Representatives of Georgia’s energy sector anticipate that the government will continue reviewing ongoing energy initiatives and that additional projects will likely be canceled in the coming months.
By a recent government decision, the review of several dozen energy projects, totaling 1.7 GWT, has been suspended. These projects, which had been included in a decree issued by the Prime Minister on October 13, did not have formal memorandums of understanding signed between investors and the Ministry of Economy.
According to Tornike Bakhturidze, Executive Director of Infinite Energy, the first stage of suspensions primarily affected projects that investors themselves had already abandoned.
Speaking on TV-program “Business Course”, Bakhturidze explained that many of the projects under discussion lacked feasibility studies, and their cancellation represents a necessary and positive process for the sector.
“This decision was not a surprise to any company involved in the sector,” Bakhturidze noted. “It is no secret that the total capacity of projects submitted through direct negotiations and auctions reached about 17,000 MW from all sources, an unrealistic figure. A portion of these projects was not backed by any real study. Among the canceled ones, there are also those that investors had already withdrawn and had even requested the Ministry of Economy to cancel. Overall, this is a recovery process. We welcome the fact that future projects will be selected more rigorously, receive maximum support at all stages, and have their development accelerated as much as possible.”
Bakhturidze added that another wave of project cancellations is expected, as the government continues to assess their technical and financial viability.
“The main reasons for cancellation are that some projects were only hypothetical, missed deadlines, or had technical flaws, particularly the lack of grid connection rights,” he explained.
The 1.7-GWT group of suspended projects includes hydropower, solar, and wind power plants that had been proposed under the Direct Contract Agreement program, but for which no final investment agreements were signed.
