The document summarizes hydropower potential and investment opportunities in Georgia. It notes that Georgia has vast untapped hydro resources and an easy regulatory framework for hydropower projects. The country aims to utilize its hydro potential to become a regional energy hub and export electricity to neighboring countries. The Ministry of Energy and Natural Resources of Georgia invites investors to develop numerous hydropower plant projects ranging from small to large scale.

1. Ministry of Energy and
Natural Resources of Georgia
Hydropower Potential and Investment
Opportunities in Georgia

2. INTRODUCTION
Economy International Recognition
• Open and dynamically growing • World’s Top Reformer country
economy according to Ease of Doing
• Minimum bureaucracy and liberal Business (WB/IFC)
regulations • Government’s strong
• Diversified economic growth commitment for further reforming
Regional Energy Hub
• Reliable transit country
• Net electricity exporter to all four
neighboring countries
• Rapidly expandable energy
markets
• Construction of additional
electricity export infrastructure
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3. ELECTRICITY BALANCE
Seasonal Asymmetry of Generation and
Current Projected Consumption
Winter Summer
15%
LOW
LOW
100%
HIGH
HIGH
85%
Generation
Thermal & Import
Hydro Consumption
TW/h 2004 2005 2006 2007 2008 2009 2010 2011
Generation 6.9 7.1 7.6 8.3 8.6 8.9 10.1 10.1
Hydro 6.0 6.0 5.4 6.9 7.3 7.7 9.3 7.9
Thermal 0.9 1.0 2.2 1.5 1.3 1.2 0.8 2.2
Net Export -1.2 -1.3 -0.7 0.2 0.3 0.5 1.3 0.5
Consumption 8.1 8.3 8.3 8.1 8.3 7.9 8.8 9.6
Distribution 5.7 5.9 5.9 5.9 6.0 5.9 6.4 7.4
Direct Customers 1.7 1.9 2.0 2.0 2.1 1.7 2.1 1.8
Transmission Losses 0.7 0.5 0.4 0.2 0.2 0.3 0.3 0.4
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4. EXISTING HYDRO POTENTIAL
 Vast untapped hydro resources
 Top country in water resources per capita
 In total 26,000 rivers
 300 rivers in terms of energy production
 Only 18% of total hydro potential is utilized
 HPP Greenfield potential of 20 TWh
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5. EASY REGULATORY FRAMEWORK
 Greenfield projects based on Build-Own-Operate (B-O-O)
principle
 Totally deregulated newly built HPPs - investor is free to choose
the market and the price
 No special fee for the grid connection
 Free third-party access to the grid
 No license required for export and no tariff set
 Guaranteed purchase offered by GoG for three months
 Priority access for transmission to Turkey (Long term contract
with TSO) with new HPPs
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6. PERMITS AND LICENSES
Construction Generation
Permit License
Ministry of Economy GNEWRC
& Sustainable
Development
Above 13MW*
Issued within 60
working days Issued within 30
working days
* HPPs with less than 13 MW do not require Generation License
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7. EXPORT OPPORTUNITIES
 Georgia’s hydro potential can be used to offset part of the
growing demand of neighboring as well as of European
countries
 Over the last three decades Turkish demand for electricity has
grown at an average rate of 7.6% per annum
 By 2013 Turkey is expected to be a net importer of electricity
 The peak demand season (summer) in many of neighboring
countries occurs in Georgia’s peak supply season – when river
flows are at their highest
 Increased profits from carbon credits sales
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8. EXPORT ORIENTED PROJECTS
 40 HPP on-going Projects
• Total installed capacity of 2506 MW and annual generation up to 10.2 TWH
• Projected investment USD 4.1 bln.
• Construction works to be finished in 2014-2017
 Major companies operating in
Georgia
• Anadolu (Turkey)
• Peri (Georgia)
• Ağaoğlu (Turkey)
• Trans Electrica Ltd.(India)
• Energo Pro (Czech)
• Clean Energy Group (Norway)
• KGM (Georgia)
 10 new HPP constructions ongoing
• Rusmetal (Georgia); and etc
 15 new HPP constructions will be launched in 2012
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9. INFRASTRUCTURE WITH NEIGHBORING
COUNTRIES
 Georgian power grid is connected
to the grids of all of neighboring
countries
 Construction of new high voltage
500/400 KV line to Turkey will be
finished by 2012
 Construction of additional
interconnection with Turkey is
under negotiation
Existing Transmission lines
• Russia 1155 MW
Existing & Planned Transmission Lines
• Turkey 2000 MW
• Armenia 835 MW
• Azerbaijan 1150 MW
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10. INVESTMENT OPPORTUNITIES
 Currently, 41 HPP projects (each up to 100 MW) are
offered to potential investors
 Investor is free to choose and apply for construction of
up to 7 potential HPPs from the list
 Investor is not limited with the list
 Terms and conditions of EOI for HPPs more than 100
MW capacity is subject of Government’s resolution
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11. HPPs PRE FEASIBILITY STUDY INCLUDES
Financials/Ratios Technical Projection
Income Statement HPPs Technical Data
Cash Flow
Hydrological Data
Balance Sheet
Topographic
NPV Maps
IRR Other Necessary Data
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12. LARGE-SIZE HYDRO PROJECT
Namakhvani HPP (Cascade Type)
 Installed capacity – 450 MW;
 Av. Annual Generation – 1,6 TWh;
 Estimated investment cost – USD 800 mln.
Namakhva
Tvishi Joneti
ni
Installed capacity 100 MW 250 MW 100 MW
Annual average
386 GWh 941 GWh 354 GWh
generation
Height of dam 56.5 m 111.0 m 31.0 m
Concrete
Type of dam CVC gravity Rock fill
arch
Type of diversion Tunnel Tunnel Channel
Gated over Tunnel, In river,
Type of spillway
Expression of interests on: dam gated gated
Maximal water head 36.3 m 83.0 m 32.0 m
Number of turbines 2 units 3 units 2 units
A. Consultancy services and, Type of turbines Kaplan Francis Kaplan
2 x 110, 1 x 2 x 50
B. EPC contractor Power of units [MW] 2 x 50
30 MW
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13. INVESTMENT SUPPORTING FACTORS
 Liberal Tax Legislation
• Only 6 taxes effective in Georgia
• Low and flat tax rates
• Internationally accepted methods and practices
• Minimum bureaucracy
• Light administrative burden to taxpayers
 Georgia has in force 36 OECD model Double Taxation
Avoidance Treaties
 List of treaties is expanding rapidly, additional 9 Treaties are
in line for official signature or ratification
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14. INVETSMENT ADVANTEGES
 Deregulated power sector with very impressive turnaround since
2004
 Distribution companies privatized and operating at high profit
 Significant existing private investment in generation assets
 GoG's strong support and commitment aimed at developing
hydropower resources
 Simplified Procedures
 Diversified & Expanding export markets including EU
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15. Thank You!
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