The collapse of the Namakhvani HPP project and Georgia’s arbitration dispute with Turkish company ENKA could have significant financial and reputational consequences, according to energy expert Archil Mamatelashvili. Speaking to BMG, he said the way the investment agreement was terminated damaged Georgia’s investment image and could make future investors more cautious about entering the energy sector.
Mamatelashvili also pointed to Georgia’s lack of large-scale energy storage and balancing capacity as a key challenge. As electricity consumption and renewable generation increase, periods of high production can lead to generation curtailments and electricity being spilled, while shortages require imports. He said solutions such as reservoir-based hydropower plants and batteries are needed to better balance the system and reduce reliance on imported electricity.
The expert also questioned whether projects of this scale could be financed through the state budget. He estimated the Namakhvani project at $800–850 million, arguing that such spending would place significant pressure on public finances. He said foreign investment can also generate wider economic benefits through capital inflows, tax revenues and increased economic activity.
The ENKA dispute began in 2021 after the government said Namakhvani would not proceed under the existing terms. A U.S. District Court for the District of Columbia ruled on September 11, 2026, allowing enforcement of the arbitration award against Georgia. The award included $297 million in principal compensation and up to $52.4 million in tax compensation, plus additional amounts and interest, bringing the total above $400 million with accrued interest. Georgia’s Justice Ministry has said it will appeal the ruling.
