Page 65 - GEORptOct21

Natural gas price hike in Tbilisi fuels Georgia’s problematic inflation
Georgia’s electricity consumption down 5.5% in 2020
The natural gas price charged by Tbilisi Energy, the utility that delivers gas to Georgia’s capital city and surroundings, will increase by 17% to Georgian lari (GEL) 539 ($163) per thousand cubic metres with effect from June 1, as per a May 27 decision introduced by the Georgian National Energy Regulatory Commission (GNERC).
The move will further push up headline inflation, which in April stood at 7.2%, unchanged from March. Rising inflation has already forced the monetary authority to increase its key interest rate to 9.5%. The National Bank of Georgia (NBG), citing a rather bleak inflationary outlook generated by overlapping domestic and external factors, hiked the key rate, namely the refinancing rate, on April 28 by 1pp, following the 0.5pp it added in March. The resultant and rather hawkish 9.5% rate is the highest seen in Georgia for several years.
The current gas tariff entered into force on January 1, 2020, and was meant to apply until the end of 2022.
GNERC said that the hike was necessary to ensure a “safe and reliable” gas supply to the capital.
Tbilisi Energy requested the rate increase, citing a GEL25mn ($7.6mn) loss incurred over the past year and a half due to currency depreciation. The company said it has also asked to calculate the gas price in the national currency in the months ahead to “protect the population” against price increases in relation to exchange rate fluctuations.
Earlier, on January 3, the company's gas price was increased by 31% to GEL1,100 ($333) per thousand metres for commercial users.
Tbilisi Energy supplies gas to around 1.5mn people and 18,000 commercial users.
Electricity generation and consumption in Georgia dropped by 5.8% and 5.5%, respectively, in 2020, in line with lower economic activity. According to the Georgian electricity market operator "Esco", total generation last year amounted to 11.16 TWh, equivalent to 5.8% less than in 2019, when total output was 11.86 TWh.
Production decreased particularly at the county's hydropower plants, which account for the largest part of total generation.
The amount of electricity generated by Georgia's thermal power plants edged down by less than 1% to 2.82TWh. In the case of the hydropower plants, the reduction was measured at nearly 7.7% for a total of 8.25 TWh, accounting for nearly 70% of the electricity generation.
The electricity generated by the Kartli wind farm increased from 84.7mn kWh to 90.8mn kWh year on year, amounting to 0.8% of total generation. Electricity consumption decreased by 5.5% to 12.41 TWh, down from 13.15 TWh in 2019.
9.1.13 Defence sector news
Georgia outlines defence procurement priorities for next decade
The Georgian government has revealed its defence procurement priorities up to 2030. They include the acquisition of unmanned aerial vehicles (UAVs) and new artillery systems, and a revitalisation of the country's defence housing infrastructure.
At a ceremony for the release of the Action Plan of the Georgian Defence Forces 2020–30 on July 22, Minister of Defense Juansher Burchuladze revealed that the country would be acquiring additional Javelin anti-tank missiles in 2021 from the US. Negotiations are also under way with Polish and South African companies to establish joint ventures (JVs) in the country with
65 GEORGIA Country Report October 2021 www.intellinews.com