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Hydroelectric Projects

What is the typical concession period for HPPs?

Georgia typically uses a Build-Own-Operate (BOO) model, where investors own the asset indefinitely, rather than a concession (BOT) model where assets return to the state.

How to secure water rights for a project?

Water rights are secured through a water abstraction permit issued by the Ministry of Environment, based on hydrological studies and environmental impact assessments.

Are there tax incentives for HPPs?

While there are no specific tax holidays, HPPs benefit from general favorable investment conditions and potential VAT exemptions on imported equipment during construction.

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Hydroelectric Projects represent the primary investment direction in Georgia's energy sector. Harnessing the country's rich hydro resources, building new HPPs, and rehabilitating existing ones are of strategic importance for energy security. However, hydroelectric projects are characterized by high technical and legal complexity. Success depends not only on engineering solutions but also on precise adherence to regulatory requirements: land acquisition, water use permits, environmental assessment, and community engagement. For investors, correct risk management at all stages of development is critical.

Energy law specialists represented on the Legal.ge platform offer full legal support for hydroelectric projects. Services include:

  • Legal Due Diligence: Assessing the project's potential from a legal perspective, verifying the validity of existing licenses and permits before investment.
  • Memorandum Management: Drafting and negotiating Memorandums of Understanding (MOU) and Implementation Agreements (IA) with the Government of Georgia.
  • Water Resource Management: Obtaining special water abstraction permits and resolving legal issues related to maintaining environmental flow.
  • Social Impact Management: Developing strategies for community engagement, organizing public hearings, and signing social responsibility agreements.
  • Construction and Operation Stages: Drafting EPC (Engineering, Procurement, Construction) and O&M (Operation and Maintenance) contracts in compliance with international standards (FIDIC).

Legal services for hydroelectric projects are necessary in the following scenarios:

  • A foreign investor plans to acquire a 20 MW HPP project from a local developer. A full legal audit of the project and signing of a Share Purchase Agreement (SPA) are required.
  • During HPP construction, it turns out that privately owned land plots fall within the project area. A lawyer manages the land purchase or expropriation process.
  • An operating HPP faces water level issues leading to reduced generation and breach of the PPA. Force majeure needs to be proven.
  • A company wants to increase the HPP's capacity, requiring an update of the environmental decision and obtaining new permits.

The field is regulated by the Law of Georgia on Electricity and Natural Gas, the Law on Water Usage, and government decrees on promoting energy projects. Also important is the Environmental Assessment Code, which sets out EIA procedures. Hydro projects often benefit from state support, including guaranteed purchase tariffs (PPA) or Contracts for Difference (CFD).

Collaborating with a Legal.ge specialist reduces implementation risks. Hydropower is a long-term business where a correctly defined legal structure from the outset determines viability for decades. Our lawyers will help you successfully implement the project from concept to operation.

Find hydropower law experts on Legal.ge. Our platform gives you access to lawyers experienced in both small and large HPP projects.

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