OREANDA-NEWS. November 10, 2014. The EBRD is stepping up its support for the development of renewable energy in Georgia by financing the construction of a new hydroelectric power plant (HPP) in Dariali on the Tergi river, in north-eastern Georgia.   

The Bank is arranging a USD 80 million syndicated loan to JSC Dariali Energy for the development, construction and operation of one of the few privately owned greenfield hydropower plants in Georgia.

This is the first limited recourse hydropower project in Georgia to be financed under an A/B long-term loan, syndication structure, where the EBRD will provide an “A” loan of USD 40 million while the “B” tranche will be split into a USD 30 million tranche provided by the Dutch development bank FMO and a USD 10 million tranche taken by the Green for Growth Fund, Southeast Europe (GGF).

JSC Dariali Energy will complete the construction and installation of the power generation plant. With an installed capacity of 108 MW and an expected annual electricity output of 510 GWh, the plant will play a key role in the development of Georgia’s hydropower resources. This will help to reduce carbon-based power generation and also cut dependence on imported fuels in the winter months.

The generation-load imbalance within the Georgian power system is significant as two-thirds of Georgia’s energy resources are located in north-west Georgia, while two-thirds of domestic demand stems from the east, leading to network instabilities at peak hours. Due to its location in the east, Dariali HPP will enhance the stability of the transmission network.

JSC Dariali Energy is a joint-venture between four entities: PERI Ltd and Energy LLC - private Georgian companies; Robbins Company – a US-registered firm dedicated to performing sophisticated ground excavations; as well as the Georgian Energy Development Fund (GEDF), a state-owned company established by the government with the primary purpose of facilitating investments in and development of the country’s renewable energy sector.

Dariali will be built in full accordance with the EU’s environmental requirements and the sustainability guidelines of the international hydropower association. The investment is also the first energy project in Georgia to deliver carbon-neutral construction by including reforestation after the completion of the construction works.  

Nandita Parshad, EBRD Director for Power and Energy said: “We are delighted to deepen our support for Georgia’s power sector. This investment demonstrates our commitment to invest in renewable sources of energy to improve Georgia’s energy security and mitigate the impact of climate change. The project will be supplying electricity to both the Georgian and Turkish electricity networks utilising the Black Sea Transmission line financed by the Bank in 2010 and commissioned in 2014.”

“Georgia is estimated to have some of the highest untapped hydropower resources in the world, with less than 20 per cent of this potential capacity presently developed. The investment supports efforts to develop this potential and lead the country towards a greener policy as well as take advantage of its strategic location of linking the South Caucasus with Europe and Turkey. This will help to strengthen not only national but also regional energy security,” said Bruno Balvanera, EBRD Director for Caucasus, Moldova and Belarus.

The EBRD is a leader in sustainable energy investment. Under its Sustainable Energy Initiative, launched in 2006, the Bank has financed around EUR13 billion in about 756 projects yielding 62 million tonnes of CO2 reductions as of end-2013.