The EBRD is financing the upgrade of a hydro power plant in Georgia.
The reservoir of the Enguri/Vardnili hydro power plant is located upstream in the region of Svaneti whilst the powerhouse is downstream, in Abkhazia.
In 2010 the EBRD, along with the EIB, decided to finance a rehabilitation of the plant using a Neighbourhood Investment Facility (NIF) grant. This initiative is the third phase of a long lasting cooperation with the European Union which had started in 1998 in the aftermath of the 1995 civil war.
Contributing to stability and energy security
The project brings together stakeholders with sensitive relationships, therefore contributing to mitigating the tensions across the region. Second, the project has two highly valuable outputs: the renovation of the plant reduces the risk of floods, considerably enhancing the security of the surrounding populations; and it increases the production capacity by 30 per cent with no environmental cost, which is all the more critical given that the plant supplies around half the electricity consumed in Georgia, acting both as a spinning reserve for peaks and network stabilisation. Lastly, as with other NIF infrastructure projects, the Enguri/Vardnili project has a high leveraging effect: the grant provided by the NIF amounts to €5 million, while the EBRD invested €20 million for a total project cost of €45 million.