EBRD finances hydro power modernisation in Georgia

By Sergiy Grytsenko

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The EBRD is making its first investment in the renewable energy sector in Georgia with a loan to finance the construction of a new hydro power plant in the south west of the country.

The Bank and the International Finance Corporation (IFC), a member of the World Bank Group, are providing a US$ 115.5 million credit to Georgia-Urban Energy to co-finance the construction and operation of its 87 MW Paravani plant.

Georgia-Urban Energy is the Georgian subsidiary of the Turkish group Anadolu Endustri Holding.

The EBRD will provide US$ 52 million of the total financing, with US$ 40.5 million coming from the IFC and a further US$ 23 million syndicated via commercial banks. As part of the project financing, the EBRD will also take a US$ 5 million equity stake in Georgian-Urban Energy.

The development of Georgia’s large hydro resources will help the country to reduce carbon-based generation and also cut dependence on imported fuels in winter months.

“This project confirms the EBRD’s determination to continue making significant investments in renewable energy in a drive to boost competitiveness of economies in the region, improve Georgian energy security and also mitigate the impact of climate change,” said Nandita Parshad, the EBRD’s Director for Power and Energy Utilities.

This first private power generation project in Georgia complements our overall strategy for Georgia and our recent investment in the high voltage transmission network in Georgia.” she added.

Hursit Zorlu, Chief Financial Officer of Anadolu Group, said that the Paravani Project is expanding Anadolu’s renewable energy generation capacity. “It will also benefit the Turkish electricity market to which Paravani hydro power plant will be able to export green energy,” he added.

Tuрban Aksoy, Head of the Energy Group, Anadolu Group, said: “EBRD and IFC are playing a key role in funding the Anadolu Group's sustainable energy investments in Georgia. We hope that this strategic support will pave the way for other investors in the country’s renewable-energy market."

This strategic support by these lenders will pioneer the investors to Georgian market and strengthen the relationship between Turkey and Georgia.

Around 20 per cent of the Bank’s annual investments are dedicated to sustainable energy projects. Under its Sustainable Energy Initiative, started in 2006, the Bank has financed around €5 billion in about 300 projects yielding 27 million tonnes of CO2 reductions.

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.

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