Overview
Adjaristsqali Georgia LLC (AGL) is a Georgian special purpose vehicle set up to develop the hydropower resources on the Adjaristsqali River and its tributaries, in the Autonomous Republic of Adjara, in South Western Georgia. AGL is a joint venture between Norway’s Clean Energy Invest and India’s Tata Power and IFC, a member of the World Bank Group. IFC has supported the project since its early development through one of its arms for supporting the development of early-stage projects.
In 2013, the Government of Georgia issued a construction permit for Shuakhevi HPP. The Project involves the construction and operation of a 187 MW hydropower scheme, consisting of two HPPs: the 178 MW Shuakhevi HPP and 9.8 MW Skhalta HPP with respective dams and reservoirs on the Adjaristsqali and Skhalta Rivers and one five-meter weir on the Chirukhistskali River.
The Shuakhevi project is a part of the Georgian Strategy to develop its hydropower potential. The generated electricity will be sold both in Turkey and Georgia, and this way enables to reduce dependency on imported power in the country. The investment has a positive impact on strengthening Georgia’s energy sector while also enabling the construction of a new 220kV Batumi-Akhaltsikhe Transmission Line significantly increasing the grid connection in South Western Georgia.
AGL established high standards for corporate governance and business conduct. During the construction period, more than 700 Georgians were employed, mostly from the local communities. AGL undertook extensive CSR program in the area aimed at local infrastructure development, support to income-generating initiatives, and various educational and awareness-raising activities. The company pays 1% of property tax to host municipalities thereby significantly enhancing contribution to the municipal budgets.
Owners
The shareholders/owners are Clean Energy Invest AS (Norway), Tata Power (India) and International Finance Corporation (IFC), a member of the World Bank Group. Clean Energy Invest AS entered the Georgian market in 2010 after a competitive tender, for which three companies submitted bids. Following the receipt of the license for the Adjaristsqali Hydropower Cascade, CEI partnered with IFC in 2011. India’s largest integrated power company, Tata Power joined the consortium for developing the project in 2013. CEI and Tata Power own 40% of each project, while IFC holds the remaining 20%. The total cost of the investment is more than USD 420 million.
Management
AGL has established sets of rules and practices to involve and balance the interests of project shareholders. A Board of Directors has been established which is overseeing the project progress and implementation comprising representatives from shareholder’s companies. A Steering Committee consisting of executive board members is overseeing the work undertaken by AGL management. AGL CEO is leading the implementation of the project.
Lenders
The Shuakhevi Hydropower Project is financed by International Financial Institutions (IFIs), such as International Financial Corporation (IFC), European Bank for Reconstruction and Development (EBRD), and Asian Development Bank (ADB). The project is developed according to the safeguard requirements of the IFIs.
Contractors
AGL has commissioned UK based engineering company Mott MacDonald Ltd as International Environmental Consultant to undertake the Environmental and Social Impact Assessment (ESIA) and associated Environmental and Social Management Plans (ESMP) in compliance with national permitting requirements as well as international finance requirements. Georgian consultants Gross Energy Group and Gamma Consulting were supporting Mott MacDonald during feasibility studies.
During the construction phase, Mott MacDonald also was selected as the owners’ engineering company. For undertaking civil engineering works, a Turkish company AGE Insaat was selected through international tender and Alstom India (now GE Power) was selected as the Electro-Mechanical Contractor.
