The FINANCIAL — European Bank for Reconstruction and Development is making a US$ 5 million investment in Georgia Urban Energy LLC (GUE), which will manage the construction of a new hydropower plant in the south west of the country.
This equity transaction is part of a larger EBRD investment which included a US$ 63.5 million loan signed in June earlier this year.
The project will help GUE, a subsidiary of the Turkish Anadolu Group, to complete the construction of the 85 MW Paravani hydro plant. The plant will play a key role in the country’s non-carbon energy mix and strengthen security of energy supply in Georgia and Turkey.
After the project’s completion, the plant will be connected to both Georgian and Turkish grids through a converter substation located in Akhaltsikhe, Georgia. The substation is part of the EBRD-funded Black Sea High Voltage Transmission Line project, which connects the Georgian and Turkish electricity networks.
Early in June 2011 it was announced that The EBRD will provide US$ 52 million of the total financing, with US$ 40.5 million coming from the IFC and a further US$ 23 million syndicated via commercial banks. As part of the project financing, the EBRD will also take a US$ 5 million equity stake in Georgian-Urban Energy.
Speaking at the signing ceremony, Olivier Descamps, EBRD Managing Director for Turkey, Eastern Europe, the Caucasus and Central Asia, said that the project was a landmark transaction as the first cross-border private power generation project in Georgia.
“The project supports Georgia’s efforts to sustain greener power policies and tap into its renewable energy resources. We are proud to partner with Anadolu on such a ground-breaking project, our eighth transaction together. This partnership strengthens bilateral commercial ties in the EBRD’s transition region,” he added.
According to Tuncay Özilhan, Anadolu Group’s CEO, the Group has a target of reaching 2,000 MW generation investments in the power sector in Turkey and the neighbouring countries. “We are pleased to make our first cross-border power investment in Georgia, where we want to expand our investments. Hence, we very much appreciate this exceptional support and cooperation with the EBRD in the Paravani Project,” he said.
The EBRD is the largest equity investor in private companies mainly focusing on growth and expansion capital in central and south-eastern Europe and the CIS.
“This equity investment highlights the value-added role the EBRD can play in attracting foreign investment given our significant experience to date in the Georgian power sector. With this investment, we demonstrate our strategic commitment to the development of renewable energy and improvement of energy security in the region,” said Nandita Parshad, EBRD Director for Power and Energy Utilities.
In 2010 the EBRD’s investments totalled €348.6 million. Since the beginning of its operations in Georgia, the EBRD has invested approximately €1 billion in over 120 projects, with 70 per cent of the projects representing investments into the private sector.
Anadolu Group is one of the biggest investors in Georgia. Company has purchased Natakhtari Brewery recently, which is now the leader on local beer market.
Company was founded in early 1950’s. Primary business segments: Beer, Soft drinks, Automotive, Financial services, Retail. It has impressive business alliances with multinationals including:
Coca‐Cola, Heineken, Isuzu, Itochu, Kia, Samsung, Faber‐Castell, Mc Donald’s.
According to the Group annual report 2010, it occupies 65% of beer market in Georgia, 55% of Coca-Cola market in Azerbaijan, 10 % of beer market in Russia, 90 % of beer market in Turkey, 68% oc Coca-Cola business in Turkey.
In 2010 Group total assets consisted 10,945.8 million Turkish Liras or 5,954.6 million US dollars.
Deputy Minister of Energy and Natural Resources, Giorgi Kavelashvili announced that the construction of eight new power plants will be launched in Georgia till late 2011. The construction of the eight hydroelectric power stations will require a total investment of $ 1.5 billion. The minister further informed that there are investors for all eight hydroelectric power stations. Dariali, Larsi, Shilda and three hydroelectric power stations Namahvani are included in this. In order to build hydroelectric power stations Namahvani, approximately $1 billion will be invested. Nurol Energy Production (Turkish company) and SK Engineering and Construction (Korean company) will carry out the project.
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