GGU Energy and Water Utilities Investment Overview
Utilities in Georgia - largely private, reforms in progress
Utility sector in is largely privatized with high barriers to entry; reforms in progress for approximating the sector with the EU regulations
Utilities sector represents -3% of total economic output in Georgia
and is constantly growing at a sustainable rate (CAGR 8.3% in 2006
-2016)
1,800
mn, GEL
1,600
1,400
1,200
1,000
800
600
400
Large part of the industry is privatized, except for the fraction of
WSS utilities and irrigation
200
0
Bulk of sector players are natural monopolies and the barriers to
entry are high
CAGR 8.3 %
1,589
Reforms are in progress in utilities sector to approximate the sector
with EU energy regulations in accordance to Georgia's undertaking
under the Association Agreement with the EU
Output of economy, Utilities
Source: Geostat
Georgia's utility sector is regulated by an independent regulator that sets tariffs, manages licenses, mediates disputes and imposes sanctions
Georgian National Energy and Water Supply Regulatory Commission
(GNERC) is an independent body that regulates the utilities market
GNERC is independent from the Government of Georgia and has no
direct supervision from any state authorities and its independence is
guaranteed by a legally mandated, self-sufficient revenue stream from
the regulation fees paid by utility market participants (0.3% of the
utility revenues)
The sector is regulated by the set of laws, by-laws and government
decrees on tariff setting, utilities (water, electricity, natural gas) market
rules, grid/network codes, legislation on licensing, resource extraction
and environmental accountability
GGU
October 2017
Tariff regulation
Elements of regulatory discretion
GNERC
MoEn
MRDI
MoA
MENR
Resource extraction
Infrastructure development
Licensing
Drinking water quality control
National policy development
Dispute mediation
Sanction imposition
MRDI - Ministry of Regional
Development and Infrastructure
MoEn - Ministry of Energy
MoA Ministry of Agriculture
MENR- Ministry of Environment and Natural Resources
page 22View entire presentation