Adjaristsqali Hydro Project

This summary covers an equity investment by Hustadlitt A/S of Norway in the Adjaristsqali Hydro Project in Georgia. The investor has applied for a MIGA guarantee of up to $50 million for a period of up to 15 years against the risks of expropriation, war and civil disturbance, and breach of contract.

The project involves the construction and operation of the 188 megawatt Shuakhevi hydropower project, consisting of the 179 MW Shuakhevi plant and the 9 megawatt Skhalta plant. The International Finance Corporation (IFC), the European Bank for Reconstruction and Development, and the Asian Development Bank are providing debt financing for the project.

MIGA first supported this project in 2015 via a 15-year guarantee of $63 million covering an equity investment in the project by Tata Power International Pte. Ltd. of Singapore.

The project has an option to export power to Turkey through the 400 kV Akhalskhe-Borcka cross-border transmission line for nine months of the year. The project will 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 transformational infrastructure projects.