Page 49 - GEORptNov18

Anadolu in 2014 completed the largest hydropower plant built in Georgia for 40 years: a 85MW plant, at a cost of $200mn, located on Paravani river in the southern part of the country close to Turkey. The EBRD approved at that time a $52mn loan to support financing the power plant. The World Bank Group's International Finance Corporation contributed $40.5mn and another $23mn was raised from commercial banks.
Of relatively small size and using environmental-friendly technology, the new Kheledula HPP project was rated by the EBRD as Class A for its moderate environmental and social impact.
The EBRD’s loan would be part of a $60mn financing package with the remaining part mobilised from third parties.
The borrower is a special purpose vehicle established in Georgia to develop, construct and operate the project. It is majority-owned and controlled by the Anadolu Group, a large Turkish conglomerate partially listed on the Istanbul Stock Exchange.
The power plant with a capacity of 51MW is to be developed on the Kheledula River located in the Racha-Lechkhumi and Kvemo Svaneti regions. Georgia, already having robust power generation capacities (some 80% of its electricity is generated in hydropower plants ) and being an established regional exporter, plans to build a large number of dams because its generation capacities largely matching consumption tend to fall short of growing consumption . Turkey is among the largest investors in Georgia and a significant export market for Georgia’s electricity. Environmental NGO Bankwatch, however, has questioned the plans for more hydropower plants in the absence of a broader energy sector strategy. Furthermore, the environmental impact of the planned dams is major, Bankwatch has warned .
9.2 Major corporate news 9.2.1 Oil & gas corporate news
Waltbay, an offshore subsidiary of Caucasus Business Solutions (CBS) registered in Georgia, signed an agreement to become the sole owner of KazTransGas-Tbilisi (KTGT), the Tbilisi gas distribution network, New Georgia announced on October 8 citing state TV.
The price of the deal was not disclosed, but the money will barely pay KTGT’s debt to the Georgian Oil and Gas Corporation.
Although it was not confirmed, it is possible that CBS is part of Georgian Industrial Group, which announced earlier this year an agreement for the takeover of KTGT.
The divestment of the subsidiary by KazTransGas would be credit positive for the Kazakh state-owned gas pipeline operator, Moody's said in a note on September 19. Moody’s views the transaction that way because KTGT will dispose of an asset that it has not been able to control since 2009, and the transaction will strengthen the company’s liquidity.
Earlier this year, KazTransGas was close to selling its troubled Georgian subsidiary to Georgian Industrial Group.
"The company Waltbay is ready to face the existing challenges and accepts the social responsibility, which means providing the population with high-quality and safe natural gas," KTGT said in a statement.
KTGT was founded in 2006 as a 100%-owned KTG subsidiary. The same year, KTGT purchased a monopoly gas distributor in Tbilisi for $12.5mn. It invested approximately $130mn in 2006-2009 into Georgia’s gas distribution system. In 2009, Georgian Oil and Gas Corporation filed a lawsuit against
49 GEORGIA Country Report November 2018 www.intellinews.com