Project Description
The EBRD is considering extending a senior loan to Adjaristsqali Georgia LLC (the "Borrower") of up to USD 89.9 million (EUR 66.2 million) for the financing of the development, construction and operation of Shuakhevi HPP, a hydroelectric power plant to be located on the Adjaristsqali river in south-western Georgia (the "Project"). Shuakhevi HPP will have an installed capacity of 187 MW with expected electricity output of 452 GWh. The plant is designed as a run-of-the-river plant with capacity for diurnal storage in two reservoirs, allowing Shuakhevi HPP to store water for up to 12 hours and sell electricity at peak demand times.
Project Objectives
The transaction supports the development and construction of another renewable energy generator resulting in a reduction of greenhouse gas emissions and Georgia's carbon intensity.
Transition Impact
ETI score: 80
The project's transition impact stems from three factors:
(i) More widespread private ownership because of the market entry of a new private competitor on the electricity generation market in Georgia;
(ii) Demonstration of new financing methods as the project will be the first power project in Georgia to rely on limited recourse financing; and
(iii) Setting standards for corporate governance and business conduct from the project's potential for setting improved standards for HPP implementation in Georgia through the application of international best practices.
Client Information
ADJARISTSQALI GEORGIA LLC
Adjaristsqali Georgia LLC is a special purpose vehicle established in Georgia for the sole purpose of constructing a cascade of three hydroelectric power plants on the Adjaristsqali river in south-western Georgia, the first of which will be Shuakhevi HPP. Adjaristsqali Georgia LLC is owned by Clean Energy Invest AS (50%) and Tata Power (50%).
EBRD Finance Summary
USD 89,851,000.00
Total Project Cost
USD 416,170,000.00
Additionality
Financing structure:
- EBRD offers a tenor, which is longer than available to the client in the market on reasonable terms and conditions.
- EBRD offers an innovative financing structure (limited recourse project finance) on commercial terms not available from other banks.
Environmental and Social Summary
The project has been categorised A in accordance with the Bank's 2008 Environmental and Social Policy. The project includes two dams that are 39 metres and 22 metres high, respectively, each higher than the 15-metre height cited in Appendix 1 of the 2008 Environmental and Social Policy as indicative threshold for Category A. In addition, the area of influence includes another such large dam, the 19-metre Koromkheti Dam, and extensive tunnelling at both the project site and within the area of influence.
The sponsors have retained an international consultant and prepared and disclosed for public review and comment an Environmental and Social Impact Assessment (ESIA) package, including:
- Non-Technical Summary (NTS);
- Environmental & Social Impact Assessment (ESIA)
- E&S Management Plans;
- Construction Management Plans;
- Biodiversity Action Plan;
- Land Acquisition and Livelihood Restoration Plan;
- Stakeholder Engagement Plan (SEP); and
- Environmental and Social Action Plan (ESAP).
The ESIA package is currently being disclosed in accordance with the EBRD's Public Information Policy, during which period all comments received will be considered. The Bank's environmental and social due diligence determined the ESIA package was fit for purpose and meets the EBRD's Performance Requirements.
Construction and operational related E&S risks and impacts have been assessed in accordance with best practice and appropriate mitigation measures proposed which have been included in the ESAP.
The ESAP, agreed by the EBRD and the sponsors, includes key actions the sponsors have agreed to implement in order to achieve the Bank's Performance Requirements throughout the project cycle.
The project will be monitored by the bank in line with the commitments in the ESAP, regulatory requirements and the Performance Requirements.
There is an Environmental and Social Impact Assessment available for this project.
Technical Cooperation and Grant Financing
None.
Company Contact Information
Rakesh Naik, CEO
+995 577 691968
Implementation summary
The Project is one of the largest direct foreign investments in energy sector of Georgia, which helped to develop regional infrastructure and increase regional budget revenues in addition to local employment and investment. The Project was the largest greenfield hydropower plant in the country with one of the longest hydropower tunnels in the world. Shuakhevi is also one of the first projects financed under a limited recourse project finance structure in the region.
The plant was designed and operated in line with EBRD's 2008 ESP and Good International Practice. These high standards, particularly for such a complex plant, set a notable example for future HPP projects in Georgia and the Caucasus region. As a part of transition impact, the Project has contributed to more widespread private ownership as well as to the demonstration of new replicable behaviour. After Shuakhevi HPP, a number of other small and medium sized hydro power plants and other renewable projects were financed under private ownership and on a limited recourse basis.
PSD last updated
22 May 2022
Understanding Transition
Further information regarding the EBRD’s approach to measuring transition impact is available here.
Business opportunities
For business opportunities or procurement, contact the client company.
For business opportunities with EBRD (not related to procurement) contact:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com
For state-sector projects, visit EBRD Procurement:
Tel: +44 20 7338 6794
Email: procurement@ebrd.com
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.
