KfW Finances Georgian "Energy Bridge" to Tune of EUR 100 Million
OREANDA-NEWS. KfW Development Bank inaugurated the Akhaltsikhe substation in Georgia together with the Georgian Prime Minister Irakli Gharibashvili, the Turkish Energy Minister Taner Yildiz and his Azerbaijani counterpart Natig Aliyev. The facility received financing amounting to EUR 100 million from KfW on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and was supported by a partial guarantee from the Development Bank of Austria, OeEB. It serves as an “energy bridge” between Europe and other countries in the Caucasus as part of the “Black Sea energy alliance”. The electrical grids of Georgia, Azerbaijan, Russia and Turkey are now linked directly for the first time, allowing electricity to be exported to Europe via Turkey. The “Black Sea Transmission Network” creates the prerequisites for further exploiting Georgia's potential for generating hydroelectric power, reducing CO2 emissions by up to 1 million tonnes a year in Turkey alone. The total costs of the transmission network amounted to EUR 290 million. Alongside the German contribution, the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB) each provided financing of EUR 80 million, while the EU's Neighbourhood Investment Facility (NIF) contributed EUR 8 million. The Georgian side was providing the remaining funds.
“The inauguration of the substation in Georgia puts in place the final building block of the “Black Sea Transmission Network”, providing a reliable, cost-effective and efficient supply of energy for Georgia and its neighbouring states in the Caucasus region. Energy is an important requirement for tackling poverty and promoting economic growth and prosperity in the region” said Dr Norbert Kloppenburg, a member of KfW's Executive Board.
KfW is the leading donor in the Georgian energy sector, and has made a significant contribution to stabilising and reforming the sector since the partnership was launched in 1993. Up to now, investments totalling EUR 272 million have been financed in the framework of ten projects.