02.Jun .2021 18:00

No Way Investors Invest in Energy Without PPAs

No Way Investors Invest in Energy Without PPAs
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Giorgi Abramishvili, Executive Director of the Renewable Energy Development Association (GREDA), says that one of the reasons for the slowdown in the construction of new hydropower plants in Georgia is the government's moratorium on PPAs (Power Purchase Agreement).

As Abramishvili notes the representatives of the energy sector have repeatedly communicated with the government regarding the resumption of the issuance of PPAs, but the state refuses to sign new agreements.

GREDA CEO says that foreign investors will not invest in Georgia's energy sector without the financial support of PPAs.

"The issue of guaranteed purchase is very important, it is a mechanism by which the state offered minimal guarantees to investors. This is not an invention of a new bicycle. In general, it is a proven practice all over the world to sign PPA contracts. In Turkey, this tariff amounts to 7.4 cents and goes up to 9.1 cents; it is 11.5 euro cents in Ukraine, while the tariff goes up to 40 cents in Japan.

We have raised the issue of guaranteed procurement with the state and we will definitely continue this conversation. The Ministry of Finance had a strong negative sign due to fiscal risks. We offered the state to give guaranteed purchase agreements to the limited number of companies. Otherwise, direct investments in energy sector will not continue in Georgia,” said Giorgi Abramishvili.