Why a hydroelectric plant requires a licence
A hydroelectric plant is an electricity generation object, and generation is among the licensable activities defined by Article 11 of the Georgian Law on Electricity and Gas Supply. The Commission issues licences in accordance with the Georgian Law on Licences and Permits and the conditions provided by the Electricity Law: in the electricity sector these are the generation, transmission and distribution of electricity and the operation of the electricity market. Paragraph 2 of the same article prohibits carrying out a licensable activity without a valid licence issued by the Commission — the licence gives the enterprise the right to carry on the corresponding activity.
The exceptions matter to an HPP developer as well: no licence is required for generation of electricity solely for one's own consumption (household and/or non-household) where the object of generation and consumption is not connected to the network; for generation at the time of acceptance of the object into operation under Article 36 of the law; for generation by small and micro capacity power plants; and for the activity of a closed distribution system operator holding that status by Commission decision. In addition, a small capacity power plant or energy enterprise carrying out supply, trading or the administration of a bilateral contracts platform without a licence is obliged to declare this under Article 102 of the law.
Licence conditions — what the seeker must establish
Under Article 12, the Commission issues a licence to an enterprise that satisfies the conditions established by the Law on Licences and Permits, the Electricity Law and the licensing rules approved by the Commission. Through the documentation provided by Article 13, the licence seeker must establish the following capabilities of the enterprise: technical, economic, financial and operational (human resources) capabilities necessary for performing the functions related to the licensable activity and defined by Georgian legislation; the capability to take all measures necessary to ensure the quality of the services to be provided; and the capability to duly perform other obligations established by legislation for the respective activity.
In the field of energy activity the seeker must also, in the respective cases, establish the capability to perform the public service obligations defined by Article 9 of the law. These capabilities are mandatory licence conditions: if the seeker cannot prove their existence, the Commission will not issue the licence. The licensee, for its part, must ensure the proper performance of the licence conditions throughout the entire period of validity of the licence; during its supervision the Commission may request documents confirming the satisfaction of those conditions, and failure to comply with such a request is deemed a violation of the licence conditions and entails liability under the Law on Licences and Permits and the Electricity Law.
Application documentation
Paragraph 2 of Article 13 lists the documents that the seeker of an HPP generation licence must submit to the Commission with the application. These are: documents confirming ownership of the electricity devices necessary for the specific activity, or documents confirming the right to use such devices (where necessary, the Commission may require the extension of the right of temporary ownership for a minimum period determined by it); documents confirming the acceptance of the devices into operation, where this is required by legislation, and/or documents confirming the compliance of their condition with the technical requirements provided by Article 97 of the law; documents confirming ownership of the means necessary for the activity — including the means necessary for providing connected services to market participants.
For a generation licence the following must also be submitted: the single-line scheme and plan of the electrical network held by the energy enterprise; the technical condition for connection to the network, where the activity requires connection, or — where a connection exists — information on the technical parameters of the connection point confirmed by the operator of the respective network; the environmental decision provided by the Environmental Assessment Code, where it is mandatory (from 1 September 2026 the law also provides for the submission of an integrated environmental permit); the list of operating assets with their values and the audit report on the financial statements; and information on the organizational structure, with documents confirming qualified human resources or the performance of the respective functions through third parties.
Issuance procedure, refusal and appeal
The licence is issued in a transparent, objective, legally substantiated and non-discriminatory manner. The Commission publishes on its website the complete list of documents to be submitted, the regulatory acts, the authorized bodies and the standard forms. Issuance is confirmed by a licence certificate, which must indicate the licence holder, the licensed activity, the services to be provided, the location of the main assets, the area of validity of the licence and the date of issuance.
A licence may be refused only on a ground established by legislation; the refusal must be substantiated, non-discriminatory and duly explained to the seeker. A refusal may be appealed under the established procedure, and every such case must be notified by the Commission to the Secretariat of the Energy Community.
Duration and territorial scope of the licence
Article 15 determines the temporal and spatial regime of the licence, and for an HPP it yields three important conclusions. First: the licences provided by the law are issued for an indefinite term — a generation licence has no expiry date. Second: exclusive rights and territorial restriction attach to market-operation and network-type licences — for example, only one licence may be issued for the operation of the respective segment of the electricity market or of the natural gas market, granting an exclusive right on the territory of Georgia, while transmission, distribution, natural gas transmission and distribution, gas storage system operation and water supply licences grant exclusive rights in a defined geographical or administrative area, with only one licence per area. Third: apart from what is thus provided, the number of other licences in the field of energy activity is not limited — the number of generation licences is determined by the market itself. A hydro plant's licence is therefore indefinite, neither an exclusive territorial right nor quantitatively restricted.