Georgia eyes Iraqi electricity market
21 October, 2010
Georgia eyes Iraqi electricity market

Georgia is supposed to export electricity in Iraq and Syria after the upcoming 500 kilowatt Black Sea transmission line connecting Georgia with Turkey is constructed.
During his last visit to Washington on October 7, 2010, Nika Gilauri, Prime Minister of Georgia accentuated that Georgia aims to export electricity to Iraq.


“Georgia represents the energy corridor through which gas, electricity and oil is exported. In this regard additional projects and developments will become important not for only Georgia and entire region

but for the European energy security. We had considerations with the deputy of the US Secretary of Department of Energy; we discussed possible transit of electricity to Iraq through Turkey, which will be interesting subject for Turkey as well as for Iraq, for the USA and Georgia. Georgia may become an energy center in whole region,” Gilauri stated during his business visit in US. 
According to Ministry of Fuel and Energy of Georgia, Gilauri had negotiations with the management of the USA’s Export-Import Bank and parties agreed to sign the memorandum, which should promote attraction of the USA’s private investments in Georgian energy sector.


“Memorandum will be signed between the Government of Georgia and the “Exim Bank” financial cooperation. The “Exim Bank” will enter Georgia for the first time and will finance energy projects; among them will be the Construction of Gas liquefied facility on the Black Sea [supposed to transport Azeri gas to EU market via Romania],” Alexander Khetaguri, Minister of Fuel and Energy of Georgia, said.
According to Marika Valishvili, Deputy Minister of Fuel and Energy of Georgia, Iraq is a very interesting market to Georgia and very likely Georgian side will soon undertake negotiations with Turkey to this end.  Iraq has gas and oil but is electricity-deficient while it has clean environment-ambitions and tries to be focused on the environment-friendly electricity supply. Therefore its demand for electricity is huge and price high that makes Iraqi market attractive to Georgia from commercial point of view. Georgia also thinks to export electricity to Syria after Iraqi market becomes available. At any rate it needs Turkey as a transit country to reach these two markets.
“Turkey is exporting electricity to Iraq at the moment, it has due infrastructure and we cannot implement any export without its consent,” Valishvili told Georgian Journal. “We have to negotiate Turkey to find out whether or not it has spare capacities [of its transmission line infrastructure] and allows our electricity export [to Iraq] to transit through Turkey.”


Turkey is now streamlining its electricity sector regulations in line with European ones and Georgian side plans to start commercial negotiations in near future as soon as Turkey gets through with the legislation regulation works. Georgia exports electricity to four countries at the moment [during summertime] to Turkey, Azerbaijan, Armenia, and Russia. Georgian electricity export accounted for 749 million kilowatt/hour past year. Valishvili cannot say at the moment how much electricity can be exported to Iraq exactly but she believes the existed transmission line infrastructure connecting Georgia with Turkey cannot export the demanded capacity and it may be available only after the Black Sea Energy Transmission Project [aimed at construction of a new 500 kilowatt high voltage transmission line connecting Georgia with Turkey] will be through. Construction works of the project are already under way and the entire project is scheduled to be through by 2012-2013. The new line is supposed to 10-fold increase electricity export potential of Georgia.


The project includes description of the key 500 kwt transmission lines system with two new 500 kwt lines augmentation. One of the two new high voltage lines connects Gardabani [east Georgia] and Zestaponi [west Georgia] to a new 500 kwt capacity substation located at Georgian-Turkish border in Akhaltsikhe [south-east frontier region of Georgia].
The project is estimated under EUR 265 million and will be co-financed by European Investment Bank, European Bank for Reconstruction and Development, KFW, and the European Neighborhood Fund via preferential credit disbursed to Georgian State Electrosystem LLC [the state-owned Georgian transmission line infrastructure].

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