The Tkibuli Coal Power Station, Georgia

Briefing | November 30, 2002

Background Information

The Greens Movement of Georgia and FoE Georgia are in the process of planning a campaign against the construction of a new coal power station that is supposed to be built in Tkibuli, a city in western Georgia. This campaign is being conducted by CEE Bankwatch Network and the energy/climate change sections of Foe Georgia.

Short History

Construction plans for the Tkibuli Coal Power Station were initiated three or four years ago, when the Georgian government became interested in rehabilitating the Tkibuli coal mines. The idea arose out of the government's desire to find a market for Tkibuli coal, a very low quality coal that has proven difficult to sell. A new coal-fuelled power station, the government reasoned, would solve this problem because the low quality coal would serve to fuel the station.

A second problem the government faced was finding investment for the coal plant. Because Georgia is rich in renewable energy and is geographically located in an area with inexpensive natural gas, American and British investors had already invested into renewables and gas turbines rather than into the coal mining industry. But finally in 1999, the Georgian government (Ministry of Urbanisation and Housing) found Slovak partners who agreed to jointly realise the power plant project.

Brief Description of the Problem

On 16 September 1999, the President of Georgia issued a Decree stating that the Tkibuli Coal Power Station would be built (250mwt total capacity; two blocks - 2X125mwt). According to the Decree, the two companies in charge of the project were to be the Georgian-Slovak company Georgian Energy Group and the Slovak company Istroenergogroup, Ink Levitse.

The Decree obliges several ministries to facilitate the construction of the plant. Specifically, the Ministry of State Property is completely responsible for privatising the coal mines to Istroenergogroup, Ink Levitse. The State Department for Land Management has been given the task of assigning the appropriate parcels of land for the construction. The Ministry of Urbanisation and Housing has been assigned a leading role in implementing the project. Several other ministries have been asked to provide support to the Georgian Energy Group and Istroenergogroup, Ink Levitse in the process of approving the appropriate agreements.

The total investment will be 200 million USD (no source indicated) and will be divided up in the following manner: Reconstruction of Mains (10%), Lending and Construction (30%), Necessary Equipment (60%). Interviews done with the Minister of Urbanisation and Housing, as well as with the Mayor of Tkibuli, explain that the project will be funded by credits from Chase Manhattan Bank and the Slovak EXIM Bank, even though the latter bank has recently pronounced that it has never considered funding any projects in Georgia, let alone this particular project.

If funded by the Chase Manhattan Bank, however, Georgia will as a result have a greater total national debt, for the sake of an economically and environmentally destructive project.

Our Concerns

The Decree for this project is unnecessary as Georgian legislation regulates these types of activities. The fact that there is a Decree indicates that there is a strong lobby of high officials supporting the construction of the plant. a guarantee of state willingness to build the power station.
Both the Environmental Ministry and the Energy Ministry have been totally left out of the project.
Local and international experts claim that the construction of the Tkibuli Coal Power Station is nonsensical from an economic point of view.
We were unable to find out which kinds of technologies would be used for the project, in spite of the fact that the Decree mentions the use of German technologies (no others).
Rehabilitation of the old coal mines and operation of the coal power station will cause new emissions which will further damage the region's forests and agricultural lands.
Rehabilitation of the old coal mines and operation of the coal power station will require large landfills for solid waste disposal (because the quality of coal is so bad, an atypically large landfill site will be required). In addition, the solid waste from Tkibuli coal has a degree of radioactivity.