Kheledula HPP



Project number:


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PSD disclosed:

25 Sep 2018

Translated version of this PSD: Georgian

Project Description

Provision of financing to Kheledula Energy LLC (the "Borrower") for the development and construction of the Kheledula HPP, a 51 MW run-of-river hydropower plant on the Kheledula River located in the Racha-Lechkhumi and Kvemo Svaneti regions of Georgia (the "Project").

Project Objectives

The transaction will support the development and construction of the Project resulting in a reduction of greenhouse gas emissions and Georgia's carbon intensity.

Transition Impact

The Project will contribute to reducing Georgia's carbon intensity and meeting its increasing power demand while furthering cross-border energy trade with Turkey. The Project is expected to result in
a reduction of greenhouse gas emissions of approximately 63,000 tonnes CO2e annually and is fully consistent with the EBRD's GET handbook.

Client Information


The Borrower is a special purpose vehicle established in Georgia to develop, construct and operate the Project. The Borrower is majority owned and controlled by AG Anadolu Grubu Holding A.S. (the "Anadolu Group"). The Anadolu Group is a large Turkish conglomerate, partially listed on the Istanbul Stock Exchange.

EBRD Finance Summary

USD 30,000,000.00

A USD 60 million A/B loan out of which the EBRD will finance USD 30 million and the remaining portion will be mobilised from third parties.

Total Project Cost

USD 88,700,000.00

Environmental and Social Summary

The Project has been Categorised A in accordance with the EBRD's 2014 Environmental & Social Policy (ESP).  As a result, the development and construction of the Kheledula HPP, a 51 MW run-of-river hydropower plant on the Kheledula River located in the Kvemo Svaneti region of Georgia, requires an Environmental and Social Impact Assessment (ESIA) of the proposed Project.  The Project includes two weirs one of which exceeds the 15m height ICOLD definition of large dams which is in turn cited in Appendix 1 of the ESP an indicative threshold for a Category A Project.

The Project envisages a hydropower scheme operating on the natural runoff of the Kheledula and Devashi Rivers.  Weir-1 will be built on the Kheledula River, from where water will be diverted into the neighbouring Devashi River valley through a free-flow tunnel. Weir-2 will be built there and water from the Devashi River will also be collected.  Water will then flow through a tunnel and pressure penstock to the powerhouse on the right bank of the Tskhenistskali River.  More details on the Project components are available in the published documents.

The Project was subject to an Environmental and Social Impact Assessment (ESIA) that was approved by the relevant Georgian environmental permitting authority in 2017.  The Sponsor retained an international ESIA consultant well versed in sector and country in order to carry out additional field studies and prepare a Supplementary ESIA in order to ensure that all the Project components are assessed in compliance with the EBRD's E&S Performance Requirements and the EBRD's HPP Guidance Note, in addition to the national legislation requirements.  A design change was introduced to optimise the Project by the HPP developer in 2018 (replacement of the pressure tunnel by an underground penstock in Devashi valley), and a complementary ESIA was prepared for this change at the request of the permitting authority.  When finalised this additional design change, modified local ESIA will also be published on the Company's website.  It shall be noted that this design change has been subject to this Supplementary ESIA to ensure that overall the Project is structured to comply with the EBRD PRs and that there is no discrepancy between the Supplementary ESIA and the final design.  Furthermore, as part of the Environmental and Social Due Diligence the capacity of the Company and Sponsor to implement the EBRD's requirements was assessed in detail.

The permitted ESIA, together with the present Supplementary E&S Impact Assessment, as well as a Stakeholder Engagement Plan (SEP), a Non-Technical Summary (NTS) and an Environmental and Social Action Plan (ESAP) that form the Supplementary ESIA Disclosure Package, will be disclosed at least 60 days prior to the Project's consideration for financing by the Bank's Board of Directors as per the EBRD's Public Information Policy.

In terms of environmental impacts the following issues were considered and assessed as part of the present Supplementary ESIA: location in mountainous area with steep slopes, construction machinery and traffic generated dust, noise and vibration, biodiversity impacts, rivers flow regime and application of an environmental minimum flow, sediments transport and water quality evaluation.  The Project is located in considerable distance from protected areas or candidate Emerald sites, and to assess impacts on aquatic and terrestrial habitats and species of conservation value additional biodiversity baseline studies and assessments were carried out. The Biodiversity Management Plan is included in the Supplementary ESIA and includes such mitigation measures as calendar constraints for construction works for birds nesting and bats maternities duration, riverbed management and maintenance for fish, catch and relocation for reptiles and amphibians and anti-poaching and awareness raising actions for bears and chamois among other activities.

The supplementary ESIA details the mechanism by which land take requirements have been met and confirms that all acquisition has been, and will continue to be, by amicable agreement and that PR5 is therefore not triggered.  In addition, social baseline studies and consultations confirm there is no livelihood loss associated with the land take requirements.  Other social impacts such as labour and working conditions, worker OHS and community safety are addressed in the Supplementary ESIA and the resulting E&S Management Plans which have been developed in accordance with the relevant PRs.  The Company is in the process of developing a Community Support Programme, which will be based on a needs assessment to be undertaken in consultation with the local communities.  In addition, the Project Company has committed to provide assistance to local communities that are not considered to be directly Project affected but are nevertheless import Stakeholders by way of the alleviation of natural hazards (e.g. clearance of debris flows after by mechanical means).

Stakeholder engagement activities - already completed and planned - are summarised in the SEP and include open house meetings as well as designated consultations local to the Project and in Tbilisi.  During operations the company has committed to publically disclosing environmental related information such as the release of environmental flow in order to indicate a commitment to transparency and good governance.

The ESDD undertaken by the Bank confirmed that the Client has the capacity to implement the Bank's ESP PRs.  Construction and operational related E&S risks and impacts have been assessed in accordance with best practice.  The mitigation measures to manage any potential risks associated with the Project and improvements in corporate management E&S systems are included in the ESAP that is agreed with the Client.  The ESAP includes requirements to implement specific E&S management plans included in the Supplementary ESIA and to comply with the requirements of the national environmental permits.

There is an Environmental and Social Impact Assessment available for this Project and the EBRD will monitor the project throughout the consultation period, into construction and operations.

Technical Cooperation


Company Contact Information

Onur Tosunoglu
+995 322251183
Chavcavadze Avenue 37/D 0162 Tbilisi, Georgia

Business opportunities

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Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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