changes in georgian energy sector
TRANSCRIPT
Hydropower Potential and Investment Opportunities in
Georgia
Ministry of Energy and Natural Resources of
Georgia
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INTRODUCTION
Economy• Open and dynamically
growing economy• Minimum bureaucracy and
liberal regulations• Diversified economic growth
International Recognition• World’s Top Reformer country
according to Ease of Doing Business (WB/IFC)
• Government’s strong commitment for further reforming
Regional Energy Hub• Reliable transit country• Net electricity exporter to all
four neighboring countries• Rapidly expandable energy
markets• Construction of additional
electricity export infrastructure
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ELECTRICITY BALANCE
3
100%
Thermal & ImportHydro
Projected
Seasonal Asymmetry of Generation and Consumption
Winter Summer
Generation
Consumption
HIG
H
LO
W
LO
W
HIG
H
85%
15%
Current
TW/h 2004 2005 2006 2007 2008 2009 2010 2011 Generation 6.9 7.1 7.6 8.3 8.6 8.9 10.1 10.1 Hydro 6.0 6.0 5.4 6.9 7.3 7.7 9.3 7.9 Thermal 0.9 1.0 2.2 1.5 1.3 1.2 0.8 2.2 Net Export -1.2 -1.3 -0.7 0.2 0.3 0.5 1.3 0.5 Consumption 8.1 8.3 8.3 8.1 8.3 7.9 8.8 9.6 Distribution 5.7 5.9 5.9 5.9 6.0 5.9 6.4 7.4 Direct Customers 1.7 1.9 2.0 2.0 2.1 1.7 2.1 1.8 Transmission Losses 0.7 0.5 0.4 0.2 0.2 0.3 0.3 0.4
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EXISTING HYDRO POTENTIAL
Vast untapped hydro resources
Top country in water resources per
capita
In total 26,000 rivers
300 rivers in terms of energy
production
Only 18% of total hydro potential is
utilized
HPP Greenfield potential of 20 TWhwww.menr.gov.ge
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EASY REGULATORY FRAMEWORK
Greenfield projects based on Build-Own-Operate (B-O-O)
principle
Totally deregulated newly built HPPs - investor is free to
choose the market and the price
No special fee for the grid connection
Free third-party access to the grid
No license required for export and no tariff set
Guaranteed purchase offered by GoG for three months
Priority access for transmission to Turkey (Long term
contract with TSO) with new HPPswww.menr.gov.ge
PERMITS AND LICENSES
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* HPPs with less than 13 MW do not require Generation License
ConstructionPermit
Ministry of Economy & Sustainable
Development
Issued within 60 working days
Generation License
GNEWRC
Above 13MW*
Issued within 30 working days
www.menr.gov.ge
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EXPORT OPPORTUNITIES
Georgia’s hydro potential can be used to offset part of the growing demand of neighboring as well as of European countries
Over the last three decades Turkish demand for electricity has grown at an average rate of 7.6% per annum
By 2013 Turkey is expected to be a net importer of electricity
The peak demand season (summer) in many of neighboring countries occurs in Georgia’s peak supply season – when river flows are at their highest
Increased profits from carbon credits sales
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EXPORT ORIENTED PROJECTS
40 HPP on-going Projects
• Total installed capacity of 2506 MW and annual generation up to 10.2 TWH
• Projected investment USD 4.1 bln.
• Construction works to be finished in 2014-2017
10 new HPP constructions ongoing
15 new HPP constructions will be launched in 2012 8
Major companies operating in
Georgia• Anadolu (Turkey)• Peri (Georgia)• Ağaoğlu (Turkey)• Trans Electrica Ltd.(India)• Energo Pro (Czech) • Clean Energy Group (Norway)• KGM (Georgia)• Rusmetal (Georgia); and etc
www.menr.gov.ge
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INFRASTRUCTURE WITH NEIGHBORING COUNTRIES
Existing Transmission lines• Russia 1155 MW
Existing & Planned Transmission Lines
• Turkey 2000 MW• Armenia 835 MW• Azerbaijan 1150 MW
Georgian power grid is connected to the grids of all of neighboring countries
Construction of new high voltage 500/400 KV line to Turkey will be finished by 2012
Construction of additional interconnection with Turkey is under negotiation
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INVESTMENT OPPORTUNITIES
Currently, 41 HPP projects (each up to 100 MW) are offered to potential investors
Investor is free to choose and apply for construction of up to 7 potential HPPs from the list
Investor is not limited with the list
Terms and conditions of EOI for HPPs more than 100 MW capacity is subject of Government’s resolutionwww.menr.gov.g
e
HPPs PRE FEASIBILITY STUDY INCLUDES
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Financials/Ratios
Income Statement
Cash Flow
Balance Sheet
NPV
IRR
Technical Projection
HPPs Technical DataHydrological Data
TopographicMaps
Other Necessary Data
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LARGE-SIZE HYDRO PROJECT
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Tvishi Namakhv
ani Joneti
Installed capacity
100 MW 250 MW 100 MW
Annual average generation
386 GWh 941 GWh354 GWh
Height of dam 56.5 m 111.0 m 31.0 m
Type of damCVC
gravityConcrete
archRock fill
Type of diversion Tunnel Tunnel Channel
Type of spillwayGated over
damTunnel, gated
In river, gated
Maximal water head
36.3 m 83.0 m 32.0 m
Number of turbines
2 units 3 units 2 units
Type of turbines Kaplan Francis KaplanPower of units
[MW]2 x 50
2 x 110, 1 x 30
2 x 50 MW
Namakhvani HPP (Cascade Type) Installed capacity – 450 MW; Av. Annual Generation – 1,6 TWh; Estimated investment cost – USD 800
mln.
Namakhvani Cascade
Expression of interests on:
A. Consultancy services and,
B. EPC contractor
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INVESTMENT SUPPORTING FACTORS
Liberal Tax Legislation• Only 6 taxes effective in Georgia• Low and flat tax rates• Internationally accepted methods and practices• Minimum bureaucracy• Light administrative burden to taxpayers
Georgia has in force 36 OECD model Double Taxation Avoidance Treaties
List of treaties is expanding rapidly, additional 9 Treaties are in line for official signature or ratification
www.menr.gov.ge
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INVETSMENT ADVANTEGES
Deregulated power sector with very impressive turnaround since 2004
Distribution companies privatized and operating at high profit
Significant existing private investment in generation assets
GoG's strong support and commitment aimed at developing hydropower resources
Simplified Procedures
Diversified & Expanding export markets including EU
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Thank You!
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