Economy Minister on Enguri HPP Deal

Lasha Zhvania, the Georgian economy minister, said fears that Georgia might lose control over Enguri hydro power plant were groundless.

Speaking at a news conference on January 13, he said that talks were underway on a joint management of the plant with the Russian electricity trader Inter RAO and not about selling the plant’s shares.

He reiterated the Energy Minister Alexandre Khetaguri’s statement that an agreement had been reached in principle – a memorandum of understanding – with Inter RAO on the matter and a legally binding contract had yet to be signed.
 
He said that if the contract was signed a joint board would be set up composed of three representatives from each party.

“Inter RAO is a company from the country, which is now an occupant and which is in full control of Abkhazia. You know that part of Enguri hydro power plant is located on the territory of Abkhazia,” Lasha Zhvania said. 

“I want to draw your attention on the name of memorandum – between Inter RAO and the Georgian Energy Ministry. By this the Russia’s state company recognizes Georgia’s jurisdiction over Enguri HPP, as well as need for taking license and permit for economic activities in Abkhazia from Tbilisi and not from the separatist authorities [of Abkhazia],” he added.

He also said that Enguri HPP “is very important part of the country energy system” accounting for 40% of Georgian electricity generation and the government was not even considering selling of its shares.

The Minister said that part of the electricity generated by the Enguri HPP – about 25% of total generation – was consumed by Abkhazia and no one was paying for this. “In case of signing the contract this amount of money – GEL 15 million – will be paid to the Georgian side,” he added,.

Lasha Zhvania also denied that deal would contravene law on occupation, which restricts economic activities in breakaway Abkhazia and South Ossetia.

“The law clearly says that if the economic activity [in the breakaway regions] constitute to the interests of Georgia, such activity is permitted upon the consent of the Georgian authorities,” he said.

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