterprise governance reaches private businesses through two channels. One is service provision: whether conditions are predictable, planned works occur on time and information about future capacity is available. The other is an economic relationship with the state company, through procurement, contracts or competition in activities where private suppliers also operate. Different rules may govern these relationships, but both depend on clear responsibility.

When evaluating investment, the relevant question is not simply whether financing is available. It is also what demand a project serves, how service capacity changes and what future obligations remain. An assessment focused solely on current-year profit might postpone necessary renewal. Conversely, a general claim of strategic importance could replace a rigorous examination of costs. Good governance requires a reasoned choice between these extremes.

Consumers have more immediate concerns: service availability, quality and price. Taxpayers also need to understand how public resources are used. These interests need not coincide in the short term. A low current price may require another source of investment funding, while high profit does not by itself establish excellent service. Accountability should therefore connect financial performance with service outcomes rather than allow either to substitute for the other.

Drawing on the analytical treatment of BTU’s corporate-governance research materials, the basic problem can be expressed simply: authority and accountability should follow the same decision. Private companies already face the challenge of aligning owners and managers. Public enterprises add policy objectives to that relationship. The answer is not necessarily greater intervention in every operational choice. It is a clearer mandate, room for professional judgment and a credible way to assess results.

A stronger owner does not mean unlimited intervention

Georgia is already working on these questions. According to the Ministry’s report, since June 2022 it has financially overseen seven major state enterprises; since June 2023, a dual-ownership model has been piloted in three companies. These are specific institutional steps, not proof that governance issues across the entire portfolio have been resolved.

Reading the new international report alongside the Georgian concentration calculation suggests that reform should not be judged only by the number of documents adopted or companies placed under oversight. More informative questions are whether the objective of a major decision is clear, financial information is consistent, and responsibility can be identified when results depart from plans. A small enterprise may need relatively simple reporting, while a company with extensive network effects requires deeper attention.

Prioritisation does not mean neglecting smaller firms. A municipal enterprise with modest income may be indispensable to a particular community. Income share is therefore a starting indicator, not a complete scorecard. It must be considered alongside service essentiality, available alternatives and possible public obligations. The calculation supports the allocation of attention; it does not produce an automatic ranking.

The principal opportunity is greater predictability. Private businesses should understand what to expect from networks and public-sector counterparties; consumers should understand how service outcomes are judged; the state should understand the responsibilities created by its choices. The main risk is that public ownership remains an all-purpose explanation, allowing success, expense and disruption alike to be justified through broad objectives without a specific account of decisions.

Ultimately, the OECD report sharpens a question rather than supplies Georgia with a ready-made answer. When roughly three quarters of covered portfolio income is concentrated in fewer than one fifth of its companies, the quality of state ownership is no longer a narrow sector issue. It concerns the foundations on which other economic activity depends—and how clearly society can understand the price of maintaining those foundations.

Questions and answers

Does 76.0% mean the state controls three quarters of the markets in these sectors? No. It is the two sectors’ share of the covered state-enterprise portfolio’s 2025 income. Private-company income is not included in that denominator.

Does the calculation demonstrate inefficiency? It establishes the concentration of economic activity. Assessing efficiency requires appropriate comparisons of service volume, quality, costs and assets.

Why not focus exclusively on higher profits? Financial sustainability matters, but so do service quality, network renewal and clearly specified public objectives. One indicator should not conceal the others.

What does BTU add? An explicit calculation linking two official tables and a systemic interpretation of what that concentration means for oversight priorities. The article does not forecast cost reductions or budget savings.