A nation that intends to grow

A nation that intends to grow

Lello Stelletti
Interview with Kakha Kaladze, Georgia's Minister of Energy. In the words of the Georgian government representative, the plans and prospects for the development of new energy projects that the Euro-Asian country proposes to implement, first and foremost, its participation in the construction of the great Southern Corridor for transporting Azerbaijani gas to Europe

Georgia has set a priority: to increase its electricity production. To date, the country remains heavily tied to imports which, as regards oil, account for 100% of its requirements. For this reason, the Georgian authorities, represented, in this interview, by Energy Minister Kakha Kaladze, have set themselves the short-term goal of launching a major energy turning point that aims to exploit local renewable resources, mainly hydropower resources. Added to this is the country’s participation in infrastructural projects concerning the construction of the Southern Gas Corridor, which will transport gas from the large Shah Deniz gas field in Azerbaijan, to the heart of Europe. The new supplies should guarantee the government in Tbilisi to ensure a sufficient flow of gas, against a progressive decline in imports of this resource from Russia

Mr. Minister, what is your opinion on the cooperation in the energy industry between Georgia and Italy, partly in light of your recent visit to Italy with Prime Minister Giorgi Kvirikashvili? Are there opportunities for developing the untapped potential?

The Georgian government team’s visit to Italy, led by the Prime Minister, was an important step in promoting the cooperation between the two countries. Special attention was paid to economic and commercial opportunities. I am well aware of the technological and financial capabilities of Italian companies and I confirm that they are invited to participate in large-scale energy projects. I also believe that Georgia is an attractive and interesting country for exploiting the hydropower potential and that of other renewable energy sources and, of course, we will continue to cooperate closely in this direction.

Georgia is participating in one of the main energy projects currently in progress, the Southern Gas Corridor. What is Georgia's contribution to the project? How important is the project for the diversification of supplies intended for the European market?

The Development of the Southern Gas Corridor is recognized as a priority for increasing Europe’s energy security and, of course, Georgia, which is involved in this process as a transit country, welcomes similar projects in the region. We are already in the second stage of the development of Azerbaijan’s Shah Deniz gas field and, within our country, work is being done on expanding the South Caucasus Pipeline, most of which have been completed: $2 billion invested, employment of local staff, possibility of increasing the amount of gas supplies from Azerbaijan. Of course, there are benefits for our country, therefore increasing Georgia’s energy security and role in the transit process. This project and the development of the Southern Gas Corridor may supply the European market with new resources from the Caspian Sea, not only from Azerbaijan, but also in the future from Turkmenistan.

Kakha Kaladze

Kakha Kaladze

Minister of Energy, and Deputy Prime Minister of Georgia

Former football player, holds the position of Minister of Energy, and Deputy Prime Minister of Georgia since 2012, after re-election in November 2016. He is also General Secretary of the "Georgian Dream" party.

The government has promised a sustainable development plan, specifically, in the exploitation of renewables. What are the main investment opportunities that Georgia offers in this energy sector? Are there also projects under assessment in other sectors, such as coal or hydrocarbons, in addition to hydropower and wind power?

Georgia is heavily dependent on imports. Oil and natural gas are 100 percent imported. Moreover, for 8-9 months per year, electricity imports are carried out by neighboring countries. Taking into account the growing demand and unexploited hydropower resources, the priority in energy policy is to produce electricity, using local renewable resources, mainly from hydropower sources. 600 power stations have already been added to the network. Other projects are being developed at various stages that will add another 4,000 megawatts of power. With the construction of the new plants, the growing demand for electricity will be met and, at the same time, we will be able to export excess energy to neighboring countries. We have a ten-year plan for the development of energy infrastructure, in both the electricity and gas sectors. In Georgia, the first wind farm is in operation, with 20 megawatts of power, and we are in the process of researching the construction of the first solar power plant. To increase energy security and reduce dependence on imports, we are also considering the construction of thermoelectric power plants.

In addition to the Southern Gas Corridor, are there other prospects for energy coordination with neighboring countries? In this context, is the Eastern Partnership platform, which also involves Azerbaijan and Georgia, a useful tool?

We have a strategic partnership with Azerbaijan, in both a bilateral and multilateral format. Azerbaijani state-owned company SOCAR is the main gas supplier on the Georgian market and also carries out distribution activities. It also has gas and gasoline stations. SOCAR is one of the largest investors in Georgia. It has also started to transport electricity to Turkey via Georgia. The Eastern Partnership format is a good tool for closer cooperation between countries and we are happy to welcome this tool effectively.

With certain neighboring countries, there are still problems that do not directly concern the energy industry, such as with Russia. However, Georgia regularly procures gas from Russia, as also emerged from the two-year agreement signed in January with Gazprom. Could gas become a "turnkey" for resolving problems that emerged following the conflict in 2008?

Georgia has gradually reduced its dependence on Russian gas and its share fluctuates between 5 and 10 percent. Moreover, Russian gas has been supplied to Armenia, via Georgia. We are seeking to maintain our energy relations with neighboring countries through a commercial model and, in this way, ensure stable energy supplies in the long term.

Georgia can rely on a major partner, the United States, with which, in 2009, it signed a strategic alliance agreement that strengthens the cooperation between the two countries, especially as regards energy and defense, and lays the foundations for the development of new European energy supplies, which excludes gas from Azerbaijan and Central Asia. With the changes that have occurred in the White House and the arrival of the new administration led by Donald Trump, do you think changes may occur in this relationship?

The Georgia-United States strategic partnership is not threatened by any kind of danger. On the contrary, both parties, both Georgia and the new U.S. administration, express their willingness for closer cooperation. For us, our relationship with the United States, based on the traditions and history of friendship that binds these two countries, is key, and, this is the basis on which we further develop our already close relationships.