Georgia’s state property committee has received a plan for the privatization of the country’s power sector, drawn up by the US investment bank Merrill Lynch. It intends to submit the plan to the government for final approval, Reuters reports.
The plan proposes privatizing the republic’s electricity system over an 18 month period. Telasi, the state run municipal distribution company based in the capital, Tbilisi, is to be sold in the first eight months. According to Merrill Lynch, this will increase interest among potential buyers of regional power suppliers. Three quarters of the shares in Telasi will be sold to a single strategic investor.
Local state-owned energy distribution companies outside Tbilisi will be combined into two regional companies before being sold. Both local and foreign investors will be able to participate in international tenders for these and other energy companies.
Privatization of the generating sector is not due to begin until the sale of the distribution sector is completed. Georgia suffers from an acute shortage of power, particularly in winter when the national hydropower plants are idle. The energy sector has also suffered from corruption, including disappearance of large amounts of fuel oil destined for power stations.