EBRD to finance rehabiliation of 1320 MW Enguri hydropower plant in Georgia for the fourth time

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The European Bank of Reconstruction and Development (EBRD) has announced that it is to finance the modernisation and rehabilitation of the Enguri hydropower plant, the largest electricity supplier in Georgia. The plant is located in the Enguri river basin, in the north-west of the country. With an installed capacity of 1320 MW, it supplies 40% of Georgia’s electricity.

Construction of the Enguri dam began in 1961. It became temporarily operational in 1978, and was completed in 1987. It boasts the world's second highest concrete arch dam with a height of 271.5 metres. However, upon inspection by engineers from Hydro-Québec in 1994, the dam was found to be severely dilapidated.

This began the long process of rehabilitation. The EBRD arranged loans for the project in 1998 (US$38.7 million), 2006 (US$10 million) and 2010 (EUR20 million) with co-financing provided by the European Union, the Japanese Government, KfW bank, the European Investment Bank and the Government of Georgia.

These debt facilities financed upgrades to all five units of the plant, increasing its operational capacity, and the installation of modernised technology.

Despite this, in February 2017, Georgia's Ministry of Energy temporarily stopped generation at the plant, due to issues with the diversion pressure tunnel. The plant was offline for two weeks while leaks were identified and further rehabilitation planned. Thus a fourth phase of rehabilitation is absolutely necessary.

EBRD is providing a loan of EUR28 million. In addition to this, the plant’s operating company Engurhesi Ltd will receive EUR7 million from the European Union Neighborhood Investment Facility and a technical cooperation grant of EUR450,000 provided by the Austrian DRIVE fund.

The funds will be allocated to civil works on the headrace tunnel, electromechanical works on the switchyard, hydro-mechanical works on the penstocks and gates of the dam, sediment management of the Enguri resevoir and consultancy assignment.

With such a large proportion of the country's electricity supply depending on the functioning of the Enguri plant, the importance of this project cannot be underestimated.