EEC Georgia in cooperation with the Norwegian company ENSI International has started the implementation of a new project "Financial Engineering for Small Hydropower stations in Georgia".

The programme is initiated with support of the Norwegian Ministry of Foreign Affair with the main aim to increase local capacity building on financial issues.

The programme is aimed at project developers and owners of Small Hydro Power Plants in Georgia, in particular within rural areas, agriculture and agro-processing and in the manufacturing industries.

The project consists from the Information seminar and three training sessions, that will be held with the intervals of 1-1, 5 months in the period started from September 2006, where specialists and managers will be trained in how to develop Business Plans for small scale hydro power stations.

The Financial Engineering programme was started with an Information Seminar at 21.06.06 for 42 participants from financial institutions, energy authorities, SHP owners and SHP developers (see pictures).

The participants with the most suitable projects ate invited to participate in the full programme.

At the three training sessions, each lasting for 2-3 days, EEC and ENSI consultants give lectures, organize exercises and hold individual consultations with each project team.

In between the sessions the participants continue the development of their project based on skills obtained and advice given at the previous session. EEC will assisting and supporting, as well as pushing to ensure agreed progress at the same time as their personnel is further improving their skills and experience.

Mr. George Abulashvili, Managing Director of EEC Seminar official opening	Mrs. Nino Lazashvili, Ministry of Energy of Georgia Welcome speech
Mr. Tor-Eigil Robertsen, Senior Partner, ENSI- Energy International AS Norwegian-Georgia Capacity Building programme on Cleaner Production and Energy Efficiency. Aims and objectives for the Financial Engineering programme for Small Hydropower Projects.	Mrs. Manana Dadiani, Renewable energy Expert , Energy Efficiency Centre Today’s status of the SHP developments in Georgia
Mr. Paata Janelidze - UNDP , Project Manager UNDP Project-"Promoting the Use of Small Hydro Resources at Community Level”	Mr. George Ramishvili, USAID funded - Rural Energy Program PA Consulting group
Mrs.Kristin Tomassen Waeringaasen, Project Manager , ENSI - Energy International AS Experience from on-going Financial Engineering Programme for SHP in Kyrgyzstan	Mr. Tor-Eigil Robertsen, Senior Partner, ENSI- Energy International AS Criteria for participation in the Financial Engineering Programme

On 26-28, September, in the conference hall of hotel “Vere Palace”, Energy Efficiency Center Georgia (EEC) together with ENSI – Energy Saving International AS, Norway, was conducted the first training session on " Financial Engineering for Small Hydropower stations in Georgia”.
29 participants had attended to the session.
The following presentations were made during the session:

• Mrs. Annika Kalov from KfW German development bank inform about the model of the Revolving Fund for Fund for Renewable Energy in Georgia (hydro and geothermal power);

• Revolving Fund is a tri-lateral co-operation between KfW development bank, UNDP/GEF and Government of Georgia (Ministry of Energy and Fuels, Ministry of Environment)

• Overall capitalization is 11 mln. Euro

• There should be also grant capital for the technical assistance, but necessary funds are not secured yet

• First phase projects, expectedly 5-7 ones will be directed for rehabilitation of SHPs

• The Fund would be established at one or two commercial banks to be selected under the tender basis.

• The following terms are sought:
  Banks - Repayment period 10 years, interest rate 3%, grace period 2 years
  Final borrower - Repayment up to 7 years, interest rate 8%, grace period 1 year, equity financing min. 30%

• Revolving Fund is open for the third party financing. At the moment, negotiations are hold with EBRD

• KfW hopes that loan administration, selections and monitoring of projects would be fully done by the local banks, but it expects that local capacity and understanding of SHP projects is rather low.

• Mr Sandro Menabde from Tbilisi Aircraft manufacturing company -hydro turbine manufacturing. Mr. Menabde presented the main technical and economical details of turbines manufactured on TAM

• Mr. George Naskidashvili awarded to participants credit conditions of the Bank of Georgia and expresses the interest to invest small hydro projects.

