…and, the locals of the Rioni Gorge.
And ENKA Renewables.
And possibly Georgia-Turkey relations as a whole?
A lot is at stake. Livelihoods, political careers, and international relationships hinge on the construction — or, cancellation — of the Namakhvani Hydroelectric Power Plant Cascade Project (HPP) on the Rioni River in Imereti.
With Natia Turnava doubling-down on her intentions to follow through with construction — and protests erupting over the weekend in Kutaisi — it seems like the clash between locals, the Ministry of Economy, and the Turkish multinational ENKA is reaching a boiling point.
Someone has to give in, but who?
I don’t think it will be Natia Turnava. Why? Because I believe that she has staked her entire reputation as Minister of Economy and Sustainable Development on seeing through with the project. And, with Irakli Gharibashvili confirmed as Prime Minister last week amidst an ongoing political crisis — there is no room for mistakes by — or, concessions from — his Cabinet.
There is little doubt in my mind that any delays, concessions, and/or — although unlikely — the cancellation of the Namakhvani HPP would inevitably result in the resignation of Turnava. In fact, there were already rumors circulating about it last month on social media.
Which, of course, she denied.
First, some background:
The Namakhvani HPP was announced way back in 2017, but public debates surrounding alternative locations really began in 2015 after Enguri Dam in Jvari began supplying more power to the breakaway region of Abkhazia. About 17.3% of its total electricity generated in 2015 went to this occupied territory, thus prompting conversations in Parliament about building subsequent dams in Svaneti, Samegrelo, and Imereti to recuperate from these losses.
Multiple locations were identified on the Nenskra, Enguri, and Rioni rivers, leading to a variety of proposed dams— some utilizing pre-existing infrastructure: (1) Khudoni HPP, (2) Oni Cascade HPP, (3) Nenskra HPP, and (4) Namakhvani Cascade HPP.
Namakhvani was the only location decided on.
Turnava claims that a set of cascading dams in Namakhvani will supply Georgia with 12% of its energy needs by 2024 — a claim that has been disputed by activists groups, as they allege the 25 required scientific studies requested on the economic viability and environmental suitability of the project were never performed by the government.
If this claim is true, it will offset any and all annual losses of the Enguri Dam in supplying energy to Abkhazia.
After 26 multinational construction and engineering companies submitted proposals to build two plants (333 MW & 100 MW) in Namakhvani, a Build, Own, & Operate Agreement was signed between ENKA and the Government of Georgia on 19 April 2019, just one day after Natia Turnava began her term as Minister of Economy.
The 15-year Power Purchase Agreement (PPA) stipulates that all energy generated between Sept.-April can be distributed by Georgia as it sees fit, whereas excess power generated between May-Aug. will be exported to Turkey or sold on the domestic market.
This might prove to be economically advantageous for Georgia, as excess energy produced in the summer typically overshadows numbers from the fall and spring. (We have to wait for such projections to be made, but it’s worth keeping an eye on.)
ENKA — and, ENKA Renewables, a subsidiary — is the largest construction company in Turkey and operates in over 30 different countries — including in Georgia as of 2014. It employs approximately 30,000 people in the Caucasus and Middle East, as well as another 170,000 contractors and partners.
It is one of the most significant foreign employers in Georgia.
The Namakhvani project alone will amount to approximately 1,600 jobs in Georgia and $800+ million USD in foreign direct investment, according to ENKA. This is politically important because Georgia is currently dealing with an unemployment crisis that saw its economy shrink by 6.1% in 2020 — largely due to business lost to COVID-19.
“Too few jobs” is one of the biggest concerns of Georgian voters in rural regions, according to recent opinion polls published by the National Democratic Institute (NDI).
I believe that the cancellation of the Namakhvani HPP would indirectly go against the agenda of Gharibashvili — announcing in his nomination address that tackling unemployment was one of his biggest priorities for 2021.
This could be politically disastrous in urban areas for Georgian Dream.
Not so much in rural regions, where opposition to the project outweighs popular support.
Although ENKA is privately owned and publicly traded on the Istanbul Stock Exchange (IST), the Turkish government maintains a significant interest in its operations. Its foreign contracts are often seen as geopolitically valuable negotiating leverage.
So clearly, this plant system is a big deal for both Georgia *and* Turkey.
However, there are a lot of problems with this location that have drawn sharp criticism from opposition parties, environmental activists, and locals in Imereti.
The most notable impact is that three villages in the Tsqaltubo Municipality of Imereti will be submerged by the reservoir — including lands used by two other villages — internally displacing approximately 300 households and destroying generations of infrastructure.
“People will become migrants in their own country,” alleges Giorgi Ptskialadze of the Greens Party.
Environmental activists also argue that the dam system will irreversibly damage the region’s biodiversity, existing infrastructure, cultural heritage, and tourism industry.
Another issue is that the planned dam locations are on the fault lines of a highly seismic zone. Some reports indicate that even a minor earthquake could shatter the dam — flooding Kutaisi within 20 minutes as well as 18 other villages in the region.
Natia Turnava denies these claims as “exaggerated.”
She said that “Namakhvani HPP, like any other hydropower plant being built in Georgia, makes an important contribution to the energy security of our country.”
In my opinion, she’s doing so to save face — as indicated by some of the studies that back up the protestors’ arguments about the safety of the dam system. To Turnava, the cancellation of the Namakhvani HPP is more disastrous to her reputation — and the reputation of Georgian Dream — than the potential risks of a catastrophic dam failure.
I believe that the endgame for Georgian Dream here is not necessarily the energy yield from the project or the potential consequences of resettlement, but rather a short-term prioritization of briefly alleviating unemployment — and, raking-in $800 million in foreign direct investment from Turkey — that can be used as a bargaining chip with the opposition.
The cancellation of the Namakhvani HPP will also severely damage relations with Turkey — something Georgia *really* doesn’t want to happen right now, especially as Gharibashvili plans to continue with NATO integration and cooperation meetings in 2021 and 2022.
Any concessions, I believe, will result in the immediate resignation of Natia Turnava. The public pressure on her office to revoke the building permit for ENKA has grown dramatically since Nov. 2020, but becoming an international headline following the eviction of protestors from Namakhvani just last month.
I don’t believe there is any negotiating room for Turnava and those opposed to the construction of the Namakhvani HPP. I believe that she will continue with the plans to construct the plant system by 2024, prompting further outrage in Imereti.
Opposition organizers have claimed that, if she doesn’t revoke ENKA’s permits within two weeks and relocate the project, they will “occupy Kutaisi.”
Although we will see how this develops by mid-March, there are still three years left in the construction timeline — halted by the COVID-19 pandemic — so the opportunity window for change is not necessarily closed. However, rhetoric from both the Ministry of Economy and the protestors indicate that no party is ready to budge on the terms of the Namakhvani HPP.
Further reading and resources:
Namakhvani Hydropower Project - Clean Energy Group
BOO Perpetual Build, Own and Operate Agreement After a transparent and competitive tender process, with 26 companies on…
Namakhvani Hydro Power Plant Cascade Project | ENKA İnşaat ve Sanayi A.Ş.
ENKA and Norway's Clean Energy Group have been awarded the rights to develop, construct, own and operate the Namakhvani…
Thousands turn out for Kutaisi hydropower protest
Protesters gathered on the west-Georgian city's central square on Sunday calling on the authorities to revisit their…
Alexander Leslie is a foreign policy analyst, freelance journalist, and has an M.A. in Eurasian, Russian, & East European Studies from Georgetown University. His interests include U.S.-Georgia relations, energy politics, and studies in counterterrorism policy.
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