05.Apr .2022 14:00

Gov’t To Present A New Project To Support The Construction Of HPP – Minister

Gov’t To Present A New Project To Support The Construction Of HPP – Minister
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Economy Minister Levan Davitashvili declares that the Georgian government will present a new model to encourage the construction of new HPPs in the energy sector. It is not yet known, whether it will be an alternative to previously abolished PPA tariffs.

"The Prime Minister spoke about the need to create new facilities in the generation today. We cannot announce the specific terms, but we have an outline and works are conducted between the government economic team. When we talk about reform and new initiatives, since we started the new IMF program, we also have the terms of the agreement with international partners. So, we will have discussions with international experts and the economic team. Next week we are planning to do this, unfortunately a lot of time has been lost already. Generated electricity does not meet the increased consumption and we must eliminate this. The ultimate goal is for Georgia to be an exporter of electricity, including mainly renewable energy.

We have gone through some outlines with the European Energy Community and the major energy reforms must be in line with the positions that Europe has.

We will need some days to announce the new initiatives that the Prime Minister is talking about,” said Levan Davitashvili.

The government is considering a change in the energy incentive mechanism for investors. As the current financing model Feed-in-Premium tariff, does not work, because European financial institutions refuse to finance new hydropower plants in Georgia under this tariff policy.

The government is considering to restore PPA (Power Purchase Agreements) tariffs, which provides guaranteed purchase of electricity. Under this agreement, the investor receives revenue of 6 cents per kilowatt-hour of electricity. The state has restricted the signing of Power Purchase Agreements with investors in energy projects from 2017.