Government Decides to Buy Out Khudoni HPP Project

The Minister of Economy and Sustainable Development Levan Davitashvili said at a news conference on December 19 that the Georgian government has decided to buy out the Khudoni HPP project.  

“We have reached an agreement with the investor and the state received the project back that will enable us to launch the project implementation in 2023 with the active involvement of the state,” the Economy Minister said, adding that due to the government’s “consistent” energy policy, “we will increase generation in Georgia, on the one hand, and increase the country’s energy independence, on the other.”  

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Davitashvili also clarified that the state will pay USD 13.5 million to buy out the project, describing the amount as “absolutely affordable.”  

“We got back the territories and the rights transferred to the company and can now move to the project implementation stage without any barriers,” he added.  

The Economy Minister stressed that in the future, all important energy and strategic projects will be implemented with the active participation of the state.  

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“This is a correct approach, this is a state approach, and we are sure that we will manage to establish effective communication with the population and gain their support,” Davitashvili noted.  

“It will be the project of Georgia, the project of the Georgian population, which will be built with Georgian resources, and ultimately, the Georgian population will enjoy the economic benefits of the project.”

Back in June 2021, then Economy Minister Natia Turnava said that the government was negotiating the termination of an investor agreement over Khudoni HPP. The Minister clarified that in 2011 the government concluded the deal with Indian company Trans Electrica to “develop” the Khudoni HPP, but the project failed to be implemented due to “objective or subjective reasons” on part of both contracting parties.  

Construction of a 700-megawatt hydropower plant, Khudoni, in the mountainous region of Svaneti, will involve the building of up to 200-meter dam on the Enguri river. The project was first started back in the 1980s, but it was halted before the collapse of the Soviet Union. The project was revitalized under former president Mikheil Saakashvili’s administration, which contracted Trans Electrica for the construction of the hydropower plant on a build, own, and operates basis. Later, the Georgian Dream government also supported the project. Since the company failed to launch construction, the real reasons behind the project failure remain unknown.  

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