28.Jun .2021 12:30

Gov’t Is Considering Building of Khudoni HPP After Termination of The Contract With Investor

Gov’t Is Considering Building of Khudoni HPP After Termination of The Contract With Investor
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The State Procurement Agency reports, that the government is considering construction of the Khudoni HPP project.

The Ministry of Economy and Sustainable Development signed an agreement with the law firm Hogan Lovells in May 2020, which was instructed to prepare legal terms for the termination of the existing agreement with Khudoni HPP investor Trans Electrica BVI. This was a one-year contract and it expired in May 2021. As a result, the government extended the contract with the law firm until December this year.

According to the information published on the website of the State Procurement Agency, after the termination of the contract with the investor, the state is considering construction of the hydropower plant by itself.

The Georgian government signed the first memorandum with Trans Electrica BVI and Trans Electrica Georgia on the construction of a 702-megawatt power plant in Khudoni in 2011.

A number of changes have been made to the document since then. Under a renewed memorandum in 2015, after the construction of the power plant, the state undertook obligation on Power Purchase Agreement (PPA) for electricity generated by Khudoni. According to PPA agreement, tariff for per KWH was set at 10.5 US cents. However, project development is stalled.

Khudoni HPP is one of the largest energy projects in the country, with an investment value of $ 1 billion.