The Georgia government has allocated a GEL 125 million (about USD 72.6 million) loan with a 0.5% annual interest and a two-year term to four companies in Georgia in an effort to prevent a swift price hike of gas for consumers.
KazTransGaz-Tbilisi, the Kazakh state-owned company distributing gas in the capital city Tbilisi, will receive GEL 45 million of the loan.
Mtkvari Energy, a subsidiary of the Russian-owned electricity grid in Tbilisi Telasi which needs gas to generate electricity from power plant number 9, will receive GEL 37 million.
Energy-Invest, a Russian company which owns a gas turbine generator, will receive GEL 25 million.
Itera-Georgia, a subsidiary of the Russian company Itera that distributes gas to the Georgian regions, will receive GEL 18 million.
According to a decree by PM Zurab Nogaideli that was signed on January 3, the companies should repay the loan before December 31, 2008. At the same time, the decree leaves room for the possibility to re-examine the terms of loan if the companies inform the government in advance about possible difficulties to repay it.
The companies will have to cover the loan with an additional sum that will be allocated in the amount of new consumer tariffs.
Tariffs on electricity and gas for consumers in Georgia did not increase in January 2007, despite Russia increased gas price for Georgia from USD 110 to USD 235 per 1000 cubic meters.
Officials in Tbilisi say that the GEL 125 million loan to the companies was a move to ease the gas price hike for households and enterprises during the winter period.
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