The EBRD is continuing to support the development of renewable energy in Georgia with its first equity investment in the country’s power sector. The Bank is making a US$ 5 million investment in Georgia Urban Energy LLC (GUE), which will manage the construction of a new hydropower plant in the south west of the country.
This equity transaction is part of a larger EBRD investment which included a US$ 63.5 million loan signed in June earlier this year.
The project will help GUE, a subsidiary of the Turkish Anadolu Group, to complete the construction of the 85 MW Paravani hydro plant. The plant will play a key role in the country’s non-carbon energy mix and strengthen security of energy supply in Georgia and Turkey.
After the project’s completion, the plant will be connected to both Georgian and Turkish grids through a converter substation located in Akhaltsikhe, Georgia. The substation is part of the EBRD-funded Black Sea High Voltage Transmission Line project, which connects the Georgian and Turkish electricity networks.
Speaking at the signing ceremony, Olivier Descamps, EBRD Managing Director for Turkey, Eastern Europe, the Caucasus and Central Asia, said that the project was a landmark transaction as the first cross-border private power generation project in Georgia.
“The project supports Georgia’s efforts to sustain greener power policies and tap into its renewable energy resources. We are proud to partner with Anadolu on such a ground-breaking project, our eighth transaction together. This partnership strengthens bilateral commercial ties in the EBRD’s transition region,” he added.
According to Tuncay Özilhan, Anadolu Group’s CEO, the Group has a target of reaching 2,000 MW generation investments in the power sector in Turkey and the neighbouring countries. “We are pleased to make our first cross-border power investment in Georgia, where we want to expand our investments. Hence, we very much appreciate this exceptional support and cooperation with the EBRD in the Paravani Project,” he said.
The EBRD is the largest equity investor in private companies mainly focusing on growth and expansion capital in central and south-eastern Europe and the CIS.
“This equity investment highlights the value-added role the EBRD can play in attracting foreign investment given our significant experience to date in the Georgian power sector. With this investment, we demonstrate our strategic commitment to the development of renewable energy and improvement of energy security in the region,” said Nandita Parshad, EBRD Director for Power and Energy Utilities.
The EBRD remains a committed partner in Georgia. In 2010 the EBRD’s investments totalled €348.6 million. Since the beginning of its operations in Georgia, the EBRD has invested approximately €1 billion in over 120 projects, with 70 per cent of the projects representing investments into the private sector.