Big potential for small hydropower in Georgia

By Radoslav Dudolenski

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Private investment in Georgia’s energy sector pays off
The energy sector in my native Bulgaria is relatively hi-tech and liberalised. So when I came to Georgia at the end of 2006 to take part in the creation and management of a key energy company and a year later began running the firm, becoming an investor in the Georgian energy sector was the last thing on my mind.

This is one report from a series

Georgia: investing for change

It needed to be further stabilised. There had been almost no investment for decades and blackouts were commonplace due to technical failures or lack of any maintenance. There were a lot of regions where almost nobody wanted to pay for the energy they consumed and exports were practically impossible due to lack of reliable infrastructure and policies.
But soon reforms started. Generation and distribution were privatised, losses significantly cut, payments collected. Tariffs were also raised but not significantly.
This reduction in losses quickly led to increased consumption. Blackouts started disappearing, and investors started to take an interest in the sector
And in my life, which was spent between Tbilisi and Bulgaria where my wife and three children lived, it was time to make a choice: to tie my destiny to Georgia or to go back home. My family and I chose Georgia, and the children are growing up thinking Tbilisi is their home and my little son that it is the best city in the world.
Now settled firmly in Georgia, I soon felt ready to start my own business, developing small-scale hydropower plants. The Black Sea Transmission line which would enable electricity exports was nearing completion. So my new company obtained € 2.8 million financing from the EBRD, and we set to work.
In 2014, we commissioned our first HPP, 9.5 MW Akhmeta (by now we are running two HPPs with 11.5 MW capacity), in the Kakheti region famous for its wine.
An 80-year old local engineer once said that people had been trying to find a good spot for hydro in the area for decades, and we managed to find it quickly first on Google Earth!
It runs off a Soviet-built irrigation canal, connected to the Alazani and Ilto rivers, so as not to disrupt the environment. In fact, you wouldn’t even know there is a hydropower plant inside its smallish building; the surrounding vineyards keep growing happily.
Today we sell most of the electricity on the domestic market but have already started exporting to Turkey and also from time to time to Armenia. Now we have commissioned another small-scale hydropower plant nearby, also financed by the EBRD, and have plans for a couple more.  The construction of our third hydropower plant has already started.
My home country, Bulgaria, has been able to overcome a lot since the 1990s, and I hope for the same for Georgia.  
I want to see rising incomes. As an electricity producer, I want people to be able to afford more in their life and to have no worries about paying for electricity.
Thanks to our HPPs, we created hundreds of jobs during construction and then about 20 permanent jobs to operate the plants. These are jobs that have never existed before! More jobs like these are needed.
While it is great to be able to export electricity to Turkey, the domestic market in Georgia also needs to grow stably together with the growth of the economy.
And if I may voice a personal wish, it is for more acknowledgment for all those who create something, however small, where previously there was nothing. After all, it is those things that, in the long run, make the most difference!
Radoslav Dudolenski is the CEO of Hydrolea
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