12/05/2020 magda

Regional Cooperation in Electricity Sector: Challenges and Opportunities for Georgia

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This policy brief analyzes multiple paths Georgia may take to strengthen its energy security and enhance regional cooperation in the electricity sector. The growing demand for electricity has gradually increased the country’s dependency on imported energy and must prioritize investment into power generation. Because it is a small country with limited access to global energy markets, Georgia must be able to provide state-level guarantees and be able to ensure regional cooperation in order to attract necessary investmentsand reduce overall costs. Becoming a contracting party of the Energy Community Treaty (EnCT) would enable Georgia to become a bridge from South Caucasus to the EU. To this end, Turkey plays a crucial role in enhancing Georgia’s cross-border trading opportunities. Besides of being largest energy consuming country in the region, in both short and medium terms Turkey is the only option for Georgia to connect its power grid with the EU. Therefore, in parallel with domestic market reforms, Georgia needs to update the existing cross-border cooperation framework with Turkey and at the same time strengthen bilateral cooperation in the electricity sector with its other neighbors.