On April 9, 2015, MIGA issued a guarantee of $63 million covering an equity investment by Tata Power International Pte. Ltd. of Singapore in the Adjaristsqali Hydro Project in Georgia. The coverage is 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 187 megawatt Shuakhevi hydropower project, consisting of the 178 MW Shuakhevi plant and the nine megawatt Skhalta plant. It is part of the Adjaristsqali cascade of three 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 providing 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.
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 support for this project is aligned with the Agency’s priority of supporting transformational projects.