The Institute for Development of Freedom of Information (IDFI) has investigated Russian capital accumulation over several sectors, in particular: electricity; oil and gas; communications; banking; mining and mineral waters; construction; tourism; and transportation. Based on these conclusions, the Russian business linkages of utmost concern are within the electricity sector, followed by the sectors of oil and gas,
communications, and mining and mineral waters.
Nevertheless, dependency on Russian capital is growing amidst the war in Ukraine, and due to the intensified influx of Russian migrants in Georgia. The section below briefly summarizes the main IDFI research findings relating to Russian business ownership in Georgia.
According to the IDFI, a significant position on the Georgian energy market is held by the Russian company Inter RAO. With its ownership of the Khramhesi 1 and Khramhesi 2 hydropower plants (HPPs)3, the company might have its control over significant part of Georgia’s total electricity
consumption. Inter RAO also holds a notable stake in Telasi JSC (Telmico from 2020) – the only electricity supplier for the 697 400 subscribers in the Georgian capital; in total, Tbilisi consumes 20% of the country’s overall electricity, amounting to 3 billion kWh (Institute for Development of Freedom of Information (IDFI).
A 75.11% stake of Telasi JSC is held by Silk Road Holding B.V., which is entirely owned by Inter RAO, which, in turn, is owned and controlled by Russian state companies (including Rosneftegaz, Inter RAO Capital, and Rosetti FGC UES). A large part of the remaining 24.53% Telasi shares are held by the Best Energy Group company, owned by the businessmen Khvicha Makatsaria; who in May 2022, acquired 100% of Veon Georgi (Beeline), a company that has been associated with Mikhail Fridman, the sanctioned Russian businessman. Moreover, Khramhesi 1 and Khramhesi 2 are both owned by Gardabani Holding B.V., which is also directly owned by Inter RAO.
There is another company related to Russian “Inter RAO”. An intermediary Lux Energy Trading LLC, formerly known as Inter RAO Georgia LLC, registered “as a participant in wholesale trade as an exporter, importer and wholesale supplier of electricity” (Transparency International Georgia, 2023). The company is involved in electricity trading, namely importing electricity to Georgia from Russia (Transparency International Georgia, 2023).
Russian linkages have moreover been traced to energy projects that are currently underway, those which are projected to generate in total 751 million kWh of electricity. Specifically, Mtkvari Energy LLC is constructing the Mtkvari HPP, with an estimated annual electricity production of 251 mln. kWh, while Dariali Energy JSC manages the Dariali HPP project in Kazbegi, with an annual electricity output of 500 mln. kWh. The Dariali HPP project further envisages connecting the power plant to the national grid via a 100-kW transmission line (Institute for Development of Freedom of Information (IDFI).
Notably, Mtkvari Energy is owned by Mtkvari Holding LLC, with GCF Partners LLC managing the company’s shares. GCF Partners equally act as a managing company for Georgia’s co-investment fund, and it is solely owned by Giorgi Bachiashvili, who holds dual Georgian and Russian
citizenship. Additionally, the current director of energy projects at Mtkvari Holding sits on the supervisory board of Georgian State Electricity System JSC, which is “the sole operator of Georgia’s electricity transmission system, responsible for transmitting and dispatching electricity to distribution companies and directly to consumers, sourced from hydro, thermal, and wind power plants (Institute for Development of Freedom of Information (IDFI).
Regarding Dariali Energy JSC, 44.27% of company shares are held by Energia LLC, of which 70% of shares are held by Russian citizen, Mevludi Bliadze, while 30% belongs to Feri LLC. Together, Mevludi Bliadze and Feri LLC own the Shildahesi HP station, which generated 0.1% of total
Georgian electricity production in 2021 (Institute for Development of Freedom of Information (IDFI).
Lastly, Pshavi Hydro LLC owns the small Skurdidi HPP, with a capacity of 1.33 megawatts. The company is controlled by two shareholders, Rauli Kurdadze (87%) and Zviad Gugava (13%), both of whom hold dual Russian and Georgian citizenship (Institute for Development of Freedom of Information (IDFI). Besides electricity supply, generation, and trade, Russian linkages can also be identified within other significant fields of the Georgian energy sector. Specifically, Sakrusenergo JSC, which owns and manages important power transmission lines (including those from which Georgia receives Russian electricity), is owned jointly by the Georgian state (50%) and the Russian Federal Grid Company of United Energy System (Institute for Development of Freedom of Information (IDFI).
Significantly, Sakrusenergo JSC already owns or has permission to build crucial transmission lines, such as the 500 KV HV electric transmission lines for Kavkasioni, Kartli 1, Kartli 2, Imereti, Imereti 2, Assureti, Stepantsminda-Mozdok, Mukhrani, Mukhrani Valley, and Marneuli-Airum; the Gardabani 330 KV HV electric transmission line; and the Adjara 220 KV HV transmission line.
Through these lines, Sakrusenergo operates both internal systems and it connects Georgia with Russia, Azerbaijan, and with Turkey (Institute for Development of Freedom of Information (IDFI).
An assessment of Russian business linkages in the Georgian electricity sector raises particular concerns regarding its secure and resilient operations, especially in consideration of the essential service it provides. Such concerns are further heightened given that Russian business ownership in the sector is present simultaneously within different streams of electricity generation, supply, transmission, and trade.
