Different Scenarios of Investments in Georgia’s Energy Sector

Abstract

Various types of recent research point out the fact that Georgia’s energy sector (and  in particular hydro energy sector) is one of the most attractive ones when it comes to investment opportunities. Hydro power remains the cheapest and the most “ecofriendly” source of power for Georgia. An essential part of Georgia’s hydro energy potential is still untapped (in fact, the current electricity generation represents just about 40% of Georgia’s estimated annual hydropower output potential). Currently, Ministry of Energy of Georgia has more than 60 HPP projects available for investment. For every potential investor, it is of vital importance to have general knowledge about what to expect from the desired sector, what the risks that could hurt the success of the investment are and if the expected rate of return equals or exceeds his or her required rate of return. This article is based on our previous article and develops three different scenarios for
investment opportunities in Georgia’s Hydro Energy sector. For all three scenarios expectations are evaluated and sensitivity analysis is provided.
Keywords: energy sector, investment, hydro energy
JEL: G17