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KAKHA KALADZE: SOUTHERN TRANSIT ROUTE IS VERY INTERESTING
Photo: REUTERS
Interviews | April 8, 2015 13:51
exclusive
Mediamax's exclusive interview with Georgian Deputy Prime Minister,
Minister of Energy Kakha Kaladze
- Mr. Minister, the issue of privatization of the North-South pipeline
owned by the Georgian government has been raised time and again
over the past few years. In particular, the State Oil Company of
Azerbaijan Republic (SOCAR) has expressed its readiness to purchase
the gas pipeline, and it spurs certain concern in Armenia taking
into account the strained relations with Azerbaijan. What is the
stance of the Georgian government today regarding the future of the
North-South pipeline?
- As far as I know, there has not been any talk on the privatization
of this asset. A few years ago the Oil and Gas Corporation, which
is the owner of this pipeline, was going to conduct Initial Public
Offering (IPO) for a certain number of the company's shares. In the
long run, a decision was passed on the issue of Eurobonds and the
company attracted EUR 250 million at the London Stock Exchange.
I would like to reaffirm that as of now, the Georgian government does
not consider the privatization of this infrastructure. Presently
a transit from Russia to Armenia is carried out, we perform the
operation of gas pipelines and Georgia receives relevant payment for
this service.
- KfW German development bank has agreed to finance the construction of
the new electric main between Armenia and Georgia. Which is the current
status of the project and what significance does it bear for Georgia?
- Our Armenian colleagues have informed us that an agreement has been
reached with KfW German development bank and the necessary credit has
been allocated. In addition, a feasibility study of the project was
conducted by international experts and various technical options of
its implementation were considered.
On the other hand, we have an agreement on the construction of
Armenia-Georgia new electric-power transmission. It was signed
by leading power suppliers in Armenia and Georgia. This agreement
was formulated in its final form in conformity with Supplementary
Agreement N2 of April 16, 2014. The agreement specifies all phases
of construction of power transmission line 500 kW between substation
"Marneuli" and substation "Ayrum" and allocates the construction
obligations between all participating state companies. The first phase
of the project should complete by late 2018, and the second - by 2022.
The participating states are currently jointly thrashing out the
technical details of the new power line and the construction process.
Within the project, substation "Marneuli" will be expanded and enlarged
in the territory of Georgia and will acquire a status of that of a 500
kW, thus becoming one of the major electric power nodes in Georgia. In
the meantime, a state-of-the-art high-voltage direct current (HVDC)
will be constructed in Ayrum, the second in the Caucasus region after
the HVDC in Akhaltsikhe. Along with the new powerful transmission
line from substation "Ksani" to Stepantsminda (Kazbegi) region,
this project will broaden the possibilities of the Georgian power
supply system on energy transit between the Northern and Southern
sub-regions, which will in the end shape our power supply system as
evenly developing and open for transits in all directions.
It will beyond doubt serve as an extra incentive for supporting power
industry commerce and will help us seek after the establishment of
a powerful, modern and attractive electric power market in Georgia.
- Every now and then it is stated that owing to the new line with
Georgia and the three overhead transmission lines with Iran, Georgia
and Iran will carry on power trade through Armenia. Representatives of
Armenia and Iran have issued statements on it, however, the Georgian
government has yet not commented. What do you think about the prospect
of Iran-Georgia power trade through Armenia?
- At this point, we have no particular technical agreements with Iran
on electric power interchange, even more so agreements on deliveries -
export, import and transit.
Kakha Kaladze
Photo: Cbw.ge
On the whole, the southern route of the transit corridor is very
interesting and prospective provided the establishment of relevant
legal environment. The Iranian power supply system is one of the
largest in the region with possibilities for further development and
it is fairly interested in seeking external import sources.
Southern route of the transit corridor is very interesting and
prospective provided the establishment of relevant legal environment
In case of positive development of relations in this sector, the
Iranian power system, along with our other neighbors, might morph
into an active participant of regional electric power market.
- Owing to hydropower projects, Georgia is transforming from
electricity importer into an exporter. What role does the renewable
energy have in the energy strategy of Georgia?
- You are totally right. Georgia is rich in water resources and it
dictates us the main line of development - emphasis on hydro-power
engineering. At the same time, unlike many countries using water
resources, the degree of use of these resources for electric power
purposes does not exceed 20% in Georgia. So there is still room for
improvement and for attracting investments.
