Page 68 - GEORptAug21

At the opening of the new furnace, Natia Turnava, Georgia’s Minister of Economy, said that ferroalloys account for almost 10% of the country's local exports. Georgian Manganese employs about 5,000 people in the towns of Zestaponi and Chiatura.
"Of course, it is very important to be able to arrange such a high, ecologically clean and technologically new furnace through domestic investment, reinvestment, which is also important - air emissions are practically non-existent. We are confident that this will be a very strong application to help our economy grow as fast as possible, overcome all crisis events and increase exports even more. We, the Ministry of Economy, as the government of Georgia, fully support local production, and the Zestaponi Ferroalloy Plant is considered to be one of the flagships of our local, national production," said Turnava.
Mine strikes in Georgia’s northwest have become a regular occurrence over the past few years. In mining towns ranging from Tkibuli to Chiatura, work has regularly ground to a halt as workers protest dangerous conditions and late and insufficient pay.
9.2.5 Utilities corporate news
Fitch affirms Georgia Global Utilities at B+, outlook stable
Fitch Ratings has affirmed Georgia Global Utilities JSC (GGU) Long-Term Issuer Default Rating (IDR) at 'B+'. The outlook is Stable. Fitch has also affirmed GGU's senior unsecured rating at 'B+' with a Recovery Rating (RR) of 'RR4'.
The affirmation reflects GGU's consolidated credit profile of its regulated water utility business (Georgian Water and Power LLC, GWP), and its higher-risk renewable electricity business, which is nevertheless supported by long-term power purchase agreements (PPAs). Overall size, asset quality, forex (FX) risk, the operating and regulatory environment, and high, albeit decreasing, leverage remain key rating constraints.
Fitch expects GGU's EBITDA margin in 2021 and 2022 to significantly improve toward 63%, from a low of 56% in 2020. The rating agency forecast GGU's profit to be supported by the higher-than-expected water tariff increases. The approved water tariffs for 2021-2023 increase allowed revenue by about 36% in comparison with the previous regulatory period for the entire water segment. As a result, Fitch expected funds from operations (FFO) net leverage to return to below the negative rating sensitivity in 2022-2023.
The pandemic affected GGU's revenue and Ebitda, while lower demand from business customers contributed to the decline for the water segment. However, volume risk is mitigated by the regulatory framework and unearned revenue is expected to be recovered in 2021-2023 with the application of time value of money, Fitch also said.
Fitch expected GWP to be the most significant operating company for GGU at 75% of average revenue and 68% Ebitda per year for 2021-2024.
GWP is a regulated water utility, with a natural monopoly in Tbilsi, and owns the water and wastewater infrastructure. The remaining business is electricity sales. It operates hydropower plants with an installed capacity of 145MW (linked to the water utility), with about 50% of electricity generated for own consumption, with excess electricity sold predominantly through bilateral agreements with direct customers.
68 GEORGIA Country Report August 2021 www.intellinews.com