Georgia’s main power grid for sale by Czech company

Georgia’s main power grid for sale by Czech company

PRAGUE - Reuters
Georgia’s main power grid for sale by Czech company Georgia’s main electricity grid and 15 hydro power plants are for sale by their owner Czech privately-held Energo-Pro, the company said on Aug. 12.

Energo-Pro runs Geortia’s largest grid with 51 percent market share and over a million customers, the hydro plants with 480 MW capacity and a 110 MW gas-fired plant.

“Our advisers value the assets at higher single hundreds of millions of dollars,” the company said in e-mailed response to questions.
“In the current situation, when domestic electricity prices are rising and demand for power in neighboring Turkey is not being met, the value of our assets could exceed $1 billion.”

Energo Pro has been building its Georgian power portfolio since 2007.

“We certainly do not want to leave Georgia completely, but we are trying to lower our overly dominant position in the country,” it said. “We want to go via the route of territorial diversification and further focus on our main activity which is hydroelectric power.”

Energo-Pro said it aimed to close the deal -- which may involve some or all of the assets -- in the first quarter next year.

Potential buyers came from neighboring and other Asian countries, the company said.

Advisers are TD2 Capital Management from London, Encor Capital Management from Prague and Raiffeisenbank, it said.

Energo-Pro, owned by Jaromir Tesar and Jiri Krusina, operates mainly hydro plants in the Czech Republic, Bulgaria, Turkey, Georgia and Armenia with annual production of 4 TWh.

Georgian government sources told Reuters that one of the reasons for the sale was the only partial fulfilment of Energo-PRO’s demands that the Georgian National Energy and Water Supply Regulatory Commission raise electricity prices.

Krusina told Czech daily Hospodarske Noviny that the regulator followed the same rules as its European peers and relations with the authorities were not a reason for the sale.