What is a Bankable Feasibility Study for a renewable energy project?

It is a comprehensive technical and economic assessment prepared according to international standards. "Bankable" means the study is sufficiently detailed and rigorous for international financial institutions (like EBRD or IFC) to rely upon it when granting loans for the project.

Do I need to measure wind or water for a full year before starting the study?

Yes. For wind farms and hydroelectric projects, international standards require at least 12 months of continuous on-site data collection (wind speed or hydrological data) to accurately forecast the Annual Energy Production (AEP).

Does the feasibility study cover environmental impacts?

Yes, a proper feasibility study includes at least an initial assessment of environmental and social impacts, outlining the costs and timelines for a full Environmental and Social Impact Assessment (ESIA) required by Georgian law.

Can this study help in securing a Contract for Difference (CFD) in Georgia?

Absolutely. To successfully participate in Georgia's renewable energy capacity auctions and secure a CFD, you need an accurate financial model from a feasibility study to determine your minimum viable bidding tariff.

Renewable Energy Feasibility Study in Georgia | Legal.ge

Renewable Energy Project Feasibility Study (Solar, Wind, Hydro): A Comprehensive Guide

The development of renewable energy projects (solar, wind, hydro) is one of the most important strategic directions for Georgia's economy and energy independence. The country's unique geographical location, rich hydropower resources, high solar radiation, and significant wind energy potential create ideal conditions for investors. However, energy projects involve tens of millions of dollars in capital expenditures and high technical, financial, and regulatory risks. The technical and economic justification of a renewable energy project, or a Feasibility Study, is a crucial step before the construction of any power plant (HPP, solar plant, wind farm). It is a comprehensive, multi-component study that assesses the project's technical feasibility, financial profitability, environmental impact, and legal risks. Without an accurate technical and economic justification, it is impossible to reach agreements with government agencies, sign guaranteed Power Purchase Agreements (PPAs), or attract financing from international financial institutions and commercial banks. Therefore, a Feasibility Study protects the investor from unjustified expenses and ensures efficient capital allocation. That is why, before construction work begins, the investor must know exactly how much energy generation will be possible at a specific location and what the Internal Rate of Return (IRR) will be. A Feasibility Study prepared according to international standards is the core document relied upon by all decision-makers, whether private investors or state structures.

What This Service Covers

A Feasibility Study for a renewable energy project combines engineering, economic, and legal disciplines. This service covers the following essential and critical directions:

Resource Potential Assessment: For hydroelectric power plants (HPPs), analyzing hydrological data, water flow, and head; for solar power plants, studying solar radiation and climatic conditions; for wind power plants, measuring wind speed, direction, and turbulence using specialized met masts.
Technical and Engineering Solutions: Conducting topographical and geological surveys, selecting optimal technology and equipment (turbines, panels, inverters). Assessing the feasibility and costs of grid connection to the national electricity network.
Financial Modeling and Economic Analysis: Detailed calculation of capital (CAPEX) and operational (OPEX) expenditures. Forecasting electricity generation and modeling revenues. Calculating key financial indicators: Net Present Value (NPV), Internal Rate of Return (IRR), discounted payback period, and Debt Service Coverage Ratios (DSCR).
Regulatory and Legal Audit: Regularizing land ownership forms, assessing the risks of obtaining zoning and construction permits. Analyzing compliance with state support mechanisms (CFD - Contracts for Difference, PPA).
Environmental and Social Impact Assessment (ESIA): Studying the project's potential impact on biodiversity, forest funds, water resources, and the local population, as well as developing appropriate mitigation strategies.

Common Practical Scenarios

Evaluating renewable energy projects is essential in many different practical situations. The most typical cases include:

Attracting Loans from International Financial Institutions: When an investor plans to receive funding from organizations such as the European Bank for Reconstruction and Development (EBRD), the Asian Development Bank (ADB), or the International Finance Corporation (IFC). These institutions require an independent Feasibility Study that meets international standards.
Signing a Memorandum of Understanding (MoU) with the Government: Before signing an MoU with the Ministry of Economy and Sustainable Development of Georgia and approving the project in a Public-Private Partnership (PPP) format, the developer must submit a preliminary feasibility study of the facility.
Participating in Capacity Auctions: To obtain state support when auctions for renewable energy projects (Capacity Auctions / CFD) are announced, an investor needs an accurate financial model to determine the minimum acceptable tariff.
Divesting the Project or Finding a New Partner: When an existing developer wants to sell a share of the project (M&A transaction) or create a Joint Venture. The buyer and partner make their decisions based precisely on the results of the Feasibility Study.
Installing Autonomous Solar Plants for Business: Large industrial facilities (e.g., wineries, hotels, factories) evaluate the feasibility of installing solar panels on their roofs or adjacent territories to reduce electricity costs (Net Metering system).

Georgian Legislative and Regulatory Framework

The technical and economic justification of renewable energy projects is closely intertwined with current Georgian legislation. The main regulatory framework is based on the Law of Georgia on Energy and Water Supply, which defines the market structure and the rules for energy activities. Since large energy facilities represent areas of public interest, their development is often regulated by the Law of Georgia on Public-Private Partnerships, which mandates a compulsory assessment of the project's value for money and fiscal risks.

Significant attention is paid to environmental regulations. The construction of hydroelectric power plants (including small HPPs), large-scale solar parks, and wind turbines is subject to the Environmental Assessment Code of Georgia. The Feasibility Study must take into account the costs and timelines associated with the Environmental Impact Assessment (EIA) procedure. Property issues, land acquisition, lease, and surface rights are regulated on the basis of the Civil Code of Georgia, while taxation regimes and tax liabilities (including the specifics of Value Added Tax in the energy sector) are modeled in accordance with the Tax Code of Georgia. The process also incorporates the regulations of the National Bank of Georgia regarding the management of foreign currency risks.

Stages of the Process

Preparing a professional technical and economic justification requires a strictly defined, phased approach:

Initial Research (Pre-Feasibility / Scoping): Identifying potential locations, conducting a desk study of available resources (water, sun, wind), and assessing preliminary grid connection capabilities.
Field Measurements and Technical Study: Geological drilling, topographical surveying, installation of wind masts or solar sensors, and collecting at least 12 months of data (especially for wind and hydro).
Engineering Design Development: Creating a Conceptual Design of the facility, determining equipment specifications, and simulating the Annual Energy Production (AEP) with P50, P75, and P90 probabilities.
Financial Model Construction: Compiling the full budget, assessing operational costs, analyzing tariffs, and preparing a financial model compliant with banking standards.
Risk Analysis and Final Report: Conducting a Sensitivity Analysis and preparing a comprehensive Bankable Feasibility Study for investors and banks.

Why Choose Legal.ge Specialists

Evaluating renewable energy projects through a Feasibility Study is one of the most complex and specific processes that requires mastery of international standards at the highest level. Legal.ge is a platform that connects investors with Georgia's leading technical consultants, certified financial analysts, energy sector experts, and legal advisors. The verified specialists represented on Legal.ge have years of experience in designing and evaluating HPPs, wind farms, and solar power plants. The "Bankable" documentation prepared by experts found on our platform directly meets the requirements of international donors and the Government of Georgia. Find your specialist on Legal.ge to ensure accurate identification of energy project risks and the successful implementation of your investment.