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€120mn loan. Of that, €60mn will go into the energy sector reform and €60mn into the water infrastructure project. It is also providing a grant of up to €2mn to be used for improving the energy efficiency of buildings. French Development Agency (AFD) has extended €60mn for energy sector reform.
As reported by the Ministry of Finance of Georgia, within the framework of the visit of the President of the Federal Republic of Germany Frank Walter Steinmeier, Minister of Finance of Georgia Ivan Machavariani and director of the Europe and Asia Division of KfW, Stefan Opitz, signed loan and grant agreements.
Separately, the Ambassador of France to Georgia Diego Colas and the new regional director of the French Development Agency (AFD) for Eastern Europe, Caucasus and Central Asia Cecil Copier signed a €60mn loan agreement for energy sector reform with Georgia’s finance minister. AFD and KfW are partners in financing energy sector reforms in Georgia.
Georgia is now the world’s third largest Bitcoin miner, behind China and Venezuela. The scale of the mining pursued by the small country’s cryptocurrency farms is such that it is “sucking the power grid dry” as the enterprises account for some 10% of the country’s electricity consumption some estimates contend, according to a BBC Business Daily podcast “A hydro-powered Bitcoin boom in Georgia”.
The problem is reportedly particularly acute in Svaneti region, where consumers are exempt from paying for electricity because of harsh living conditions—the situation fostered the development of grey economy Bitcoin mining businesses “patronised by high-ranking officials” according to locals quoted by Kommersant daily. Frequent power outages are apparently endured by locals.
David Chapashvili from Green Energy, an environmental pressure group, was cited in the podcast as criticising the cryptocurrency mining practice for how much electricity it consumes.
A BitFury-owned Bitcoin mining farm is “guzzling” up 4% of the country’s electricity, or 389.7 million kWh in absolute terms, alone, according to documents presented by the Green Energy representative.
Chapashvili said the country actually has no understanding of the total impact cryptocurrency mining is having on its energy consumption.
“There are lots of micro-miners,” he said. “If you ask a very simple question to the ministry like which sector is consuming [energy] Georgia doesn’t have this kind of analysis.”
“Actually, in reality we don’t know what’s going on or how many consumers are [mining Bitcoin],” Chapashvili added.
The environmental pressure organisation is one of the groups that estimate that Bitcoin mining is using more than 10% of Georgia’s energy supplies. Georgia is a net electricity importer and experiences a deep seasonal power production deficit during the winter when its hydroelectric production capacities cannot cover demand.
9.1.10 Other sector news
Gross revenues generated by Georgia’s gambling industry hit Georgian lari (GEL) 13.8bn (€5bn, and equivalent to one third of the country’s GDP) in 2018, more than double the sum recorded the year before, according to Business Media and BusinessPress. The publications cited data from national statistics office Geostat. Independent estimates put actual turnover at GEL20bn, given that the companies involved in the sector are subject to mild
55 GEORGIA Country Report December 2019 www.intellinews.com
