Oni HPP

Oni Cascade on Rioni River - A preliminary assessment

The proposed Oni Cascade is a 272MW 3-stage cascade aimed at tapping the significant hydropower potential of the Rioni River - Georgia's most affluent river. A 5-year development and construction period is envisioned, costing an estimated USD 477m. The site will produce 1475-1550 GWh annually, depending on the final reservoir design. The site appears to be financially viable at a tariff which is below that of the approximate marginal cost of thermal in Georgia - USc 6.8/kWh. In fact, it is estimated that an average tariff of USc 5.8 until planned liberalization in 2023 is sufficient to cover all costs, including cost of capital. Expected revenues from sales of carbon credits play an important role in bridging the requirements of international investors and those of the regulator. Overall, the sector outlook is positive with the planned future liberalization presenting a potential for future windfall profits to equity providers. Subject to further geological tests, the site appears to be technically and economically feasible with no known major environmental/social risks.

Table A         Key results for the Oni Cascade (Costs in USD)

* Reservoir volume is based on original design of local experts. However, the team expects that the size of the dam and reservoir and be better optimized with a smaller dam. Costs and generation estimates have been adjusted accordingly.

** This is the estimated average tariff for the first 12 years of operation, before planned liberalization in 2023. According to the analysis below, this average tariff ensures an RoE of approximately 20% on the project.

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