Deputy Minister: Georgia's Energy Sector Is Very Attractive for Investors

Georgia’s Deputy Minister of Economy and Sustainable Development Davit Tvalabeishvili says Georgia’s energy sector is attractive not only for foreigners but also for local investors.

Tvalabeishvili made the statement while commenting on the adjusted statistics of Foreign Direct Investments 2018 published by Georgia’s National Statistics Office (Geostat) a few days ago, according to which the investments in the energy sector in 2018 were fewer compared to 2017.

The Deputy Minister says the projects launched in 2018 - 2019 alone will bring more than a billion dollars of investment into the country's economy.

“Energy is one of the most steadily developing sectors of our economy. There is a growing investor interest in energy, from hydro power, solar and wind energy, to thermal power plants and others,” he said.

Tvalabeishvili explains that the main reason the number of investments in the energy sector were higher in 2017 is that there were record-breaking investments in the economy in general that year and a number of energy projects were underway, which have since been completed.

The Deputy Minister added that over $201 million was invested in the construction of energy facilities in Georgia in 2018 – 2019 and 28 Memorandums of Understanding have already been signed on the construction of further energy facilities in Georgia.

“In April of this year, negotiations were successfully completed on the construction of the Namakhvani HPP cascade in Georgia, where $750 million will be invested. Georgian investors stand behind the projects launched today.”

Tvalabeishvili named the 230 MW thermal power plant in Gardabani as an example, which will be commissioned in 2020 and is being built by a local investor with an investment of at least $170 million.

“We are very optimistic about the development of the energy sector. In the future, we plan to promote the nation's energy potential internationally to a greater extent. After the energy market reform, we expect to grab the interest of more investors,” he said.

Geostat reports that Foreign Direct Investments in Georgia amounted to $1,265.2 million in 2018 down 35.5% from 2017 and up 2.7% from the preliminary data of 2018.

The agency noted that the main reasons the FDI fell is completion of a pipeline project, transferring of ownership of some companies from non-resident to resident units, providing adjusted profit-loss data from companies and reduction in liabilities to non-resident direct investors.

The share of FDI by three major economic sectors reached 48.0% in 2018. The largest share of FDI was allocated in the financial sector, totaling $270.7 million. The construction sector was the second with $173.0 million, followed by transport and communication with $163.0 million.

In addition, the manufacturing sector has 11.1% of FDI, followed by real estate at 10.4%, energy sector at 9.5%, hotel and restaurants 6.2% and mining 4.9%.

The top countries which invested in Georgia are: Azerbaijan – 19.5%, the Netherlands – 16.5%, the United Kingdom – 14.1%, the United States – 8.1%, China – 6%, Czech Republic – 5.9%, Panama – 5.9%, Russia – 5.5%, Luxembourg – 4.0% and Turkey – 3.9%.

The investments in the Georgian energy sector since 2013 look as follows:

2013 – $ 246.1 million

2014 – $ 190.0 million

2015 – $ 123.7 million

2016 – $ 145.0 million

2017 – $ 280.6 million

2018 - $ 120.8 million

By Thea Morrison

Image source: Financial Express

19 August 2019 16:55