Economy Ministry: four economic studies show benefits of Namakhvani HPP
In 2007-2019, four different independent consulting companies conducted feasibility studies for the Namakhvani HPP project. Photo: Ipress.
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Four major economic studies have been published by the Georgian Ministry of Economy which attest to the financial and economic viability of the Namakhvani HPP planned in western Georgia.
The release of the reports comes following large protests against the construction of the power plant.
The Namakhvani HPP project is one of the best studied projects in the energy sector of Georgia. In 2007-2019, four different independent consulting companies conducted feasibility studies for the Namakhvani HPP project. The main objectives of the three studies were to assess the energy sector and develop future plans, including the feasibility of building new generation facilities based on various economic methodologies, and the fourth study is to assess the social and economic benefits of the project", says the ministry.
Below is short information about the four studies:
- In December 2007, the World Bank funded the Strategic Environmental Assessment of Georgia's Energy System Development. The study was conducted by the Serbian-Italian Group (SEEC), which reviewed a 15-year planning period. In all the considered options, Namakhvani HPP project was considered to be the best project for connection to the Georgian power system.
- According to the social and economic assessment report prepared by the Georgian company Gamma Consulting in 2015, the benefits of the project significantly exceed the damage that the project might cause.
- In August 2018, McKinsey & Company examined Georgia’s energy strategy, describing the profile of electricity consumption and all the factors that affect the growth of consumption. According to the document, the average annual growth by 2030 is 4.6% and will reach 21.4 terawatts (for reference in 2020 consumption was 12.4 TWh). In addition, the document includes an overview of the electricity markets of neighboring countries and, most importantly, the study provides ways to eliminate the expected deficit, which involves the construction of new power plants. Namakhvani HPP is referred to in this study as an economically viable energy facility. According to the consultant, the Levelized Cost of Energy (LCOE) of Namakhvani HPP fully meets international standards.
- The analysis of the Namakhvani HPP project in January 2019 was also presented in the Georgian Electricity Market Assessment Report prepared by the international consulting company Nera, commissioned by the European Bank for Reconstruction and Development. Namakhvani HPP is one of the projects whose economic and energy characteristics allow the project to be built according to the least-cost methodology.
Many activists and locals protest the construction of the HPP in the region, claiming that the construction was launched without sufficient research and thorough consideration of risks, including immediate security risks due to active seismic activity.
The protesters say that in addition to the environmental threat, the government has 'relinquished state interests' in the contract with Enka.
Police detained Irakli Mukbaniani, a protester against the construction of the Namakhvani hydro power plant (HPP) using disproportionate force, witnesses say. Mukbaniani was detained in the village of Sakulia in western Georgian region of Imereti for assaulting a police officer during a demonstration in Gumati village a couple of days ago.
Eight individuals protesting against the construction of the Namakhvani hydro power plant (HPP) in western Georgia have been detained after a clash between protesters and police in the village of Gumati last night, announces the Ministry of Internal Affairs of Georgia.
Protesters against the construction of the Namakhvani hydro power plant (HPP) in western Georgia have stopped their protest rally in the capital city of Tbilisi and say that they will continue the fight directly at the construction site of Namakhvani HPP.
It has been two hours since the protesters against the construction of the Namakhvani hydropower plant in western Georgia have been marching along the central streets of the capital city of Tbilisi. From the First Republic Square protesters marched to Freedom Square and blocked Rustaveli Avenue, later returning to First Republic Square where they will continue their demonstration.
Georgian Economy Minister Natia Turnava has announced that mediation on the construction of the Namakhvani hydro power plant (HPP) that is planned to be built in western Georgia will be held in the coming days under the leadership of the European Union.
Georgian authorities are negotiating with Enka, the Turkish contractor company for the contested Namakhvani hydro power plant in western Georgia, to improve the terms of the existing contract, including the unconditional transfer of land, water and other natural resources on a 99-year lease to Enka.
What have the gov’t, civil society, EU Energy Union agreed to?
Civil society and the government of Georgia have held the first meeting of negotiations concerning the disputed Namakhvani hydro power project on the Rioni river in western Georgia. The meeting was mediated by the EU Energy Union Dispute Resolution and Negotiation Center.
French state-owned company EDF has presented to the Georgian State Electrosystem (GSE) a hydro power ‘roadmap’ that analyses the potential of hydroelectricity power from 2020 to 2035, announces the Embassy of France to Georgia.
Turkish contractor company Enka, who had intended to construct the Namakhvani hydro power plant on the Rioni river in western Georgia, has notified the government of Georgia that it is terminating the $800 million project in the country. The statement published by the company reads that the reason for the cancellation of the contract with the Georgian government is the ‘violation of the terms of the contract and force majeure’.
'We will continue a dialogue with the investor over the next month'
Georgian Prime Minister Irakli Garibashvili has stated that over the next month the government will continue communication with Enka, the Turkish contractor company for the Namakhvani hydro power plant to be built on the Rioni river in western Georgia, but who terminated the contract last week.