Market
Developing in Georgia, honestly.
Most investors looking at Georgia for the first time have the same list of questions. Here are ours, answered as we would in a first meeting—mechanics rather than figures—because numbers go stale, and a stale number on a website is worse than none.
- What supports the revenue?
Georgia has moved from bilateral guaranteed-purchase arrangements toward competitive support allocated through contracts for difference, alongside a deregulated wholesale market and a growing corporate PPA market. Which route a project takes depends on when it was originated and what it has secured. We state the offtake position for each project rather than describing a market average.
- How hard is grid connection?
Connection is agreed with Georgian State Electrosystem, and available capacity at any given substation is finite. This is the constraint that most often decides whether a site is a project or a piece of land. A signed connection agreement is a material asset in its own right, and we treat it as a gate rather than a formality.
- What does permitting involve?
Environmental assessment under the Environmental Assessment Code, construction permitting, and municipal and land-use consents. Timelines are workable but sequential, and they are not compressible by capital. This is a large part of what a development fee pays for.
- What currency is the exposure in?
Capital cost is effectively dollar-denominated, while a portion of revenue and most operating cost is in lari. Support mechanisms and PPAs vary in how they treat that mismatch. Any serious model of a Georgian project has to make its currency assumption explicit, and we do.
- What about political risk?
Georgia's EU accession process is currently paused. For a project investor, though, the questions that decide a return are narrower than the headlines: whether contracts are honoured, whether the regulator functions, whether permits are issued, and whether capital moves freely. On those, the energy sector has continued to operate normally, and it has historically sat somewhat apart from the political cycle. We would still expect a partner to form its own view rather than take ours.
Where exposure needs covering, political risk insurance and participation by development finance institutions are both established routes, and we are glad to structure around either.
- Why Georgia at all?
Strong solar resource in the east, usable wind in the centre and west, an interconnected grid with export routes to Turkey, and a small enough market that a developer with secured positions holds a meaningful share of the buildable pipeline. The barrier to entry is real, which cuts both ways — it is slow to build a position, and hard for anyone else to replicate one quickly.
Questions we have not answered here?
Ask them directly. We would rather have the difficult conversation early.