Georgia’s energy sector faces a serious institutional and legislative crisis, according to energy expert Murman Margvelashvili, who criticized the government for inconsistent reforms and “populist” tariff management. He stressed that energy policy should be based on analytical data and economic calculations rather than political considerations.
Margvelashvili noted that crucial reforms have been stalled for years, sending negative signals to investors. “We initiated the update of the renewable energy law, which hasn’t been completed; we started market reforms, which are also unfinished. There are many institutional obstacles that prevent significant improvements and send the wrong signal to investors,” he said.
He also criticized recent tariff decisions as short-term and politically motivated rather than focused on sectoral security. “The main priority should be analytical support and managing the sector based on data, analysis, forecasts, and safety considerations. Decisions should not be politically motivated, as we’ve seen with current tariffs. Leaving the energy sector to one-off decisions wastes opportunities. Political interference in tariffs is characteristic of underdeveloped, lagging countries. Artificially lowering electricity or gas prices via subsidies does not reduce costs but shifts them elsewhere,” Margvelashvili explained.
According to the expert, low tariffs benefit not only low-income households but also heavy consumers. “This isn’t support for the needy; it’s support for those who consume the most energy—heating pools, for example. If energy had its true price, it would help strengthen the market, attract investors, and support renewable energy development,” he said.
On December 29, the Georgian National Energy and Water Supply Regulatory Commission (GNERC) postponed electricity tariff increases, meaning rates did not rise on January 1 as previously announced. The regulator cited consultations with the government, requests from energy companies, and uncertain balance data as reasons for the delay. Following the decision, energy companies will also need to adjust their agreed investment obligations to prevent a “painful” tariff increase.
