To ensure a reliable supply of electricity to Georgia's capital, Tbilisi, and its surrounding region, the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) have agreed to provide two loans of US$30 million (€28.7 million) each to JSC
AES Telasi, a newly privatised electricity distribution company in the country.
"This project demonstrates the support of the EBRD and IFC for the first privatisation to be undertaken in the Georgian power sector," said Ananda Covindassamy, the EBRD's Power and Energy Team Director. Vivek Talvadkar, Director of IFC's Power Department said: "The financing will help to improve the efficiency and reliability of electricity supply to Tbilisi. It will also improve the collection of electricity payments, and encourage substantial private financing in the power sector."
The loans totalling US$60 million (€57.4 million) will allow Telasi to strengthen its electricity distribution network, and to install new meters to improve collection. Investments are expected to significantly enhance energy efficiency by cutting power transmission losses and will also improve health and safety standards within Telasi. Furthermore, by increasing the collection of electricity payments, this project will promote additional private sector financing for other parts of the Georgian power sector.
Telasi provides electricity at the retail level to approximately 370,000 customers, about 80 percent of which are residential consumers. The company is 75 percent owned by a subsidiary of the AES Corporation (USA), the largest independent power producer in the world.
The EBRD was set up in 1991 following the collapse of communism, to aid the transition from centrally planned to market economies in central and eastern Europe and the Commonwealth of Independent States (CIS). The EBRD is owned by 60 shareholders: 58 countries, the European Investment Bank and the European Community, and operates with €20 billion in capital.
The mission of IFC, part of the World Bank Group, is to promote private sector investment in developing countries, which will reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses.
