NENSKRA HPP

Construction and operation of a 280MW hydro-power scheme on the Nakra and Nenskra rivers in the Upper Svaneti region of northwestern Georgia

The project aims to increase electricity generation from renewable sources and to secure electricity generation from December to February, by developing a new high-head hydro-power scheme on the Nenskra river. The project will generate around 10% of domestic consumption. In winter, when river levels are low and demand for electricity is high, the country imports electricity and natural gas, resulting in higher electricity prices. Electricity shortages, especially in winter, are common. The project will help to address the increasing electricity demand during the year and to mitigate the risk of electricity shortage during the winter period.

If the project were located within the EU it would fall under Annex I of the Environmental Impact Assessment (EIA) Directive (2011/92/EU). The project is undergoing an EIA according to national and international standards which also includes public consultation. An environmental permit is expected to be issued by end 2015.

In 2012, the Partnership Fund and Government of Georgia entered into direct negotiation with the sponsor K-Water for a 36-year Build-Operate-Transfer type of contract (BOT) that falls under the Concession Operations section of the Guide to Procurement. Further to successful BOT negotiation, the sponsor arranged two open competitive tenders to award i) the electromechanical equipment lot and ii) the construction contract. On 31 August 2015, the three parties signed the implementation agreement (IA) and the project company entered into an engineering procurement and construction (EPC) contract with a reputable company. The Bank will verify that the procurement procedures have been done in accordance with the Bank's Guide to Procurement.

This operation is covered by the ELM Guarantee.