Enguri SHP at the Enguri Arch Dam

Enguri Arch Dam on Enguri River - A preliminary assessment

The proposed small run of river hydropower station at the afterbay of the Enguri Arch Dam presents a unique opportunity to ensure year-round reliable generation at a high load factor, allowing the project owner to exploit the minimum required discharges of Georgia's (by-far) largest reservoir. This situation allows for a highly stable, year around generation. The proposed site can accommodate 10MW and 12MW alternatives, with the choice between these two alternatives depending on investors' outlook on the future average regulated tariff in Georgia. The 10MW alternative assumes a two-and-one-half-year development and construction period, totaling USD 11m. The financial viability of the 10MW (unregulated) alternative is assessed in the study. The results indicate that the site is highly attractive with a tariff of USc 2.0 enough to cover all costs, including costs of capital. This points to a very favorable situation for the project owner in an unregulated environment where both the weighted average regulated tariff and the marginal tariff in Georgia are considerably higher. Due to the high load factor and low tariff, the revenue generated by carbon credits is particularly important in this project. The Enguri SHP potentially offers an entry point for new international investors in Georgia.

Table A         Key results for 10MW Enguri SHP (Costs in USD)

* Reservoir volume of Enguri Arch Dam.

** This tariff until 2023, followed by a liberalized price of USc 6.8, ensures an ROE of greater than 20%.

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