By the way, Armenia also has good practice in support for the
development of small HPPs. Over the recent years, Armenia successfully
implemented a number of small hydropower projects. We also have
practical results; new HPPs were put into operation - Paravani, Larsi,
Aragvi, Bakhvi and Kazbegi (total installed capacity up to 130 MW).
Darial HPP and Acharistsqali HPP (total installed capacity up to 300
MW) are the next forthcoming projects.
The construction of the new 400 kW electric power transmission
between Georgia and Turkey (Borcka-Akhaltsikhe) gave additional
impetus to the increase of electric power export volumes. Owing to
the implementation of modern projects, the intersystem deliveries
are carried out not only during the spring-summer season but also
continue during the fall-winter months previously not typical to the
Georgian hydro-power engineering. It is noteworthy that along with
the increase in generating capacities, sustainable growth of power
consumption (on average 4-5% per annum) has been observed in Georgia
over the past years. All these factors make the Georgian energy
market more interesting and attractive and provide an incentive for
its dynamic growth.
- Last summer, you expressed gratitude to the "sister nation of
Armenia" for the support they rendered to Georgia after the power
outage in most of the country. How efficiently do the ministries
of the two countries cooperate? How often do the representatives of
these two ministries meet, and what new projects do they discuss?
- Emergency mutual aid is one of the most important and indispensable
segments of cooperation between the power systems of our neighboring
countries. Despite the level of development, breakdowns occur in all
power systems and a vivid example of it is what happened last year
when our system managed to restore within possible tight deadlines
owing to precisely the support of our Armenian colleagues. Our power
supply systems have a longstanding history of relations and mutual
assistance in various emergency situations. This foundation should be
consolidated and developed under modern conditions, and a cutting-edge
legal-contractual base on the earlier regulated regime of emergency
deliveries (if necessary) should be formed.
We are happy that our Armenian colleagues pay proper attention to
energy security. As far as I know, Armenia has already started the
process of the elaboration and affirmation of the new regulation
on the allocation of functional responsibilities between the market
participants on providing intersystem emergency assistance.
Kakha Kaladze
Photo: REUTERS
As to cooperation and the formats of communication between the
energy sectors of the two countries, we should firstly note the
intergovernmental ties. In only late December 2014, the representatives
of government establishments and experts of Armenia and Georgia
held a working meeting in Yerevan in which representatives of the
ministries of energy and leaders of power supplying companies also took
part. Regular meetings of the leaders of state infrastructure companies
operating in the power industry sector became the norm. These meetings
are held 2-3 times a year, new agreements, contracts and protocols
are formed, new tasks are set and joint prospects are discussed.
Just recently, Georgia passed Amendments to the Law on "Electricity and
Natural Gas" regulating the standards and procedures of the elaboration
and regular update of the 10-year plan aimed at the development of
Georgia's electricity transmission grid. The first such 10-year
plan has already been worked out considering the modern European
requirements and will be approved in the near future. If Armenia
also works out such a long-term plan aimed at the development of the
high-voltage electrical grid, we can then consider the elaboration of
a joint, intersystem Armenian-Georgian 10-year plan covering issues
related to the prospective construction of the interdependent parts
of national power grids.
- Mr. Kaladze, in the past few years the Armenia national team has
significantly improved its positions in FIFA rating and player for
the Armenia national and Borussia Dortmund Henrikh Mkhitaryan has
become one of the most famous persons in Armenia. What contacts do
you maintain with Armenian players and what do you think about the
Armenian football today? Do you think Armenia and Georgia can closely
cooperate in the sphere of football and train the young players?
- During my football career, we have not played against Armenian
football clubs. We once had a friendly match with the Armenia national
in which Georgia scored a victory.
Henrikh Mkhitaryan is indeed a strong, successful and talented
football player
Unfortunately, my work schedule does not let me regularly keep up with
Armenian football, however, Henrikh Mkhitaryan is indeed a strong,
successful and talented football player. I would like to wish luck
to him, the rest of Armenian footballers and the Armenia national.
