Page 47 - GEORptAug19

Opponents say the project threatens the environment and livelihood of local villagers, and claim it will considerable economic risks for the country.
Tbilisi Green Alternative, part of the Bankwatch association, claimed last month that Georgia’s government has committed to buy electricity generated by the Nenskra hydropower plant during its first 36 years of operation at a price that is on average double the current tariff for domestic electricity, and three times the price of electricity that Georgia exports. If this is borne out, it would generate losses of approximately $60mn per year for the state budget. Green Alternative said it based its calculations on a leaked document.
Its assessment contradicts claims of the government and the project’s private developer JSC Nenskra. They have long maintained that the 280 MW hydropower plant is essential to Georgia’s energy security, arguing it would provide the country with considerably cheaper electricity.
Georgia is to initiate the privatisation of the 20MW Gori wind farm in four to six weeks, Economy Minister Natia Turnava said on June 19 in comments on the country’s privatisation plans.
The plant was commissioned in the autumn of 2016. It has an installed capacity of 20.7MWh and has involved investments worth $34mn. Its annual capacity is 84.1GWh.
Turnava said that certain assets belonging to the state are difficult to sell since special advance preparations are required. The wind farm located in Shida Kartli (Qartli) region, is among such assets, she added.
The wind farm’s financial liabilities towards the European Bank for Reconstruction and Development (EBRD) make the privatisation procedures relatively complex, the minister added.
The EBRD arranged a $22mn syndicated loan to Qartli Windfarm LLC (the operator of Gori wind farm) for the development, construction and operation of the wind farm, providing a $10mn tranche itself. The remainder of the investment capital, besides the $22mn, was provided by the Georgian Energy Development Fund (GEDF).
The government of Georgia on June 17 was set to endorse a decision to grant a six-month extension to the deadline for raising financing for the Anaklia Development Consortium’s (ADC) project to build a deep-water port on the Black Sea coast.
The investment is to be rolled out under a public private partnership and would involve $600mn of financing for its first stage, with the eventual total cost estimated at $2.5bn.
ADC asked the government for an extension during a meeting on May 21. “We have accepted the date the consortium suggested,” Georgian Infrastructure Minister Maya Tskitishvili said, as quoted by Agenda.ge . T his was the sixth time the deadline would be extended, she added.
The six-month period should be used to address eight requirements outlined by international financial institutions (IFIs). Of those, seven have been agreed in principle. One issue, relating to the government providing some guarantees as regards the turnover of the port, under an agreement similar to the contracts for difference in the energy industry, remains in limbo. The issue became more urgent for investors with reports that the government was seemingly encouraging the development of another deep-water port in Poti, south of Anaklia, although current plans see it as being much smaller than what ADC has in mind.
ADC has already issued an official statement welcoming the decision to prolong the term for raising financing by another six months. It said that the consortium has already mobilised needed capital for the project; however the
47 GEORGIA Country Report August 2019 www.intellinews.com