Perpetual Build, Own and Operate Agreement
After a transparent and competitive tender process, with 26 companies on the shortlist, three companies submitted bids. After evaluating the bids according to the stated bid criteria, Clean Energy Group’s Georgian subsidiary, Clean Energy Group Georgia LLC, was awarded the right to develop the project. A perpetual Build, Own and Operate Agreement will be signed with the Government of Georgia.
Fifteen-year Power Purchase Agreement
The project comes with a 15-year Power Purchase Agreement (PPA) with the Government of Georgia, backed by a state guarantee, for eight months of the year (September–April) , representing about 50% of the generation from the project. The remaining generation will be sold in the domestic market or exported primarily to Turkey.
As part of the Association Agreement with the EU and becoming a member of the Energy Community, Georgia is obliged to develop a transparent hourly day-ahead and balancing market for electricity by 2020. Georgia will play an important role in the planned integration of power systems and energy trading between Georgia, Turkey, Russia, Azerbaijan and Armenia.
Fixed price Engineering, Procurement and Construction Contract
The project will be constructed as a fixed price Engineering, Procurement and Construction (EPC) contract with a leading international construction company, with extensive international experience in infrastructure construction. The project is well advanced with a design developed by the leading Italian engineering firm Studio Pietrangeli. The construction and environmental permits have been obtained and agreements to acquire most of the land have been signed. Construction is estimated to start in 2018.
Technical assumptions based on Basic Design
|Estimated annual production (P50)||1171 GWh||343 GWh|
|Installed capacity||333 MW||100 MW|
|Estimated construction start||2018||2018|
|Estimated commercial operations||2021||2021|
|Dam height||100 m||59 m|
|Number of turbines||3+1||2|
|Tunnel length||4.4 km||NA|
|Storage||3 days||3 days|
|Gross head||105 m||33 m|
|Maximum discharge||339 m3/s||336 m3/s|
Georgia is a favorable investment destination, with a simple tax code consisting of six flat taxes and a total tax rate of only 16% on commercial profits that are distributed. Georgia was ranked 16th on the World Banks Ease of Doing Business for 2017, Trace International and Transparency International rank Georgia’s corruption level at the same low level as Norway. Georgia has signed an Association Agreement with the EU, is a member of WHO, has ratified the Energy Charter Treaty and signed the New York Convention. For more information, see Invest in Georgia.