Russian energy giants and for a mega dam

A campaign run by lobbyists in favour of the Khudoni hydropower project has recently become more and more aggressive. At stake is the reputation of the investor ‘Transelectrica limited,’ as it was unable to fulfill the conditions of its contract with government in that it failed to receive a construction permit by 1 March 2014. In order to cover this fact up and avoid possible sanctions, project lobbyists are travelling a well-worn road in their propaganda campaign: declaring opponents of the project enemies of the state and as well Russian spies. This rhetoric has been repeated ad nauseum by other notorious figures and their crony ‘experts’ in previous governments headed by Shevardnadze and Saakashvili. We look now to those who deride critics of Khudoni as Russian provocateurs, and highlight how the very same people who cry wolf are in fact directly connected to organisations pursuing Russian state interests in Georgia.

Cooperation between ‘experts’ and hydropower investors has recently taken the form of active foundations of NGOs lobbying for certain sectors or projects. The process has been even more pronounced since former Prime Minister Ivanishvili declared that he was planning to join civil society in order to empower it.

One such example is the case of the ‘National association of energy and environment,’ founded in May 2013 to actively lobby in favour of Khudoni. Its founders are Paata Tsereteli, the General Director of Transelectrica Limited, Gia Arabidze, the Dean of the Energy and Telecommunications faculty at the Technical University of Georgia, Varlam Pantsulaia, the Head of the Public Relations Department of JSC’ ‘Telasi’[1] (owned by the Russian INTER RAO Group); Valerian Kankia, the Financial Director of Ltd Enguri HPP; Zurab Alavidze, the Director of JSC ‘Dariali Energy’; Revo Mshvidobadze, the Chairman of Georgian Energy Veterans Union; Enver Chichua, a former employee of the Ministry of Energy and JSC ‘Georgian Energy System’; Nikoloz Djavshanashvili, the Cofounder of ‘Association of Georgian Young Energists’ and the founder of ‘Youth Organization Supporting Efficient Use of Energy and Natural Resources’; Gaioz Ugrelidze, the Director of Ltd. ‘Energy’, and Omar Kutsnashvili, who is better known as the father of parliamentarian Zakaria Kutsnashvili, who heads the company ‘Geoengineering’. The president of the organization is Omar Kutsnashvili and the Executive Director is Guram Nikolashvili.

According to documents from the public registry, members of the Executive Board are Omar Kutsnashvili, Guram Nikolashvili, Gia Arabidze, Lasha Iordanishvili (of Ltd Peri, which implements various energy projects in Georgia), Baadur Ukleba (a hydrologist and author of a number of environmental impact assessment reports in the energy sector), Volkan Birinch and Sergei Kobtsev (General Director of JSC. ‘Telasi’).

Membership in the association later expanded to include other private and state organisations, including: Ltd Georgian State Eletricitysystem (wholly state owned); ‘Khramhesi 1’,  ‘Khramhesi 2’ and Mtkvari Energy (owned by the Russian State Company Inter RAO[2]), Enguri HPP, Dariali Energy, Energia, and Kazbegi HPP. According to its statute, founders and members of the ‘National Association of Energy and Environment’, including the Russian companies, have the right to donate to the association at will, except membership fee.

Moreover, the vast majority of power generated at the Enguri dam – more than 90 percent – is export-oriented, and one of the organisation that is responsible for the transportation of electricity within the country is JSC ‘Sakrusenergo’[3]. This company was founded by the Georgian government together with United Energy System of Russia in 1996.

Therefore it is hypocritical at best for the director of Khudoni to attack social and environmental NGOs that support those opposing Khudoni, especially in Khaishi, by labeling blaming them Russian spies. Furthermore, other founders and members of these associations are also playing an active role against the opponents of the project, presenting environmentalists as against the development of the country and in service of Russian interests in Georgia.

For example according to the one of the founders of the ‘National Association of Energy and Environment’ Nikoloz Javshanashvili: ‘Instead of promoting development of the country, environmental NGOs are obstructing and hampering processes of strategic importance for the country with their activities. Namely, environmental NGOs are trying and succeeding in misleading locals about the project, resulting in a negative attitude towards the project.’

Another founder of the same organisation, Omar Kutsnashvili, explains that critics of the project stand to benefit financially: ‘If we think about the last 25 years in Georgia, we can assume that people spiteful towards the country will encourage ‘Greens’ to act against the energy and mining industry and readily offer grants for this activity…’ (From the brochure “Who are we and where we should go or about development strategy of Georgia”. The brochure was distributed free of charge; last year it was disseminated on the meeting in the municipality of Kazbegi);

One staunch supporter of Khudoni and chairman of the newly established organisation ‘Georgian Infrastructure Projects Initiative’ presents his ‘green conspiracy theory’. In the article ‘Why is there a struggle against strategic hydropower projects in Georgia? Response of Russia’s new doctrine in Georgia’ he claims that there is a small group of people with ‘anti-globalisation sentiments’ and ‘antagonistic attitudes towards hydro issues’ ‘who deliberately lobby external forces or interests of third parties and have a personal motivation’. Kalandadze considers this small group as the most dangerous factor and the main threat to hydropower development. This group ‘deliberately fights only against hydropower development in the country and against increases in the efficiency of using water resources and…says nothing about the construction of thermal power plants, while protesting the construction of hydropower and energy projects of strategic importance. … They prefer to be silent when the country’s dependency on the Azeri-owned ‘SOCAR’ is significantly increasing, even though it is practically the only importer of natural gas’. Levan Kalandadze finally summarizes that ‘decreaseing the level of hydropower potential in Georgia, hampering the implementation of hydro projects and increasing the dependence of Georgia’s energy system on other countries is in the direct interest of the new energy doctrine of Russia’.

Khudoni project proponents and ‘experts’ have still not provided detailed, credible research-based arguments to prove the profitability of the project. It is ironic that exactly those ‘experts’, backed up and supported by the Russian energy companies discussed above, claim that Khudoni is the solution for energy independence from the Russia. The reality is different: in last 25 years, these astroturfers have looked for Russian spies in environmental groups, while in fact moving the state’s approach to the energy sector even closer to Russia.

[1] JSC ‘Telasi’ is one of the major network companies of Georgia, carrying out distribution and sale of electric power in Tbilisi;
[3] OJSC Federal Network Company of the Unified Energy System (FNC UES of Russia);