IFC Advisory Services – Europe and Central Asia Power Program Hydropower Utilization of Tekhuri and Khaishura Rivers (Improvements to the Financial Model)
Client: IFC - International Finance Corporation
Name of partner(s): N/A
Start/Completion Date: October 2017 - December 2017
Project description: The overall purpose of the Europe and Central Asia (ECA) Power Program ("the Program") is to catalyze investments in clean energy generation, transmission and distribution networks and other related infrastructure, so that power companies and the energy sector at large in ECA become more productive, competitive, and sustainable. As a part of the Program's implementation activities, IFC signed the Advisory Engagement Letter (AEL) with the Georgia based company JSC Phazisi Group ("the Client"), to support development of hydro power plant (HPP) projects in the country. The Client is currently developing two HPP power projects:
The Tekhuri HPPs is a cascade of three run-of river plants on the Tekhuri River in Western Georgia, in the Martvilli region. Rated capacities of single plants amount to 32 MW, 35 MW and 47 MW. Mean annual production of the cascade is projected to be 508 GWh. The Khaishura HPPs is a cascade of two run-of river plants on the Khaishura River in Western Georgia, in the Svaneti region. Rated capacities of single plants amount to 18 MW and 8 MW. Mean annual production of the cascade is projected to be 119 GWh. Technical design documents for both cascades have been developed at the feasibility design level. Taking into account that Pre-construction Memorandums of Understanding (MoU) for both cascades have been signed with the Government of Georgia (GOG) and that terms of the Construction MoU (which includes the tariff and the PPA, too) have been negotiated with the GOG it was needed to create a sound basis for negotiating the tariffs with the Government, the Client has expressed an interest to initiate a process of calculation of tariff levels ("the Project") required to provide for certain financial returns of the project. The Consultant has been employed to implement this assignment which includes adjustments to the existing financial model aimed at calculating the required off-take prices (winter and summer tariffs), assessment of the project value by producing certain economic/financial models and their respective output parameters, and preparation of the report and a power point presentation, summarizing main findings of the work.
Description of actual services provided within the assignment: