Power Grid Enhancement Project

Location:

Georgia

Project number:

51422

Business sector:

Energy

Notice type:

State

Environmental category:

A

Approval date:

23 Jul 2020

Status:

Signed

PSD disclosed:

07 Oct 2019

Project Description

Provision of a loan of up to EUR 90 million to Georgia to support Georgian State Electrosystem (GSE) to implement reinforcement and enhancement of the electricity transmission grid in Georgia, contributing to a stable, reliable, cost-effective and efficient national transmission grid as a critical component of the efficient market infrastructure and electricity trading. 

Project Objectives

The Project aims to support Georgian State Electrosystem to implement the national power grid reinforcement and enhancement investment project consisting of 4 main components: (1) construction of the 500kV overhead line (OHL) Tskaltubo-Akhaltisikhe-Tortum; (2) construction of the North Ring; (3) reinforcement of the transmission infrastructure in Guria region; and (4) reinforcement of the transmission infrastructure in Kakheti region. The proceeds of the Bank's loan are expected to finance the North Ring component, including construction of (1) 57km 220kV double-circuit overhead line (OHL) Nenskra-Mestia; (2) Extension of the 500kV switchyard in Jvari substation; (3) 500/220/110kV substation Nenskra; (4) 2km 500kV OHL Kavkasioni tie to substation Nenskra; (5) 50km 500kV single circuit OHL Lajanuri-Tskaltubo; (6) 60km 220kV double-circuit overhead line (OHL) Tskaltubo-Namakhvani-Tvishi-Lajanuri; and 7) extension of 220kV substation Tskaltubo.

Transition Impact

ETI score: 66

The Project is in line with the Green Economy Transition (GET) initiative of the Bank as it will enhance the integration of renewable sources, especially hydro and wind, into the system. The project will also contribute to the resilience of the Georgian power sector by improving security of supply.

Client Information

GEORGIA SOVEREIGN

GEORGIA SOVEREIGN

The Borrower is Georgia. The loan proceeds will be on-lent to GSE, a state-owned transmission network owner and operator.

EBRD Finance Summary

EUR 90,000,000.00

The overall project is expected to be financed by up to EUR 90 million loan from the Bank.

Total Project Cost

EUR 267,000,000.00

Preliminary cost estimate of EUR 267 million was defined under the 10 Year Network Development Plan developed by GSE in its capacity as the Georgian Transmission System Operator (TSO) and approved by the Government of Georgia. KfW and German Federal Ministry of Economic Cooperation and Development already provided EUR 120 million for the project. EU NIP provided EUR 10 million grant from the project.

Environmental and Social Summary

The project is categorised A under EBRD's Environmental and Social Policy (2014)  as it has the potential  to have significant environmental and social (E&S)  impacts associated with the construction and operation of high voltage overhead electrical power lines.

The Environmental and Social Due Diligence (ESDD) included a review of the Environmental and Social Impact Assessment (ESIA) which has been undertaken for the Project, covering the entire project including the North Ring component expected to be financed by the Bank.  The ESIA was developed by international and national consultants in accordance with the EBRD Performance Requirements (PRs).

Stakeholder consultations were undertaken as part of ESIA Scoping and the ESIA disclosure package including the ESIA, Land Acquisition, Resettlement and Compensation Framework (LARCF), Stakeholder Engagement Plan (SEP), Non-Technical Summary (NTS), Environmental and Social Management Plan (ESMP) were disclosed on the 9th August 2019 on the GSE and EBRD websites.  Hard copies of the disclosure package were made available in municipal centres crossed by the routes and the NTS distributed to each community.  A programme of public meetings was undertaken, as outlined in the SEP, to seek feedback on the disclosure package.

The Project has taken an iterative approach to selecting and optimising the proposed routes of the transmission lines, considering a number of alternatives in accordance with a defined set of routing principles with the aim of avoiding Environmental and Social (E&S) sensitivities whenever possible through the route selection. The ESIA has assessed potential E&S impacts on a corridor centred on the transmission line routes which is anticipated to accommodate Project refinements during the detailed design process and the majority of any temporary facilities for which the exact locations are yet to be defined e.g. construction equipment storage areas.

Through the routing it has not been possible to fully avoid physical displacement on the components financed by EBRD due to the need to connect to existing infrastructure or other constraints.  7 households are anticipated to be subject to physical displacement due to the land use restrictions in the Right of Way established around the operating transmission lines to ensure the effective and safe functioning of the system.  33ha of Permanent land acquisition is required and an area of 1500ha will be affected by land use restrictions in the right of way, where normal agricultural activities will however be permitted to continue.  A LARCF has been developed to establish the framework for managing resettlement and detailed Resettlement Action Plans will be prepared and implemented. Overhead transmission lines have also been designed so that the Electric and Magnetic Fields (EMF) will meet guideline values based on good international practice.

One of the lines passes through the Svaneti Important Bird Area and some priority biodiversity features have been identified on both components.  Habitat loss will occur due to the clearance of vegetation from the Right of Way; construction activities are likely to cause disturbance to fauna and there is the potential for impacts on certain bird species e.g. raptors due to the risk of collision with the Project towers or lines.  In addition to the impact mitigation inherent to the route selection, further mitigations include the use of biodiversity specialists to supervise works; seasonal constraints on certain construction activities; the implementation of vegetation clearance and reinstatement plans; and a reforestation management plan, to achieve no net loss of priority biodiversity features. Impacts on birds will be mitigated via installation of bird deflectors on towers and transmission lines in areas identified as high collision risk and a post-construction monitoring programme and adaptive management will be implemented.

Stakeholder consultations were undertaken as part of ESIA Scoping and the ESIA disclosure package including the ESIA, LARCF, Stakeholder Engagement Plan (SEP), Non-Technical Summary (NTS), Environmental and Social Management Plan (ESMP) was disclosed in accordance with the SEP. Feedback received from stakeholders during the disclosure period included queries related to land acquisition and compensation which will be addressed through implementation of the RAP; visual impacts which will be reviewed during detailed design; and restrictions in the RoW and EMF which will be the subject of further communications to be included in an updated SEP. The Company will continue to undertake further stakeholder engagement as outlined in the SEP.
An ESMP has been developed and includes the responsibilities for E&S management for both the Project Company, the construction contractors and the mitigation measures required during construction and operation.  Construction contractors will be required to develop corresponding implementation plans.  The ESMP also establishes a defined process for managing any Project changes e.g. during the detailed design, which will be mitigated through application of the defined management plans and any additional measures if appropriate.

An Environmental and Social Action Plan (ESAP), which among others includes the mitigation measures described above, has been developed and disclosed with the ESIA package. Overall, through the implementation of the ESAP and the measures and actions committed to in the ESIA, the Project will be structured to meet the Bank's Performance Requirements. The Bank will undertake regular monitoring of the project to assess E&S performance during construction in accordance with the PRs and the implementation of the ESAP.  Monitoring will continue as necessary during the operation period.

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation and Grant Financing

ESIA of the project was funded by EBRD Shareholder Special Fund (SSF).

Company Contact Information

Ekaterine Verulashvili
info@gse.com.ge
+(99532) 2 510 202
+(99532) 2 98 37 04
http://www.gse.com.ge
2, Baratashvili Street, Tbilisi, Georgia, 0105

PSD last updated

11 Jun 2020

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

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General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP 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 following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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