The Enguri hydro power plant was built in the 1970s and is located at the border with Abkhazia. Its arch dam is the tallest of this type in the world. With an installed capacity of 1300MW, generated in five units, the plant would be able to supply about half of Georgia’s present electricity demand. As the country is a net-importer of electricity, the full rehabilitation of the plant will lessen its dependence from external suppliers.

The first phase of the rehabilitation was started in 1998 when the EBRD’s original loan was approved and work is now nearing completion – estimated mid-2007. In addition to urgent repair work it includes the reconstruction of unit 3 and the rehabilitation of the two oldest units at the plant. The second phase includes the rehabilitation of the two remaining units and some additional civil works on the dam.

Anthony Marsh, EBRD Director for Power and Energy, said the modernisation programme will make Enguri a secure, reliable and comparatively cheap source of energy which will benefit the whole country. In addition, the project will also support the reform of the local power sector by supporting a law on renewables and energy efficiency by the end of 2007, the adoption of which is a key element of the agreement.

The original loan had been co-financed by a US$10M grant from the European Commission who has now provided an additional grant in excess of US$2M for the second phase of the project.

Once completed, the overhaul of the facility will increase the output of the plant by at least 15%.