Complaint on the Shuakhevi Hydropower Plant project

Independent Mechanisms

  • Complainants : CEE Bankwatch Network, Green Alternative
  • International Financial Institution: European Bank for Reconstruction and Development,
  • Case name : Shuakhevi Hydropower Plant project
  • Project developer: Adjaristsqali Georgia LLC
  • Case Number : 2019/01

Complaint :

In October 2013 the EBRD disclosed project information on its web site together with the project ESIA. This information suggested that the bank is considering extending a senior loan to Adjaristsqali Georgia LLC of up to USD 110 million (EUR 83 million).

According to the Shuakhevi HPP PSD, the project is for a senior EBRD loan of up to USD 86.5 million (EUR 63.7 million) for the financing of the development, construction and operation of the Shuakhevi HPP. The total project cost is reported in the PSD as USD 417 million (EUR 307 million).

The Asian Development Bank (ADB) and the International Finance Corporation (IFC) have co-financed the project. An EBRD press release from 19 March 2015 reports that the EBRD’s investment is USD 90 million4: “The $250 million debt financing arranged by IFC represents the largest-ever private hydropower investment in Georgia, consisting of two $90 million long-term senior loans, one each from ADB and EBRD, and $70 million from IFC. IFC’s total investment in this project is $104 million, which includes a $34 million equity investment in the project company.”

The Compliance Review Expert has concluded that the Bank did not comply with the ESP in the following four respects:

  • The Bank did not comply with PR 1 because the ESIA and related Project documentation do not clearly and consistently identify the Project’s area of influence;
  • The Bank did not comply with PR 4, because the Bank did not ensure that an extensive testing programme during excavation works for the tunnels was set up, including tests to cover rock stability issues and rock behaviour in permanent contact with water, in order to sufficiently mitigate the risk of tunnel collapses;
  • The Bank did not comply with PR 4.16 because it did not take measures to ensure that AGL avoided or minimised adverse impacts on local water resources, including the establishment of baseline data regarding spring water and validation of inferences and conclusions;
  • The Bank did not comply with PR 6 because the Bank’s monitoring of AGL’s implementation of the BAP did not ensure on an ongoing and consistent basis that the Project was achieving no net loss of biodiversity.

Compliance assessment :

Final Compliance Review Report
Shuakhevi HPP – EBRD Project Number 45335, Case 2019/01, May 2022

Materials :