Ara Tadevosyan talked to Kakha Kaladze
http://www.mediamax.am/en/news/interviews/13764#sthash.Z58S06CX.dpuf
From: A. Papazian
Photo: REUTERS
Interviews | April 8, 2015 13:51
exclusive
Mediamax's exclusive interview with Georgian Deputy Prime Minister,
Minister of Energy Kakha Kaladze
- Mr. Minister, the issue of privatization of the North-South pipeline
owned by the Georgian government has been raised time and again
over the past few years. In particular, the State Oil Company of
Azerbaijan Republic (SOCAR) has expressed its readiness to purchase
the gas pipeline, and it spurs certain concern in Armenia taking
into account the strained relations with Azerbaijan. What is the
stance of the Georgian government today regarding the future of the
North-South pipeline?
- As far as I know, there has not been any talk on the privatization
of this asset. A few years ago the Oil and Gas Corporation, which
is the owner of this pipeline, was going to conduct Initial Public
Offering (IPO) for a certain number of the company's shares. In the
long run, a decision was passed on the issue of Eurobonds and the
company attracted EUR 250 million at the London Stock Exchange.
I would like to reaffirm that as of now, the Georgian government does
not consider the privatization of this infrastructure. Presently
a transit from Russia to Armenia is carried out, we perform the
operation of gas pipelines and Georgia receives relevant payment for
this service.
- KfW German development bank has agreed to finance the construction of
the new electric main between Armenia and Georgia. Which is the current
status of the project and what significance does it bear for Georgia?
- Our Armenian colleagues have informed us that an agreement has been
reached with KfW German development bank and the necessary credit has
been allocated. In addition, a feasibility study of the project was
conducted by international experts and various technical options of
its implementation were considered.
On the other hand, we have an agreement on the construction of
Armenia-Georgia new electric-power transmission. It was signed
by leading power suppliers in Armenia and Georgia. This agreement
was formulated in its final form in conformity with Supplementary
Agreement N2 of April 16, 2014. The agreement specifies all phases
of construction of power transmission line 500 kW between substation
"Marneuli" and substation "Ayrum" and allocates the construction
obligations between all participating state companies. The first phase
of the project should complete by late 2018, and the second - by 2022.
The participating states are currently jointly thrashing out the
technical details of the new power line and the construction process.
Within the project, substation "Marneuli" will be expanded and enlarged
in the territory of Georgia and will acquire a status of that of a 500
kW, thus becoming one of the major electric power nodes in Georgia. In
the meantime, a state-of-the-art high-voltage direct current (HVDC)
will be constructed in Ayrum, the second in the Caucasus region after
the HVDC in Akhaltsikhe. Along with the new powerful transmission
line from substation "Ksani" to Stepantsminda (Kazbegi) region,
this project will broaden the possibilities of the Georgian power
supply system on energy transit between the Northern and Southern
sub-regions, which will in the end shape our power supply system as
evenly developing and open for transits in all directions.
It will beyond doubt serve as an extra incentive for supporting power
industry commerce and will help us seek after the establishment of
a powerful, modern and attractive electric power market in Georgia.
- Every now and then it is stated that owing to the new line with
Georgia and the three overhead transmission lines with Iran, Georgia
and Iran will carry on power trade through Armenia. Representatives of
Armenia and Iran have issued statements on it, however, the Georgian
government has yet not commented. What do you think about the prospect
of Iran-Georgia power trade through Armenia?
- At this point, we have no particular technical agreements with Iran
on electric power interchange, even more so agreements on deliveries -
export, import and transit.
Kakha Kaladze
Photo: Cbw.ge
On the whole, the southern route of the transit corridor is very
interesting and prospective provided the establishment of relevant
legal environment. The Iranian power supply system is one of the
largest in the region with possibilities for further development and
it is fairly interested in seeking external import sources.
Southern route of the transit corridor is very interesting and
prospective provided the establishment of relevant legal environment
In case of positive development of relations in this sector, the
Iranian power system, along with our other neighbors, might morph
into an active participant of regional electric power market.
- Owing to hydropower projects, Georgia is transforming from
electricity importer into an exporter. What role does the renewable
energy have in the energy strategy of Georgia?
- You are totally right. Georgia is rich in water resources and it
dictates us the main line of development - emphasis on hydro-power
engineering. At the same time, unlike many countries using water
resources, the degree of use of these resources for electric power
purposes does not exceed 20% in Georgia. So there is still room for
improvement and for attracting investments.
