EBRD Delays Decision over Georgia’s Nenskra HPP Loan, Again

The European Bank for Reconstruction and Development (EBRD) has, for the fourth time, delayed discussions over financing Georgia’s largest yet Hydro Power Plant (HPP), Nenskra, in Svaneti.

The EBRD was to discuss the Nenskra HPP issue in April, then in September, and after delays on January 17, 2018, as the EBRD official website reads, the bank will now discuss the issue on January 31.

The exact reason why EBRD is delaying discussions over Nenskra HPP financing is not known, but as Georgian media reports, this might be related to the continued protests of Svaneti residents, who are against the construction, claiming if the HPP is built, it will result in the cutting of hundreds of hectares of forest in Svaneti, and will change the natural landscape of the western Georgian region, which is one of the most attractive tourist sites in Georgia. 

The implementation agreement package of Nenskra HPP was signed in early September 2015 by Georgia’s Partnership Fund, the Georgian government, Korean company K-Water, Commercial Operator of Electro-Energetic Systems, and JSC Georgia Electric System.

The HPP is expected to annually produce 1.2 billion kilowatts of electricity per hour. The Nenskra HPP construction will be based on a Build-Operate-Transfer (BOT) structure, according to which the investor is obliged to build the HPP, operate for 35 years, then transfer ownership of the HPP to the State.

The total cost of the Nenskra HPP project is over $1 billion, which is expected to play a crucial role in Georgia’s energy stability. Georgia is waiting for 70% of financing from the banks, including $214 million from EBRD.

By Thea Morrison