Prime Minister: Electricity to Become Georgia's Major Export Item

Electricity will become Georgia's major export item in four to five years, Georgian Prime Minister Nikoloz Gilauri promulgated in introducing the reshuffled cabinet of ministers and the government’s new action program to the Georgian parliament’s special plenary session on July 2.

Gilauri put forward the government's action program, which is still called as Georgia without Poverty, and answered questions of parliament members. The Prime Minister noted the hydro generation ratio in Georgia’s total electricity generation makes up 80 percent, while the country uses only 18 percent of total hydropower potential. Therefore, over 20 hydro power plants will be constructed in four to five years with total installed capacity of 1800 megawatts, so as the ratio of hydro resources rise to 100 percent in Georgia's total electricity generation. Contract agreements have been already concluded on construction of several hydro power plants, Gilauri pleased MPs.

Investors are showing hyperactivity in this sector, Gilauri added.
Investment proposals are coming from Canada, Turkey and even South Korea. The inauguration of the Georgia-Turkey 500-kilovolt transmission line construction has considerably increased the interest of Turkish companies in Georgian energy projects, Gilauri noted and continued the country will inaugurate construction of sixteen hydro power plants in 2011 along with other five ongoing projects.
The Prime Minister specified the construction of Bakhvi HPP (9 megawatts), Paravani HPP (78 megawatts) and Mtkvari HPP (43 megawatts) has already started, while the construction of Khobi 2 HPP and Lukhuni HPP will commence until 2011.

According to the official statistics, Georgia generated 8.3 billion kilowatt-hours in 2009. The country exported 747 million kilowatt-hours and imported 253 million kilowatt-hours in the reporting period.

In the meantime, the European Bank for Reconstruction and Development (EBRD) is expected to disburse a sovereign loan of 20 million EUR to finance the rehabilitation of the state-owned Enguri hydro power plant (HPP) as part of Georgia's efforts for improving the energy security and championing the renewable energy supply in the region.

The Enguri hydro power plant was built in the 1970s. Its arch dam is the tallest of this type in the world. With an installed capacity of 1,300 MW, the plant is capable for satisfying about 50 percent of Georgia's electricity demand.

The EBRD loan is considered to be an extension of 48.5 million USD loan, which was approved in 1998 for the initial phase of the HPP modernization.

The project will allow Enguri HPP to increase the energy output by at least 15 percent and export electricity to regional markets, including Turkey.

The EBRD's original loan, which was extended in 2006, financed urgent repair works, rehabilitation of the HPP two oldest units and reconstruction of Unit 3. The loan extension of 20 million EUR will finance the modernization of the remaining two facilities.

Nandita Parshad, EBRD Director for Power and Energy, said the modernization program will make Enguri HPP a secure, reliable and comparatively cheap renewable energy source and the whole region will make the benefit of it.

This project is expected to be co-financed by the European Investment Fund (EIF) and the European Investment Bank (EIB) too.