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Projects

Summary of proposed guarantee

Summaries of proposed guarantees are provided prior to Board consideration and before final contract signing, and they are therefore subject to change. Project briefs are disclosed after Board consideration and contract signing and reflect the terms of the project at the time of contract signature. Environmental and Social Review Summaries are provided for projects assigned an Environmental Assessment Category of A or B.

 

Project name
Adjaristsqali Hydro Project
Project ID
12300
Fiscal year
2014
Status
Proposed
Guarantee holder
Tata Power International Pte. Ltd.
Investor country
Singapore
Host country
Georgia
Environmental category
A
Sector
Power
Date SPG disclosed
April 10, 2014
Projected Board date
June 12, 2014
Gross exposure
 $64.0 million
Project type
Non-SIP
Strategic priority area
South-South
IDA
Complex Project

Project description

This summary covers an equity investment by Tata Power International Pte. Ltd. of Singapore in the Adjaristsqali Hydro Project in Georgia. The investor has applied for a MIGA guarantee of $64 million for a period of up to 15 years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.

The project involves the construction and operation of the 184 megawatt Shuakhevi hydropower project, consisting of the 178 MW Shuakhevi plant and the six megawatt Skhalta plant. It is part of the Adjaristsqali cascade of four run-of-the-river hydropower plants with a total planned installed capacity of 400 megawatts. The International Finance Corporation (IFC), the European Bank for Reconstruction and Development, and the Asian Development Bank are expected to provide debt financing for the project.

The project will export power to Turkey through the 400 kV Akhalskhe-Borcka cross-border transmission line for nine months of the year, and sell domestically for three consecutive winter months for the first 10 years of operations. In order to connect to the state grid, a 220kV transmission line from the power station to the national grid is being built with financing from the World Bank.

Environmental Categorization

The project is a category A under MIGA’s Policy on Environmental and Social Sustainability. Click here to view the Environmental and Social Review Summary prepared by the IFC for their investment in the project and here for the World Bank’s disclosure.

Development Impact

With the support of the World Bank, the government of Georgia is pursuing two strategic objectives: ensuring continued reliable domestic energy supply for firms and homes and bolstering electricity production from hydropower plants to expand the regional electricity trade. The World Bank has helped extensively in developing market rules, network infrastructure, and financial solutions to leverage private investment in support of Georgia’s energy objectives. This project is expected to have a positive demonstration effect on other potential private investors into Georgia’s hydropower sector. The country has a large pipeline of hydro projects for which the Georgian government is actively seeking foreign participation.

MIGA’s proposed support for this project is aligned with the Agency’s priorities of supporting investments into countries eligible for concessional financing from the International Development Association and complex infrastructure projects. It is also aligned with the Agency’s priority of promoting South-South investments.

 

 
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