Delegation of the European Union to Georgia

EU and KfW sign agreement for "Extension of the Georgian Transmission Network" project

21/12/2017 - 12:39
Press releases

The EU through its Neighbourhood Investment Facility (NIF) provided a EUR 9,9 mln (approx GEL 28 mln) grant to support the program on “Extension of the Georgian Transmission Network”, co-financed by KfW.

  • The EU through its Neighbourhood Investment Facility (NIF) provided a EUR 9,9 mln (approx GEL 28 mln) grant to support the program on “Extension of the Georgian Transmission Network”, co-financed by KfW;
  • KfW as a Delegated body to EU NIF concluded the Financing and Project Implementing Agreement with respective counterparts – The Ministry of Economy and Sustainable Development and Georgian State Electrosystem GSE;
  • The aim of the program is to a) provide grid infrastructure for promotion of net integration of hydropower plants (HPPs); b) Increase transmission capacities, including cross-border trade; c) improve security of energy supply of Georgia;
  • The program consists of the following components: Tskaltubo-Akhaltsikhe-Tortum Connection, reinforcement of transmission infrastructure in Guria, construction of North Ring, reinforcement of Kakheti transmission infrastructure;
  • EU NIF contribution EUR 9,9 mln (approx GEL 28 mln) consists of EUR 5,9 mln (approx GEL 17 mln) Investment Component and EUR 4 mln (approx GEL 11 mln) Technical Assistance component;

 

On December 22nd 2017 the Deputy Minister of Economy and Sustainable Development of Georgia Mr. Giorgi Chikovani, General Director of Georgian State Electrosystem (GSE) Mr. Sulkhan Zumburidze and KfW representative Mr. Hans Rieck have signed a Financing and Project Implementing Agreement on the “Extension of the Georgian Transmission Network”.

"I congratulate the parties on launching this major energy infrastructure project, to be implemented with around GEL 30 million (EUR 10 million) of EU grant support. We are confident that the extended electricity grid will ensure more reliable supply, creating better business and investment opportunities, thus strengthening Georgia's role as a regional energy hub.  This clearly has the potential of generating more and better job opportunities for many people. We wish success to the parties in making this project a reality." noted Ambassador of the European Union, Janos Herman.

The EU has allocated a grant contribution of EUR 9,9 mln (approx. GEL 28 mln) through its Neighbourhood Investment Facility (NIF) within the scope of this agreement.

Of this amount, EUR 5.9 mln (approx. GEL 17 mln) will co-finance the Tskaltubo-Akhaltsikhe-Tortum network connection, and the remaining EUR 4 mln (appox. GEL 11 mln) will finance Technical Assistance to the programme during its duration.

This contribution is in conjunction with the EUR 125 mln (approx. GEL 370 mln) loan already provided by KfW Development Bank, on behalf of German Government.  In addition, the programme is also co-financed by EBRD. The total cost of the project is EUR 225.36 mln (approx. GEL 670 mln).

The program’s implementation period will last until 2021.

“We are delighted to witness today the signing of the Financing and Implementing Agreement with our Georgian partners. EU (NIF) contributes to the program ensuring stable energy supply and future possibility for energy export to neighbouring countries. The EU has contributed not only to this program but to a number of energy infrastructure projects in Georgia financed by German Financial Cooperation with regional importance., Among them are: Black Sea Energy Transmission Project and Jvari substation construction project. We believe that our joint contribution plays a significant role in the further development of the country’s economy”, said Mr. Hans Rieck. Once again we would like to express our gratitude to all signatory parties to this Agreement.

 

KfW Development Bank

KfW Development Bank is one of the leading financiers of development in Georgia and in the Caucasus Region. The aim of KfW´s work on behalf of the German Government is to assist in improving economic and social conditions in Georgia and the other countries of the South Caucasus. Accordingly, KfW finances investments in economic and social infrastructure and promotes the private sector - in particular small and medium enterprises.

KfW´s activities in Georgia started already in 1993. Since then more than EUR 750 million have been invested in different sectors, among them are energy, financial, municipal infrastructure, environment and health sectors. More than 50% of the whole investment (EUR 400 million) is attributed to the energy sector of Georgia.

 

For further information please contact:
KfW Office Tbilisi/Georgia

Mr. Klaus Veigel, Klaus.Veigel@kfw.de
Mr. Hans Rieck, Hans.Rieck@kfw.de
Ms. Julia Heinz, Julia.Heinz@kfw.de
Ms. Nino Shanidze, Nino.shanidze@kfw.de

31 Griboedov street
Business Center “Merani”
0108 Tbilisi, Georgia
Phone: +995 32 220 03 20
 

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