Dearest Gentle Reader,

We have spent considerable time discussing the “Arabisation” drama, and are quickly establishing that the apartments in Eagle Hills developments are largely empty, largely unaffordable, and largely purchased by those who do not intend to live in them.

This was all well and interesting, until I discovered something else rather peculiar. For today, we follow the money itself — for it too, it seems, has somewhere else to be.

Recall, if you will, the arrangement in Serbia. The Belgrade Waterfront project operates under a 68/32 split between Eagle Hills and the Serbian state. A third of all profits, nominally, belong to the public.

An ad for the Belgrade Waterfront “Bella” complex featured on the website. Special deal for those who purchase unbuilt apartments.

An investigation posted by Radar Serbia decided to examine what this had actually produced. Between 2014 and 2024, the Belgrade Waterfront generated over €830 million in apartment sales.

The Serbian state received €9.9 million.

That is not a third. That is not even close to a third. That is, to be precise, roughly 1.2% — or, if one prefers a more human scale, approximately €1.50 per Serbian citizen.

The explanation, once located, is elegant in its simplicity.

Eagle Hills UAE — the parent company, sitting comfortably in Abu Dhabi — loans money to Eagle Hills Serbia, its local subsidiary, at considerable interest rates. These loans finance construction. The interest accrued is then recorded as a cost — a debt that must be repaid to the parent before any profit can be divided according to the celebrated 68/32 arrangement.

In this way, Eagle Hills does not merely take 68% of the profit.

It takes nearly everything.

The subsidiary pays the parent. The parent and the subsidiary then split what remains. Serbia watches from the 33% that, by the time it arrives, has been reduced to something rather less dignified.

The mechanism is sometimes described as transfer pricing — the practice of setting loan terms between related entities in ways that shift profit across jurisdictions.

What concerns this author, dear reader, is the following: Georgia has been promised ₾2 billion in profits over ten years from its 33% stake. The Georgian agreement remains classified.

Now wait just one more moment.

The investment, we are told, is $6.5 billion. The promised return to Georgia is ₾2 billion over ten years — at today’s exchange rate, approximately $750 million in total. Seventy-five million dollars per year.

On a $6.5 billion project, that is a return on investment of roughly 1.15% annually. It should be stated that this is a

A genuine 33% stake in a $6.5 billion project should, by rather straightforward arithmetic, yield something closer to $2.15 billion — nearly three times what Georgia has been promised, and in lari, roughly ₾5.7 billion rather than ₾2 billion.

→ unaccountedforsubstack@pm.me

Pull one string, dear reader, and another invariably follows.