Georgia has made great strides forward in modernising its energy sector and creating outstanding investment opportunities. Alexandre Khetaguri, Minister of Energy, explains that the government has privatised the sector and unbundled transmission and distribution. “We already have 47 privately owned power plants and three private distributors. In a couple of years we plan to make an IPO of Georgian State Electricity,” he says.
Georgia’s energy sector is a very attractive investment choice. The country’s hydropower potential is ranked number two in Europe but only around 18% of it is currently being utilized. In addition, thanks to recent investment in the national energy transmission grid, energy producers can count on a greatly expanded market.
Access to markets in Europe and beyond
A new 1,000 MW high voltage transmission line being built between Georgia and Turkey will include links to Bulgaria and Greece and from there to other markets. Another project will allow Georgia to transmit energy to Middle Eastern markets by May 2012, while a new link is being built between Georgia and Azerbaijan. The government is also considering doubling the current 500 MW capacity on its transmission link to Russia. As the minister points out, “Any new hydropower plant built in Georgia will have access to the Turkish market and beyond.”
Georgia, a hub for gas and oil transport between Eastern and Western Europe thanks to the many pipelines crossing the country, has diversified its gas and oil infrastructure and does not have to rely solely on Russia for its gas supplies. A recent regional initiative aims to transport gas from Azerbaijan through Georgia to the Black Sea.
The Ministry of Energy welcomes new foreign investment in Georgia’s energy sector. Alexandre Khetaguri says, “We recently signed a memorandum of understanding for building around 16 hydropower plants with a total capacity of around 2,300 MW, for around €2.41 billion to 2.76 billion in FDI.”
Georgia offers low taxes and a liberalised investment regime, and the World Bank ranks the country number one in Eastern Europe in the ease of doing business. The minister concludes, “Our long term goal is to focus on 100% green energy. Investors in Georgia’s energy sector can be sure to make a profit.”