The European Bank for Reconstruct6ion and Development has arranged a US$80 million syndicated loan to JSC Dariali Energy for the development, construction and operation of the 108-MW Dariali hydropower plant.
The project, which is to be located on the Tergi River in the Mtskheta-Mtianeti region, represents one of the few privately-owned greenfield hydropower plants in the country.
“We are delighted to deepen our support for Georgia’s power sector,” EBRD Director for Power and Energy Nandita Parshad said. “This investment demonstrates our commitment to invest in renewable sources of energy to improve Georgia’s energy security and mitigate the impact of climate change.”
The plant is the first limited recourse hydropower project in Geoergia to be financed under an A/B long-term loan in which EBRD provides an “A” loan of $40 million. Meanwhile, the “B” tranche will be split into two portions. Dutch development bank FMO will provide a $30 million trance, while the remaining $10 million will be taken by the Green for Growth Fund, Southeast Europe.
The project will help improve the stability of Georgia’s transmission network, EBRD said, as its location is closer to the majority of the country’s population than the bulk of its existing power sources. Currently, two-thirds of the country’s power sources are located in northwest Georgia, while the about 66% of its demand lies in the east.
Dariali will also supply energy to Turkey using the Black Sea Transmission line that was financed by EBRD in 2010.
The bank said t6he project will be built in full accordance with the European Union’s environmental requirements and the sustainability guidelines established by the International Hydropower Association.
The project will also be the first in Georgia to feature carbon-neutral construction by including reforestation after the completion of the construction works.
Dariali, then estimated at 50 MW, was among 78 small and medium-sized hydropower projects that Georgia’s Ministry of Energy offered to investors on a build-own-operate basis in 2008.