Renewable Energy Business Overview
GEORGIA'S KEY ECONOMIC DRIVERS
GEORGIA
CAPITAL
Liberal
economic policy
Regional
logistics and
tourism hub
Top performer globally in WB Doing Business over the past 12 years
Liberty Act (effective January 2014) ensures a credible fiscal framework; Fiscal deficit/GDP capped at 3%; Public debt/GDP capped at 60%.
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Following the emergency clause activation after the COVID-19 shock, the fiscal framework will return within the rule bounds in three years, as specified in the Liberty Act;
Business friendly environment and low tax regime (attested by favourable international rankings);
A natural transport and logistics hub, connecting land-locked energy rich countries in the east and European markets in the west
Access to a market of 2.8 billion customers without customs duties: Free trade agreements with EU, China, Hong Kong, CIS and Turkey and GSP with USA, Canada, Japan, Norway and
Switzerland; FTA with Israel and India under consideration.
Tourism inflows fell sharply to US$ 542 million in 2020 from US$ 3.2 billion in 2019 due to COVID-19, but tourism is expected to bounce back once the pandemic is brought under control;
Regional energy transit corridor accounting for 1.6% of the world's oil and gas transit volumes.
An influx of foreign investors on the back of the economic reforms have boosted productivity and accelerated growth
Strong FDI
Support from
international
community
Electricity
transit hub
potential
Political
environment
stabilised
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FDI stood at US$ 617 million (3.9% of GDP) in 2020 (FDI was lowered by a one-off transfer of ownership worth US$ 340.5 million).
FDI averaged 8.1% of GDP in 2010-2020.
Georgia and the EU signed an Association Agreement and DCFTA in June 2014
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Visa-free travel to the EU is another major success in Georgian foreign policy. Georgian passport holders were granted free visa entrance to the EU countries from 28 March 2017.
Discussions commenced with the USA to drive inward investments and exports.
Strong political support from NATO, EU, US, UN and member of WTO since 2000; Substantial support from DFIs, the US and EU.
Developed, stable and competitively priced energy sector
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Only 20% of hydropower capacity utilized; 155 renewable (HPPS/WPPS/SPPS) energy power plants are in various stages of construction or development.
Georgia imports natural gas mainly from Azerbaijan.
Significantly boosted transmission capacity in recent years, a new 400 kV line to Turkey and 500 kV line to Azerbaijan built, other transmission lines to Armenia and Russia upgraded.
Additional 2,000 MW transmission capacity development in the pipeline, facilitating cross-border electricity trade and energy swaps to Eastern Europe.
Georgia underscored its commitment to European values by securing a democratic transfer of political power in successive parliamentary, presidential, and local elections and by
signing an Association Agreement and free trade agreement with the EU.
New constitution amendments passed in 2013 to enhance governing responsibility of Parliament and reduce the powers of the Presidency.
Continued economic relationship with Russia, although economic dependence is relatively low.
Russia began issuing visas to Georgians in March 2009; Georgia abolished visa requirements for Russians - Russia announced the easing of visa procedures for Georgian's citizens
effective December 23, 2015.
Direct flights between the two countries resumed in January 2010. However, they have been banned again since July 2019 following the decision from Russia.
Member of WTO since 2000, allowed Russia's access to WTO; In 2013 trade restored with Russia.
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In 2020, Russia accounted for 13% of Georgia's exports and 11% of imports.
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