Tbilisi/Luxembourg, 7 January 2011
Georgia: EIB supports rehabilitation of Enguri and Vardnili hydropower plant cascade
The European Investment Bank (EIB) is lending EUR 20 million to the Republic of Georgia to finance the completion of the rehabilitation of the generator units of the Enguri hydropower plant and investments at the Vardnili hydropower cascade that are essential to ensure safe water evacuation towards the Black Sea.
This is the third EIB loan to the Republic of Georgia in 2010 and the Bank’s second operation in the country’s energy sector. In March 2010, the Bank signed a financing contract for the construction of high voltage transmission lines. Both projects are cornerstones of Georgia’s energy sector strategy, which aims to turn the country into a net exporter of hydropower, i.e. a renewable energy, in the region.
The project is fully in line with EU policy guidelines for EIB activities under the Eastern Mandate. It will promote renewable energy generation, the operational safety of energy infrastructure and the reduction of greenhouse gas emissions from alternative fossil-fuel power generation, and also underpin regional cooperation.
The EIB will co-finance the project alongside a loan of also EUR 20 million from the European Bank for Reconstruction and Development (EBRD) and a grant of EUR 5 million from the EU Neighbourhood Investment Facility, of which the sum of EUR 4 million will be used for investments and EUR 1 million for technical assistance.
Together with the signing of an intermediated loan for SMEs and small and medium-sized energy and environmental projects with Bank Republic for EUR 35 million on 17 December 2010, the EIB has now extended four loans totalling EUR 175 million to finance investments in Georgia, demonstrating its strong commitment to supporting the sustainable economic development of the country in the context of the European Union’s initiatives with its Eastern Partners.
The mission of the EIB, the European Union’s bank, which is owned by the 27 EU Member States, is to contribute to the integration, balanced development and economic and social cohesion of the EU Member States by financing sound investment. In the Eastern Partner Countries, the EIB supports the EU Neighbourhood Policy by financing projects of significant interest to the EU. The EIB started its operations in Georgia in October 2007.
Under the current mandate, the EIB can lend up to EUR 3.7 billion to projects in Eastern Europe, the Southern Caucasus and Russia during the 2007–2013 period. In this context, the EIB is prepared to consider supporting sound projects in the areas of transport, energy, telecommunications and environmental infrastructure. In addition, in Eastern Partnership Countries, the EIB can assist SMEs through lending via banks.
To complement the mandate, EIB has set up the Eastern Partners Facility (EPF) at its own risk for an amount of EUR 1.5 billion, with a EUR 500 million ceiling for projects in Russia. This facility enables the Bank to support investment grade projects, notably EU foreign direct investment (FDI) in the region.
Dušan Ondrejička, email@example.com, tel.: +352-4379-83334