Georgia’s energy investment attractiveness could decline unless CFD tariffs are revised, Georgian Business Association Executive Director Levan Vepkhvadze told BMG. He said inflation and rising construction costs have made existing tariffs less relevant to current market conditions.
According to Vepkhvadze, the cost of building 1 MW of generation capacity has risen from around $1 million to $1.5 million. He said tariffs and other CFD conditions, including guaranteed purchase periods for hydropower projects, should be adjusted accordingly.
Vepkhvadze said specific tariff levels should be determined through competitive auctions rather than set publicly in advance. He added that the business community is awaiting the Energy Ministry’s position on the issue.
He also said generation restrictions in May-June create additional risks for investors and should be reflected in future auction conditions. The latest CFD auction set median tariffs at 6.5 US cents/kWh for hydropower, 6 cents for wind and 5.6 cents for solar projects.
