Economy
Posted: 3 weeks ago

The Government Expects $3 billion Investment in Energy Sector over the Next Three Years

Georgia has had a 10.2% economic growth over nine months, unprecedented in all of Europe, Georgian Prime Minister Irakli Garibashvili stated at today’s Government meeting.

According to the Head of Government, the country is expected to have a double-digit economic growth at the end of this year.

“I would like to address the issue of economic growth. As you know, against the backdrop of ongoing geopolitical challenges and tensions, Georgia has had a 10.2% economic growth over nine months, which is unprecedented in all of Europe. Also, I would like to say that export is up 40% to make up 37.4% over the past nine months. The revenues from export constitute 4 billion USD.

Tourism recovery is in full swing. Compared to 2019, tourism has recovered by 97.5%. The relevant revenues have reached 2.5 billion USD.

I do not want to make any forecasts, but we expect to maintain the current high economic growth, to reach a double-digit economic growth at the end of this year,” the Prime Minister said.

Of course, Georgia has considerable resources, especially hydro resources, and these resources require maximally prudent use and utilization. This is our key priority, and it is in this direction that we have been working actively over the past few months.", noted Georgian Prime Minister Irakli Garibashvili at today’s Government meeting.

According to the Head of Government, it is plausible to assert that, over the next three years, at least 3 billion USD is expected to be invested in the energy sector, provided that all listed projects are signed and set in motion.

“Another issue I would like to discuss concerns our promise. As you know, the ongoing war in Ukraine and crisis have once again brought to the fore the difficulties facing countries and states. This is energy security and energy independence. Of course, Georgia has considerable resources, especially hydro resources, and these resources require maximally prudent use and utilization. This is our key priority, and it is in this direction that we have been working actively over the past few months. We have had consultations with the International Monetary Fund, among others, and it is safe to state that the scheme, which we are about to present, is already coordinated with them. It will become official in a matter of days. In other words, here is what we mean by this new offer and scheme. As you know, the so-called guaranteed procurement scheme has been put on hold for several years, and memoranda have been issued for HPPs with a combined capacity of about 800 megawatts. However, although some have even started constructing, these contracts have not been signed yet. This is one issue. The other issue is that the fate of new projects has also been obscure, and investors in general needed more clarity. Consequently, the new scheme is as follows: the state’s support for energy projects for power plants in the course of 15 years after commissioning based on contracts for difference (CDF). This is what the scheme that we will offer to investors stands for. This new support scheme envisages support, through auctioning, for power plants with a combined capacity of 1,500 megawatts over the next three years. This, of course, does not apply to the 800 megawatts I mentioned earlier, nor does it apply to such large projects as Namakhvani, Nenskra, and Khudoni.

“In other words, by supporting the construction of this 1,500-megawatt capacity alone, we expect 2.2 billion USD in investments. Add to that 800-megawatt projects and the large projects that we will additionally discuss later. Thus, it is plausible to assert that, over the next three years, at least 3 billion USD is expected to be invested in the energy sector, provided that all listed projects are signed and set in motion. It is a very important decision because, on one hand, we are bringing in clarity and, on the other, we announce it as our key priority, and investors will enjoy support, of course. Also, I would like to state that, given our double-digit economic growth-we have been increasing it by 10% over the past two years-generation is lagging behind growth. Naturally, consumption is growing, and all this will bring about difficulties in the course of a few years, unless we start building new HPPs. This is extremely important, dear friends, and I would like to say that our main task must be the rational, prudent use of the country’s resources, especially since this is renewable energy, ecologically clean, and it calls for greater support, of course,” the Prime Minister stated.

The last issue I would like to report on to the public is the program for supporting hazelnut production. As you know, many of our citizens are engaged in this sector, hazelnut production. Unfortunately, the negative effect of stink bugs is still present. If I am not mistaken, stink bugs first appeared in 2017, and this caused a major decline in hazelnut production. As you know, this year’s harvest was not too good either. The quality has declined drastically, with the addition of a dropping demand and prices due to the ongoing economic crisis in the world. In light of all this, we therefore have decided to encourage and support farmers and individuals involved in this sector-to assist them maximally.” 

According to the Prime Minister, the program envisages supporting primary hazelnut production by subsidizing equipment necessary to cultivate/grow hazelnuts. The Head of Government also spoke about this year’s vintage, emphasizing that about 250 million Gel has entered the Kakheti region.

“This program envisages supporting primary hazelnut production by subsidizing equipment necessary to cultivate/grow hazelnuts. To this end, at the initial stage, we will allocate 20 million GEL. And Mister Shamugia will report on this in detail. We must provide maximal assistance to everyone involved in this sector, especially in Samegrelo where many people are engaged in this sector and require maximal support, the way we have supported this year’s vintage, grape production, and so on. I would like to say that the vintage has been a success, and about 250 million Gel has entered the Kakheti region. I would like to thank Mister Otar Shamugia-who has conducted the vintage successfully-and every institution engaged in this process."