EIB earmarks US$4 million for rehabilitation at hydropower plants in Georgia.

As part of a US$285 million loan package to Georgia, the European Investment Bank (EIB) earmarked $4 million of the funds for application to rehabilitation at two hydropower projects in the former Soviet state, according to an EIB press release today.

Engurhesi Ltd. (Engurhesi) is the state-owned company responsible for operating the facilities; the 1,250-MW Enguri hydropower plant and the 245-MW Vardnili Cascade, which consists of the 125-MW Vardnili 1 and Vardnili 2, 3, and 4, each 40 MW.

The additional $4 million in funding, according to EIB, will help finalize rehabilitating civil, electrical and hydromechanical works at the facilities. Also, the bank said the loan will provide assistance to secure the completion of this project, which is expected to have significant impact on Georgia’s ability to supply hydropower generation.

EIB said its extension of support for the Enguri project and Vardnili Cascade follows its $23 million loan provided to Georgia in 2010. The bank said the loan was in line with European Union policy guidelines for EIB activities in the Eastern Partnership Technical Assistance Trust Fund (EPTATF) and supported by a $5.7 million grant from the European Commission.

The EPTATF supports members of the Eastern Partnership – an EU initiative governing its relationship with the post-Soviet states – Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

EU said currently phase III rehabilitation project focuses on works at the two remaining units in the Enguri powerhouse and safety works on the Vardnili Dam and water channel.

In January, Engurhesi began seeking loan proceeds from the European Bank for Reconstruction and Development (EBRD) as well as potential funding from the EU Neighborhood Investment Facility (EU NIF) to finance phase IV of the priority rehabilitation program at the Enguri plant, according to EBRD documents.

Engurhesi said phase IV would finance rehabilitation of Enguri switchyard, Vardnili II spillway gates, Enguri River diversion weir and access road, together with implementation of sedimentation management plan and improved operational procedures to promote resilience to climatic variability and climate change.

Enguri hydropower plant was built in the 1970s and is located in Jvari, in Northwest Georgia, on both sides of the border with the breakaway region of Abkhazia. The project supplies around half of the electricity consumed in Georgia and is an essential part of the Caucasus energy system, according to the EU.

The Vardnili hydropower project was commissioned in 1971 and includes the Gali Reservoir, which impounds Eristskali River in Eristskali, Abkhazia.

The $285 million loan is the second and last tranche of a $500 million framework loan for the construction and rehabilitation of about 253 km of priority primary and secondary roads identified by Georgia’s government for the 2017-2020 period, according to EIB.

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