Georgian Low Carbon Framework

Location:

Georgia

Project number:

48124

Business sector:

Power and energy

Notice type:

Private

Target board date:

16 Dec 2015

Status:

Board Approved

PSD disclosed:

10 Nov 2015

Sub-projects signed under this framework

Translated version of this PSD: Georgian

Project Description

Under the Georgian Low Carbon Framework, EBRD will provide financing of up to US$ 120m for medium-sized renewable energy projects in Georgia. There is no lower or upper limitation to the future installed capacity of specific sub-projects, although the projects in the range of 10-60 MW will be preferred.

The projects under the Framework will encompass development, construction and operation of renewable energy generation projects in Georgia. It is expected that the majority of the projects will be hydro power plants but the indicative pipeline includes wind power plants and assessment of the country's solar capacity.

Project Objectives

The Georgian Low Carbon Framework will support investments in medium-sized renewable energy projects in Georgia. The projects under the Framework will support the Government strategy to foster low carbon generation, cover the country's seasonal winter demand and to support private ownership in the energy sector.

Transition Impact

The Framework will be instrumental in supporting the low carbon power generation as well as diversification of renewable energy sources in Georgia to include wind and potentially solar. The first sub-project under the framework, Gori Wind (PSD published on 15 October 2015), will support the development, construction and operation of the first wind power plant in Georgia. Gori WPP, as a pilot windfarm project, will roadtest the market and renewables framework for windfarms and is expected to demonstrate viability of such projects in Georgia. In addition, through TC funds, the Framework will support the Georgian Ministry of Energy to produce a study on the solar resource map of Georgia, a renewable energy source presently untapped in the country.

Improving the conditions for regional electricity trade is critical for future growth of renewable generation capacity in Georgia. A key improvement to Georgia's electricity trading capacity would be to develop a cross-border electricity trading platform.

The Framework will benefit existing as well as new operators of renewable energy power plants through facilitation of trades on one platform, more transparent trading as well as more transparent pricing. A key component of the Framework is to conduct policy dialogue and capacity building with the Ministry of Energy of Georgia and Electricity System Commercial Operator ("ESCO") to support ESCO with the design and implementation of a cross-border energy trading platform in Georgia.

The Framework is expected to increase the share of privately owned generation capacity in Georgia where 45% of domestic electricity output is generated by state owned facilities. The sub-projects under the Framework will predominantly target private sector investors and introduce new privatelyowned entrants to the Georgian electricity generation market, as well as support the expansion of existing private investors operating in a liberalized market environment. The Bank will consider working with state-owned companies on an exceptional basis when there will be

i) no interest from the private players and

ii) the state-owned entity will be operating in the same competitive environment as commercial players.

The Framework is expected to build and transfer expertise related to renewable energy project development to local companies including project management and promotion of best renewable technologies in the market. Sub-projects with experienced foreign investors have the potential for transferring managerial skills and institutional knowledge into the Georgian electricity market which is presently dominated by local investors.

Client Information

Eligible clients will be local and international private and institutional companies and in exceptional cases local public investors investing in medium-sized renewable energy projects in Georgia. It is expected that the vast majority of projects under the framework will be with private investors, while public projects will only be financed under exceptional circumstances.

EBRD Finance Summary

US$ 120,000,000.00

In addition to own financing of up to US$ 120,000,000, the Bank expects to mobilize financing of the same amount through A/B loans and parallel loans.

Total Project Cost

US$ 350,000,000.00

Environmental and Social Summary

The Georgian Low Carbon Framework is not categorised; however, each sub-project under the Framework will be categorised by ESD at the concept review stage, if necessary after an Initial Environmental and Social Examination, and will undergo separate Environmental and Social Due Diligence (ESDD).  The ESDD will be undertaken by ESD directly or through independent consultants; the cost for the ESDD will be covered by the Client.

As a minimum, an Environmental and Social Action Plan (ESAP), a Non-Technical Summary (NTS) and a Stakeholder Engagement Plan (SEP) will be prepared for each Project. The ESAP and the SEP will be implemented by the Client. ESD will monitor the implementation of the ESAP and SEP through annual reports provided by the Client and specific monitoring missions undertaken by ESD directly or through independent consultants. The Client will cover the related monitoring costs.

Technical Cooperation

Technical cooperation will be provided for

1) supporting a study of solar resource mapping of Georgia;

2) supporting Electric System Commercial Operator, Georgia's electricity trading company, in the
design of the trading platform.

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.