Georgia’s decision to remove intermediary companies from electricity imports is a logical step, but it is unlikely to reduce household electricity tariffs, energy expert Mikheil Odisharia told BMGTV. Prime Minister Irakli Kobakhidze said on October 7 that importing electricity directly from Azerbaijan and other countries would save the state several million lari annually. He later said electricity purchased from Azerbaijan would cost 0.2 US cents less than before.
According to Odisharia, intermediary traders can benefit a market when multiple buyers and sellers compete to offer better prices. However, Azerbaijan’s electricity exports are handled by a single state-owned supplier, while Georgia had only one intermediary in the import chain. This structure did not create meaningful competition, making the intermediary’s removal a reasonable decision. Odisharia noted that limited public information makes it difficult to establish why the companies were originally introduced in 2016.
The expert said the savings would have only a marginal effect on wholesale electricity prices because Azerbaijani imports account for only part of Georgia’s total imports, which are then combined with domestic generation in the balancing electricity pool. Household tariffs are set in advance by the Georgian National Energy and Water Supply Regulatory Commission (GNERC), meaning any wholesale price changes are unlikely to reach consumers directly. The savings would mainly benefit large electricity consumers and suppliers purchasing balancing electricity, particularly during winter.
Odisharia added that long-term tariff reductions are unlikely because modernising electricity networks and integrating new technologies require substantial investment. He argued that Georgia needs broader energy market reforms, including more transparent cross-border trading, stronger market mechanisms and greater competition. The removal of intermediaries shortens the procurement chain, but does not itself create a competitive electricity market.