The participants were interested in program and at the end of seminar all of them made the ten minutes presentations reflected the main details of their projects. ( see picture with SHP’s locations and list of projects owners/promoters companies).

Several documents were handed over to the participants:

1. Handouts of all presentations made during the session;

• Aims and objectives of the training programme;

• The Project Development Process and Business Planning – Introduction;

• Investment profitability calculations;

• Programme example – Kyrgyzstan;

• Financing plan;

• Cash flow Calculations;

• Current developments of SHP sector in Georgia;

• Project information;

• Quality assurance for technical parts of business plans;
   

2. Manuals:

• Investment profitability calculations;

• Financial Plan, exercise;

• Cash flow Calculations, exercise;

• ENSY Economy software user guid;

• Business plan template ( Rus, Eng,Geo.);

• SHP Glossary

• Technology matrix

All documents are available in EEC office.

Mr. Sergei Faschevsky – “Financial Engineering for Small Hydropower Plants in Georgia” project manager from Norwegian companies – ENSI International presented to participants the home work to be prepared for the following training sessions.
 

Mr. Orjan Teigen, Project manager,  ENSI- Energy  International AS Aims and objectives for the Financial Engineering programme for Small Hydropower Projects.	Mrs. Manana Dadiani, Renewable energy Expert , Energy Efficiency Centre - Today’s status of the SHP developments in Georgia, Energy Law amendments.
Mr. Orjan Teigen, Project manager,  ENSI- Energy  International AS - Cash flows calculation presentation	Mr  Sandro Menabde - Tbilisi Aircraft manufacturing - Local Hydro Power Turbine   Manufacturing.
Mrs.Anita Kalov and Nino Shanidze - Project Coordinator, from German  Development Bank KfW - Promotion of renewable energy	Mr. Sergei Fashevsky – Project manager, ENSI - Energy International AS. Business planning presentation.
Mr. George Naskidashvili awarded to participants credit conditions of the Bank of Georgia and expresses the interest to invest small hydro projects.	Trainees during the exercise calculation.
Trainees during the exercise calculation.	Training was really interesting

Location of SHP projects presented during the 1-st session

 

NN	Name of SHP Project	Contact person	Company
1	Mirashkhani SHP	Suliko Melkidze	Joint Responsibility Company” Sami”
2	Patara Tetrikhevi SHP	David Megrelishvili	Impulse Ltd.
3	Patara Shaori SHP	Tengiz Bubashvili	Sole Entrepreneur
4	Achi SHP	Vakhtang Berishvili	CBO "Liakhuri”
5	Tbeti SHP	Anzor Gogitidze	Ltd ”Argo XXI”
6	Chkheri SHP	Malkhaz Miminoshvili	Rachkha SHP
7	Zonkari SHP	Malkhaz Miminoshvili
8	Pharavani SHP	;Goderdzi Kiasashvili	Ltd” Energia”
9	MOS 99 SHP	;Goderdzi Kiasashvili	Ltd” Energia”
10	Tetritsklebi SHP	Mikheil Natsvlishvili	Ltd “Ekomari”
11	Nabeglavi 1 SHP	Iasha Kharaishvili	Ltd” Energia”
12	Nabeglavi 2 SHP	Iasha Kharaishvili	Ltd” Energia”
13	Rachkha SHP	Jemal Kukhalashvili	Ltd “ Avtobani”
14	Chveshura SHP	Gogi Jimsheleishvili	NGO “Samamo”
15	Uraveli SHP	Roman Maisuradze	Sole Entrepreneur
16	Mukhrovani SHP	Levan Kobakhidze	“Leri" Ltd
17	Borjomula SHP	Tamar Chanturidze	“Intellect service” Ltd
18	Mletis SHP	Tamar Chanturidze	“Intellect service” Ltd

The second session was planned to organize for 28-29-30, November 2006.