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 at the time, Clean Energy Group Georgia LLC (now renamed to Enka Renewables), was awarded the right to develop the project. A perpetual Build, Own and Operate Agreement was signed with the Government of Georgia in April 2019.
Fifteen-year Power Purchase Agreement
The project comes with a 15-year Power Purchase Agreement (PPA) with the Government of Georgia, for eight months of the year (September–April). 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.
Engineering, Procurement and Construction Contract
The project will be constructed as an Engineering, Procurement and Construction (EPC) contract with the Turkish company Enka, a leading international construction company, with extensive international experience in infrastructure construction. The project is well advanced with a basic design developed by the leading Italian engineering firm Studio Pietrangeli, which has further been develoepd into a detailed design by Stucky, part of the Gruner company. Construction is estimated to start in 2019.
Georgia is a favorable investment destination, with a simple tax code consisting of six flat taxes and a total tax rate of only 9.9% on commercial profits that are distributed. Georgia was ranked 6th on the World Banks Ease of Doing Business for 2018, 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.