By the way, Armenia also has good practice in support for the
development of small HPPs. Over the recent years, Armenia successfully
implemented a number of small hydropower projects. We also have
practical results; new HPPs were put into operation - Paravani, Larsi,
Aragvi, Bakhvi and Kazbegi (total installed capacity up to 130 MW).
Darial HPP and Acharistsqali HPP (total installed capacity up to 300
MW) are the next forthcoming projects.
The construction of the new 400 kW electric power transmission
between Georgia and Turkey (Borcka-Akhaltsikhe) gave additional
impetus to the increase of electric power export volumes. Owing to
the implementation of modern projects, the intersystem deliveries
are carried out not only during the spring-summer season but also
continue during the fall-winter months previously not typical to the
Georgian hydro-power engineering. It is noteworthy that along with
the increase in generating capacities, sustainable growth of power
consumption (on average 4-5% per annum) has been observed in Georgia
over the past years. All these factors make the Georgian energy
market more interesting and attractive and provide an incentive for
its dynamic growth.
- Last summer, you expressed gratitude to the "sister nation of
Armenia" for the support they rendered to Georgia after the power
outage in most of the country. How efficiently do the ministries
of the two countries cooperate? How often do the representatives of
these two ministries meet, and what new projects do they discuss?
- Emergency mutual aid is one of the most important and indispensable
segments of cooperation between the power systems of our neighboring
countries. Despite the level of development, breakdowns occur in all
power systems and a vivid example of it is what happened last year
when our system managed to restore within possible tight deadlines
owing to precisely the support of our Armenian colleagues. Our power
supply systems have a longstanding history of relations and mutual
assistance in various emergency situations. This foundation should be
consolidated and developed under modern conditions, and a cutting-edge
legal-contractual base on the earlier regulated regime of emergency
deliveries (if necessary) should be formed.
We are happy that our Armenian colleagues pay proper attention to
energy security. As far as I know, Armenia has already started the
process of the elaboration and affirmation of the new regulation
on the allocation of functional responsibilities between the market
participants on providing intersystem emergency assistance.
Kakha Kaladze
Photo: REUTERS
As to cooperation and the formats of communication between the
energy sectors of the two countries, we should firstly note the
intergovernmental ties. In only late December 2014, the representatives
of government establishments and experts of Armenia and Georgia
held a working meeting in Yerevan in which representatives of the
ministries of energy and leaders of power supplying companies also took
part. Regular meetings of the leaders of state infrastructure companies
operating in the power industry sector became the norm. These meetings
are held 2-3 times a year, new agreements, contracts and protocols
are formed, new tasks are set and joint prospects are discussed.
Just recently, Georgia passed Amendments to the Law on "Electricity and
Natural Gas" regulating the standards and procedures of the elaboration
and regular update of the 10-year plan aimed at the development of
Georgia's electricity transmission grid. The first such 10-year
plan has already been worked out considering the modern European
requirements and will be approved in the near future. If Armenia
also works out such a long-term plan aimed at the development of the
high-voltage electrical grid, we can then consider the elaboration of
a joint, intersystem Armenian-Georgian 10-year plan covering issues
related to the prospective construction of the interdependent parts
of national power grids.
- Mr. Kaladze, in the past few years the Armenia national team has
significantly improved its positions in FIFA rating and player for
the Armenia national and Borussia Dortmund Henrikh Mkhitaryan has
become one of the most famous persons in Armenia. What contacts do
you maintain with Armenian players and what do you think about the
Armenian football today? Do you think Armenia and Georgia can closely
cooperate in the sphere of football and train the young players?
- During my football career, we have not played against Armenian
football clubs. We once had a friendly match with the Armenia national
in which Georgia scored a victory.
Henrikh Mkhitaryan is indeed a strong, successful and talented
football player
Unfortunately, my work schedule does not let me regularly keep up with
Armenian football, however, Henrikh Mkhitaryan is indeed a strong,
successful and talented football player. I would like to wish luck
to him, the rest of Armenian footballers and the Armenia national.
Ara Tadevosyan talked to Kakha Kaladze
http://www.mediamax.am/en/news/interviews/13764#sthash.Z58S06CX.dpuf
From: A. Papazian