Overview of Georgia’s energy sector in 2021

Georgia Materials 30 December 2021 18:04 (UTC +04:00)
Overview of Georgia’s energy sector in 2021

BAKU, Azerbaijan, Dec. 30

By Maryana Akhmedova – Trend:

The Government of Georgia has been developing the energy sector throughout 2021 by launching a number of projects and holding talks with international organizations, aiming for successful cooperation.

The renewable energy sector development was one of the issues on top of the agenda for Georgia in 2021.

Japanese “Kansai Electric Power” and “Itochu Corporation” – Georgia held fruitful talks with these companies for promoting cooperation with Japan in various sectors, such as hydropower, production of "green hydrogen", as well as in transport sector.

Japanese TEPCO Power Grid – Georgia discussed the possible business expansion with the company. Japanese company's expansion in Georgia's energy sector and possible investment in other energy facilities were considered. TEPCO Power Grid already owns a 31.4 percent share in Dariali hydropower plant in Georgia. This is the company's only second investment outside of Japan, which shows the interest of the Japanese company in Georgia and the region in general.

UAE Masdar – company representatives discussed the prospects of Masdar’s investments in Georgia’s solar and wind energy with the country's representatives.

Reforms and programs

Georgia's Energy Sector Reform Program (ongoing) – Georgia’s Ministry of Economy and Sustainable Development in cooperation with German Development Bank (KfW) and the EU has launched a technical cooperation program to support energy sector reform. The 4-year program aims to strengthen Georgia’s energy security in accordance with the EU practices, and to improve the energy efficiency of infrastructure, which will eventually result in additional private investments, renewable energy development and greenhouse gas emissions reduction. The total cost of the program is 8.44 million euros.

Study of green hydrogen potential in co-op with German Development Bank (ongoing) – the first pilot project on the study of green hydrogen potential will be implemented in Georgia, which will ensure the development of clean and renewable energy in the country. Georgian Ministry of Economy and Sustainable Development and the German Development Bank (KfW) signed a declaration of intent on November 5. The implementation of this project will provide benefits to the economy and, consequently, will help attract investment to the country to develop clean and renewable energy.

Georgia Capital PLC (GCAP) investment plans (ongoing) – the company's investment plans over the next 5 years also include the renewable energy sector. Out of $50 million of projected investments, $1.1 million have been allocated for the development of renewable energy pipeline hydropower plants (Darchi and Zoti) and wind power plants in 2021.

Energy Network Improvement Program (ongoing) – an extensive investment program for Georgia’s transmission infrastructure. The overall investment is 234 million euros, backed by the EBRD and the German Development Bank KfW, including 9.9 million euros in grant from the EU Neighborhood Investment Platform (NIP). Meanwhile, Georgian State Electrosystem JSC is responsible for the implementation of the individual sub-projects, with a technical assistance from international consultants. The KfW is additionally preparing a supplementary program with the Georgian government, comprising a loan of up to 100 million euros. The project is ongoing from 2017 and should be finished by 2022.

Georgian Energy Development Fund (ongoing) – the fund has been carrying out research for construction of solar power plants in different parts of the country. According to the fund, it cooperates with several international banks and donor organizations for this purpose. The main mission of the fund is to explore Georgia's potential for renewable resources and identify the most attractive projects. The first project was "Udabno Solar Power Plant", however, the fund continues to work with several international banks, donor organizations to carry out new projects in the nearby area of Rustavi, Gardabni, Marneuli, Sagarejo.

EU4Energy Governance Project Phase II (ongoing) – the program aims to foster the clean energy transition and decarbonization in Georgia. The main focus is on promoting energy sector reform and improving energy efficiency and the introduction of renewable energy sources. The project is ongoing from 2021 and should be finished by 2024.

USAID Securing Georgia’s Energy Future Program (ongoing) – the 5-year program aims to support policy reforms and private sector investments to assist Georgia in upgrading its energy infrastructure, as well as to encourage investment in new, climate-friendly sources of energy production, including wind and solar. Funded by the USAID, the program is to be implemented by the Deloitte Consulting LLP.

Solar power station by Lithuanian Saules Graza JSC (completed) – The aim of the project is to promote the development of the use of solar electricity and the introduction of new technologies. The project was co-financed by the Georgian Ministry of Internal Affairs and the Ministry of Environment of Lithuania. Solar panels of the station will reduce the expenditure for the electricity by 23 percent per year, taking into consideration the current costs.

Energy projects backed by Bank of Georgia in 2021

Solar panel power plant for Kaya company

The Bank of Georgia, together with the “Produce in Georgia” state program, allocated financial resources to the “Kaya” company for the installation of a solar panel power plant. The cost of the project amounted to $59,870, which was fully financed by the Bank. After the installation of solar panels, the company will be able to generate about 150,000 kWh of power with a 110 kW power plant, which, due to increased electricity tariffs, enables the company to save financial resources and use them for future product development.

Solar power plant for Metekhi Ceramics

Bank of Georgia has provided funding to the Georgia’s Metekhi Ceramics in the amount of $679,611 for the construction of a solar power plant to reduce the energy costs. The total cost of the project is $841,423. After the construction, the company will be able to generate 1.5 megawatts, saving up to $161,812 per year.


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