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Georgian Co-Investment Fund makes first investment in USD98m hydro power project

Private equity fund GCF has acquired 100 per cent ownership of Mktvari HPP project, a Georgian hydro power plant project, from JSC Caucasus Energy and Infrastructure (CEI). 

The project’s total investment value is USD98m and its objective is to develop a hydro power plant with 53.3MW of total installed capacity.
An initial stage of construction work costing approximately USD22m has already been completed and GCF intends to commence the next phase immediately, with all works estimated to be finished by the end of 2017.  This would include construction of the power house and reservoir, completion of tunnelling works, enlargement of intake dimensions and the raising of the surge top elevation.  
A number of international engineering and construction consultants were commissioned to carry out due diligence for the project.  The feasibility study was carried out by Verkis, an Iceland-based engineer consultancy, and the detailed design was conducted by UkrHydroProject, a Ukraine design and engineering consultancy.  The technical due diligence was carried out by Hydro Dizayn, Turkey’s fastest growing engineering company specialising in hydropower projects. The international law firm Dechert Georgia assisted GCF in this acquisition under the leadership of its partner, Nicola Mariani.
George Bachiashvili, CEO of GCF, says: “We are pleased to announce the first investment by the Georgian Co-Investment Fund in Georgia – the investment reflects our long-term commitment to the country’s energy sector.  In addition to the benefits brought to the nation’s energy infrastructure, the Mtkvari project will also create over 100 new jobs and comply with international environmental and engineering standards, which is in line with our stated commitment to establish top quality enterprises in Georgia. This transaction demonstrates our dedication to provide superior value to our investors and strengthen Georgia’s position as a developing player in the regional energy market.”
Irakli Menabde, managing director of energy and infrastructure at GCF, says: "We are pleased to assume ownership of Mtkvari. The valuation, the quality of the asset and its export potential into the Turkish power market were the major factors in our decision to invest. We are fully dedicated to achieving a timely completion of the remaining work required to bring the asset to generate at its full capacity and we believe this project will further strengthen Georgia's profile as a growing electricity exporter in the region.”

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