European Energy Union dissatisfied with Georgia’s agreement with Nenskra Hydro

The European Energy Union, which includes Georgia along with the members of the European Union, said that, according to the preliminary conclusion of the Secretariat of the organization, the framework of the contract for the Nenskra HPP project gives Nenskra Hydro a selective advantage based on the fact that the terms of the agreement do not correspond to the market.

A complaint was filed with the organization by the Green Alternative, which asked the organization to assess the degree of compliance of the agreement with the legislation on state support. As Green Alternative points out, these rules include the exclusion of favoritism in favor of any company or energy source, transparency and the exclusion of excessive subsidies through auctions.

Under the rules of the European Energy Union, the electoral advantage for the most part implies the obligation of the ESCO (Georgian Energy Market Operator) to buy back the generated energy for 36 years at a fixed price, transfer the land to the investor at a symbolic price and exemption from taxes.

The secretariat of the union promised to continue monitoring other projects for compliance with the rules of assistance by the state.

However, the organization does not intend to continue the investigation of the case, due to the fact that the relevant Georgian institutions do not comply with the protocol on Georgia’s accession to the organization and the legislation on state support (subsidizing).

The Green Alternative believes that the lack of integration of Georgia into the common European energy market and the inability to influence competition with other market players explains this decision of the organization.