In December 2024, Georgia lost an international arbitration dispute against ENKA Renewables, a Turkish engineering and energy company, over the terminated Namakhvan hydroelectric power plant project. Initially, ENKA announced compensation of USD 383.2 million, but recent enforcement proceedings in the U.S. District Court for the District of Columbia reveal that the amount now exceeds USD 450 million.
The arbitration award requires Georgia to pay ENKA:
- USD 297 million with daily compounded interest at the U.S. Federal Reserve’s Secured Overnight Funding Rate (SOFR) plus 4% (currently totaling approximately 8.5%).
- USD 52.4 million as a tax gross-up, if ENKA pays Georgian tax authorities, also accruing interest at SOFR plus 4%.
- USD 11.3 million, EUR 307,645, and GBP 34,862 with interest at the same rate from November 27, 2024.
These figures include penalties that continue to accrue due to delayed payment.
The dispute arose in October 2021 after Georgia terminated the investment agreement citing force majeure, halting the USD 800 million Namakhvan HPP project, which had already seen USD 100 million invested in preliminary works. The government’s decision, announced by then-Prime Minister Irakli Gharibashvili in June 2021 to cancel the project “in its current form,” was deemed by the arbitration tribunal to violate the investment agreement, granting ENKA grounds to pursue compensation.
ENKA was constructing a 433-megawatt hydroelectric cascade in Tskaltubo municipality, originally planned to begin operation in 2025-2026.
Attempts to obtain an official comment from Georgia’s Ministry of Justice on February 10 have yet to receive a response.
