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Changes in Georgian Energy Sector
1. Ministry of Energy and
Natural Resources of Georgia
Hydropower Potential and Investment
Opportunities in Georgia
2. INTRODUCTION
Economy International Recognition
• Open and dynamically growing • World’s Top Reformer country
economy according to Ease of Doing
• Minimum bureaucracy and liberal Business (WB/IFC)
regulations • Government’s strong
• Diversified economic growth commitment for further reforming
Regional Energy Hub
• Reliable transit country
• Net electricity exporter to all four
neighboring countries
• Rapidly expandable energy
markets
• Construction of additional
electricity export infrastructure
www.menr.gov.ge 2
4. EXISTING HYDRO POTENTIAL
Vast untapped hydro resources
Top country in water resources per capita
In total 26,000 rivers
300 rivers in terms of energy production
Only 18% of total hydro potential is utilized
HPP Greenfield potential of 20 TWh
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5. EASY REGULATORY FRAMEWORK
Greenfield projects based on Build-Own-Operate (B-O-O)
principle
Totally deregulated newly built HPPs - investor is free to choose
the market and the price
No special fee for the grid connection
Free third-party access to the grid
No license required for export and no tariff set
Guaranteed purchase offered by GoG for three months
Priority access for transmission to Turkey (Long term contract
with TSO) with new HPPs
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6. PERMITS AND LICENSES
Construction Generation
Permit License
Ministry of Economy GNEWRC
& Sustainable
Development
Above 13MW*
Issued within 60
working days Issued within 30
working days
* HPPs with less than 13 MW do not require Generation License
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7. EXPORT OPPORTUNITIES
Georgia’s hydro potential can be used to offset part of the
growing demand of neighboring as well as of European
countries
Over the last three decades Turkish demand for electricity has
grown at an average rate of 7.6% per annum
By 2013 Turkey is expected to be a net importer of electricity
The peak demand season (summer) in many of neighboring
countries occurs in Georgia’s peak supply season – when river
flows are at their highest
Increased profits from carbon credits sales
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8. EXPORT ORIENTED PROJECTS
40 HPP on-going Projects
• Total installed capacity of 2506 MW and annual generation up to 10.2 TWH
• Projected investment USD 4.1 bln.
• Construction works to be finished in 2014-2017
Major companies operating in
Georgia
• Anadolu (Turkey)
• Peri (Georgia)
• Ağaoğlu (Turkey)
• Trans Electrica Ltd.(India)
• Energo Pro (Czech)
• Clean Energy Group (Norway)
• KGM (Georgia)
10 new HPP constructions ongoing
• Rusmetal (Georgia); and etc
15 new HPP constructions will be launched in 2012
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9. INFRASTRUCTURE WITH NEIGHBORING
COUNTRIES
Georgian power grid is connected
to the grids of all of neighboring
countries
Construction of new high voltage
500/400 KV line to Turkey will be
finished by 2012
Construction of additional
interconnection with Turkey is
under negotiation
Existing Transmission lines
• Russia 1155 MW
Existing & Planned Transmission Lines
• Turkey 2000 MW
• Armenia 835 MW
• Azerbaijan 1150 MW
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10. INVESTMENT OPPORTUNITIES
Currently, 41 HPP projects (each up to 100 MW) are
offered to potential investors
Investor is free to choose and apply for construction of
up to 7 potential HPPs from the list
Investor is not limited with the list
Terms and conditions of EOI for HPPs more than 100
MW capacity is subject of Government’s resolution
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11. HPPs PRE FEASIBILITY STUDY INCLUDES
Financials/Ratios Technical Projection
Income Statement HPPs Technical Data
Cash Flow
Hydrological Data
Balance Sheet
Topographic
NPV Maps
IRR Other Necessary Data
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12. LARGE-SIZE HYDRO PROJECT
Namakhvani HPP (Cascade Type)
Installed capacity – 450 MW;
Av. Annual Generation – 1,6 TWh;
Estimated investment cost – USD 800 mln.
Namakhva
Tvishi Joneti
ni
Installed capacity 100 MW 250 MW 100 MW
Annual average
386 GWh 941 GWh 354 GWh
generation
Height of dam 56.5 m 111.0 m 31.0 m
Concrete
Type of dam CVC gravity Rock fill
arch
Type of diversion Tunnel Tunnel Channel
Gated over Tunnel, In river,
Type of spillway
Expression of interests on: dam gated gated
Maximal water head 36.3 m 83.0 m 32.0 m
Number of turbines 2 units 3 units 2 units
A. Consultancy services and, Type of turbines Kaplan Francis Kaplan
2 x 110, 1 x 2 x 50
B. EPC contractor Power of units [MW] 2 x 50
30 MW
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13. INVESTMENT SUPPORTING FACTORS
Liberal Tax Legislation
• Only 6 taxes effective in Georgia
• Low and flat tax rates
• Internationally accepted methods and practices
• Minimum bureaucracy
• Light administrative burden to taxpayers
Georgia has in force 36 OECD model Double Taxation
Avoidance Treaties
List of treaties is expanding rapidly, additional 9 Treaties are
in line for official signature or ratification
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14. INVETSMENT ADVANTEGES
Deregulated power sector with very impressive turnaround since
2004
Distribution companies privatized and operating at high profit
Significant existing private investment in generation assets
GoG's strong support and commitment aimed at developing
hydropower resources
Simplified Procedures
Diversified & Expanding export markets including EU
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