EurasiaNet Organization
Jan 24 2005

PROMISES STILL POWER GEORGIA’S ELECTRICITY SYSTEM
Molly Corso 1/24/05
A EusrasiaNet Photo Essay

This New Year’s, the television was on at Imzari Chartishvili’s home
in the West Georgian village of Lesa. Although no one watched it most
of the time, its presence was a comfort. The broadcasts came as a
special holiday gift from the Georgian government: a 24-hour supply
of electricity.

After years of inadequate or non-existent maintenance following the
breakup of the Soviet Union, the problems of Georgia’s electricity
system are legion – and legendary. But with expectations of a cash
windfall from the current privatization campaign, the government is
promising that the situation might – after 13 years – finally change.

A December 23 statement by Prime Minister Zurab Zhvania set the tone.
In it, Zhvania pledged that $70 million out of an expected $200
million from state property sales would go to “securing electricity
supplies” by autumn 2005. Energy Minister Nika Gilauri later went one
step further and even named a concrete date: October 1, 2005.

But whether that amount will be enough to turn the lights on is open
to debate. Dana Kenney, senior energy advisor at the US Agency for
International Development’s Office of Energy and Environment in
Tbilisi, stated that the figures touted by the government will fall
far short of solving Georgia’s energy woes. Pervasive corruption and
problems with bill collection also plague the energy sector. Though
breaking the system up into separate generation, transmission and
distribution units helped curtail some of the corruption, Kenney
said, those problems still linger on. “Money has to flow through the
system,” she commented.

How the government plans to keep that money flowing, however, is
unknown. For now, in addition to the privatization revenue, emphasis
is being placed on outside assistance. At a June 2004 donors’
conference in Brussels, Georgia submitted requests for $82 million in
assistance for the energy sector, an amount second only to “budget
support,” the online news service Civil Georgia reported. The
government also expects to use funds from the US-run Millennium
Challenge Program for refurbishing small hydropower stations and
monies from the German bank KWF to revamp the regions’ electricity
supplies, Gilauri told a January 6 press conference, the Prime News
Agency reported. The exact amount of these funds has not been
disclosed.

A comprehensive government plan to revamp the energy system has also
been announced, but not made public. The Energy Ministry did not
respond to EurasiaNet requests for information on the plan in time
for this article.

Meanwhile, despite the government’s promises, public exasperation
with Georgia’s energy crisis shows no sign of abating. In December
2004, some 600 protestors in Kutaisi, Georgia’s second largest city,
took to the streets with placards bearing a simple message: “Give us
light.” They were joined by 200 demonstrators in the nearby town of
Zestafoni.

At the time, local officials appeared divided on how to respond to
the crisis. While Giga Shushania, deputy governor for Imereti
province, home to Kutaisi, took aim at power distributors for leaving
the city “blacked out for the past few months” and without adequate
drinking water, Deputy Governor Gia Tevdoradze took issue with
protestors, asking “You haven’t had electricity for 13 years [so] why
do you remember it?” the daily 24 Hours reported.

Georgia produces mainly hydropower, which provides enough energy for
the spring, summer and autumn when water levels are high. When water
levels fall in the winter, imports – from Russia, Armenia, Turkey and
Azerbaijan – cover the gap. Energy Efficiency Center Georgia, a
renewable energy consultancy sponsored by the European Union,
estimates that Georgia’s domestic oil, gas and coal supplies can
cover only 20 percent of annual demand.

These days, the degree of the problem is not always felt in Tbilisi,
where the situation has drastically improved over the past few years.
But the capital still feels the pain of aging transmission lines and
equipment. Periodic blackouts hit the capital in October, November
and December; largely the result of faulty transmission lines, in
addition to the general disrepair of the entire sector.

But while Tbilisi may go several days without reliable electricity,
several weeks or even months is more the norm in the regions, home to
approximately 68 percent of Georgia’s population of 4.7 million.

Bill payment is one frequent explanation cited by both the government
and energy sector experts for the electricity system’s woes.
According to statistics from the Energy Efficiency Center, roughly 60
percent of Tbilisi residents pay their electricity and gas bills. In
the regions, though, that number drops to around 30 percent.

“There is a difference between [electricity company] management in
Tbilisi and the rest of the country,” said George Abulashvili,
director of Energy Efficiency Center Georgia, “The customers in
Tbilisi are paying for the energy.”

But in the western province of Guria, home to Imzari Chartishvili,
paying or not paying electricity bills makes little difference. While
electricity company officials have announced that they will provide
electricity for a few hours per day only to account holders who have
paid their monthly bills (roughly nine lari, or about $5), recently,
even those residents who had paid their bills have still been left
sitting in the dark for days on end, villagers in Lesa say. What
power there is comes for a few hours at night only.

Ongoing corruption at each stage of the electricity system –
generation, transmission and distribution – plays a large role in
hampering bill payment, commented USAID’s Dana Kenney. “People don’t
want to pay because they don’t know where the money is going,” she
said.

So far, under Saakashvili’s relatively free-form anti-corruption
campaign, few details have been provided on how the government plans
to tackle that problem.

Meanwhile, outside interest in Georgia’s energy industry continues
apace. In December, plans were announced by Canargo Energy
Corporation, a Channel Islands-based oil and gas production company,
for a $57 million oil drilling project in the Samgori and Ninotsminda
fields. Georgia’s Vartsikhe Hydro Power Plant was recently sold
together with Chiaturmanganumi, a manganese mining enterprise, to the
Russian company EvrAz Holding and the Austrian-Georgian company
DCM-Ferro for $132 million. Talks have also reportedly started about
selling the country’s gas distribution stations, a heating plant and
a backline pipeline, to Russian energy giant Gazprom, according to
Rustavi-2 television – deals that would require amendments to
existing legislation.

But whether or not this show of investor interest will make a
difference for ordinary Georgians remains unknown. So far, the lack
of workable solutions has only slowed Georgia’s economic recovery
still further, observers say. The country’s per capita income and
economic growth rates lag far behind those of neighbors Armenia and
Azerbaijan.

“Energy is everything for our people . . .They can’t do anything
without energy,” said Manana Dadiani, head of the EEC’s Renewable
Energy Department. “Giving them energy gives them the possibility to
do something.”

Editor’s Note: Molly Corso is a freelance journalist and photographer
based in Georgia.

From: Emil Lazarian | Ararat NewsPress