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foster the digital economy and innovative start-ups.​ The World Bank will finance the project, which is estimated to cost $40mn. Countries in the South Caucasus, including Georgia, have been seeking to develop their value-added sectors, such as information technology, in recent years. Armenia is a leader in this sector in the region, with IT and technology accounting for 5% of GDP, and a sizable qualified workforce that has attracted the likes of Microsoft to open up innovation centres in the country. Meanwhile, Azerbaijan has been working on digitising its public services and installing fibre-optic Internet connections across the country. Following in their footsteps, Georgia is also working on Internet connectivity and promoting tech start-ups. The project will comprise four parts, namely the development of an innovation infrastructure through the creation of a network of innovation hubs in selected cities and town; the provision of innovation services; ensuring financing through technical assistance and matching grants; and project implementation support.
9.1.8 ​Renewable energy sector news
LSE-listed Georgian holding Georgia Capital, the largest shareholder in the Bank of Georgia and Georgia Healthcare Group, has announced that it has received permits to develop two wind farms with an installed capacity of 108MW.​ At present, Georgia has a sole wind farm, with a capacity of 21MW, It was purchased by the holding from the state last November
The government has approved the concept for the group's renewable energy business's Wind Power Plant (WPP) projects near Tbilisi and Kaspi, Georgia Capital announced on January 13.
The approval represents a significant milestone in obtaining Power Purchase Agreements (PPAs) from the state, and these are expected to be finalised in the near future, according to Georgia Capital press release.
The Tbilisi and Kaspi wind farms are expected to have an average capacity factor within the 35%-40% range. Both projects are to be constructed in parallel with an expected commissioning date in the second half of 2022. Georgia’s first wind farm, Qartli Wind Farm was developed by the state with financing from the European Bank for Reconstruction and Development (EBRD).
Under the contract signed in November, Georgia Capital will pay $14.4mn for a 100% equity interest in Qartli. The gross debt of Qartli Wind Farm is $17.4mn. The facility operates a WPP with a very high average capacity factor, given as 47%.
Qartli WPP is expected to add approximately $4.0mn of operational profit (Ebitda) to the renewable energy business’s income in 2020 on the back of an 85 GWh gross annual generation.
Wind farms with 350 MW of installed capacity will be built in Georgia by 2021, according to Deputy Minister of Economy and Sustainable Development Davit Tvalabeishvili, as ​quoted​ ​by Business Media. According to Tvalabeishvili, 350 MW is the maximum power that the Georgian electricity system could receive from wind farms at this time.
"We conducted a study with German experts and found that by 2021, with the reserve capacities we have in the system, we could build about 350 MW of wind power stations and about 130 MW of solar power. If we build more, we could face blackouts since we do not have enough backup capacity," he was cited as saying.
The government has developed incentives to support the development of wind farms. It will pay 6.5 US cents per kWh over the first 10 years of operations.
48​ GEORGIA Country Report​ February 2020 ​ ​www.intellinews.com