TBILISI — Georgia is hoping to tap into its abundance of high mountains and fast-flowing rivers to transform a country that once suffered from repeated blackouts into a regional hydro-electric superpower.
The ex-Soviet republic’s government believes the country’s untapped hydropower potential is so vast that it can become a key regional electricity provider, doubling its gross domestic product in a decade and providing 10,000 new jobs.
But sceptics are raising doubts about the government’s ambitious plans, warning that attracting the $6 billion in needed investment will be difficult for a country that last year saw foreign direct investments drop by 51 per cent.
“Georgia has already had a great success in overcoming an energy crisis and becoming a net energy exporter,” the country’s deputy energy minister, Mariam Valishvili, said in an interview.
“In 10 years Georgia will be a regional leader in hydro energy export,” she said.
Wracked by economic chaos after gaining its independence with the 1991 collapse of the Soviet Union, Georgia suffered from severe energy shortages in the 1990s and early 2000s.
After coming to power in the 2003 pro-Western Rose Revolution, President Mikheil Saakashvili made energy sector reform a key domestic policy and in recent years the country has enjoyed stable supplies and even begun to export about one billion kilowatt-hours per year.
Valishvili said Georgia is now hoping to build up the capacity to export 10 to 15 times that much electricity, mainly to neighbouring Turkey.
A few key steps have already been taken, in particular the launch last year of construction of a new high-voltage transmission line that will allow Georgia to export 10 times more power to Turkey. The $380 million project is being financed by foreign investment banks and the transmission line is expected to come online in 2012.
Once linked to the Turkish power grid, Georgia will be able to export electricity not only to Turkey, but also to markets in eastern Europe, Syria and Iraq.
The government last year also signed a $1 billion deal with a South Korean-Turkish consortium to build three enormous hydropower plants on the Rioni river at Namakhvani in the western Imereti region. Construction is due to begin in 2011 and take six years to complete.
In total, five hydropower plants are already under construction and contracts have been signed to build 16 other plants.
The European Bank for Reconstruction and Development (EBRD), which is helping to finance the new transmission line, said the country’s electricity export plans are realistic.
“Georgia has the potential to be a regional champion for hydro energy production,” the EBRD’s senior banker for power and energy, Laurent Chabrier, said in a statement.
Georgia’s “location at the crossroads between Turkey and the Caucasus positions it very well for selling this energy to rapidly expanding markets,” he said.
