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Year: Month: All releases Economy Sectors Companies
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Georgia's Energy Sector - Electricity Market Watch | 11M19

27 Dec, 2019

Parliament adopted two energy-related laws: 1) Law on Energy and Water Supply - important roadmap for the energy sector reform process and 2) Law on Promotion of the Production and Use of Energy from Renewable Sources (Renewable Energy law) – setting renewable energy targets and implementation deadlines. The laws define general framework of the upcoming markets and give guidelines for transition period. The laws also set deadlines and responsible bodies for the adoption of secondary legislation, which should define the most important details of market organisation and action plans of their implementation. Importantly, donor organisations are actively involved and assisting Georgia in this transitional process.

Energy community membership also obliges Georgia to adopt three other laws by end of 2019, currently under discussion in the parliament. These laws are: 1)Law on Energy Efficiency - setting energy efficiency targets for the country and encouraging energy savings, 2)Law on Energy Performance of Buildings - tightening the construction norms in 2020 and enforcement of penalties from2021, 3)Draft law on Energy Labelling - will force all consumer electronics vendors to include energy-related information on the product label. The list of information and form of labelling will be set during 2020, and penalties for non-compliance to these norms will come into force from 2021. The timeframes mentioned in the draft laws may change during its review and approval process.

Electricity trade deficit widened by 29.7% y/y to US$ 58.2mn in 11M19. Electricity consumption increased by mere 1.6% y/y, significantly below forecasted numbers as well as growth levels of previous periods. On supply side, hydrogenation decreased by 9.2% y/y due to unfavourable hydrological conditions. Reduced hydro generation created demand on electricity imports (+10.5% y/y) and thermal generation (+29.4% y/y), despite the low consumption growth rate. Importantly, 36% of imported electricity came from Russia in 11M19. 

GNERC revised tariffs for Khrami 1 and Khrami 2 to 10.837 Tetri/kWh (+18.5% y/y) and 12.304Tetri/kWh (+15.9% y/y), respectively. These tariffs are set from Dec-19 until Dec-21. Notably, Khami 2 HPP’s has the highest regulated tariff on the market, which, according to current market rules, is used as reference price of balancing electricity, purchased by the ESCO from deregulated small capacity HPPs. Respectively, after enforcement of new tariffs on Khrami cascade in Dec-19, the purchase price of balancing electricity will increase to 12.304 Tetri/kWh from the current 10.614 Tetri/kWh.

Thermal power plant Gardabani-2 has been put into test mode. The 250 MW plant is equipped with modern technologies and will be able to produce electricity more efficiently than the old ones. Unlike other TPPs, Gardabani-2 will not receive a guaranteed capacity fee. Its income source is a 14-year guaranteed power purchase agreement for 1,200kWh annually at USc 5.5/kWh. The owner of Garabani-2 TPP is the state-owned company - Georgian Oil and Gas Corporation. 


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Tbilisi Real Estate Market Outlook - In Need of Modernization

17 Dec, 2019

Despite strong development in recent years, Tbilisi’s real estate stock is outdated and still dominated by old buildings. Less than 25% of existing residential, retail and office real estate is built according to modern standards, demonstrating the sector’s strong growth potential.

Residential – Promising fundamentals
Office – Price-to-quality set to rise
Retail – Fuelled by consumer behavior
Hotels – Need to attract high-spending tourists
Development land – Prices are rising

Tbilisi Real Estate Market Outlook - In Need of Modernization
Tbilisi Real Estate Market Outlook - In Need of Modernization GEO 
Tbilisi Real Estate Market Outlook Presentation GEO


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Tourism Market Watch - November 2019

5 Dec, 2019

In November 2019, total international visitor (tourists and same-day combined) growth accelerated to 11.9% y/y after growing  8.8% y/y in October. Out of total 0.54mn visitors, Georgia hosted 0.33mn tourists (up 10.3% y/y) and 0.2mn same-day visitors (up 14.8% y/y) in November. Strengthened tourist arrivals (+10.3% y/y) in November was supported by significantly increased visitors from Israel, Kazakhstan and EU countries (+38.5% y/y) .

Meanwhile, arrivals from neighbors (Azerbaijan, Armenia and Turkey) also continued solid growth, reflected in elevated same-day arrivals (+14.8% y/y). Importantly, significantly reduced arrivals from largest source markets - Russia and Iran, were fully offset by strong arrival growth from other countries. 

Please see the full note here, which brings together tourist arrival data for reporting month, most recent statistical information available in the sector and 2019 forecast.


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Tourism Market Watch - October 2019

12 Nov, 2019

In October 2019, total international visitor (tourists and same-day combined) growth accelerated to 8.8% y/y after subdued growth of 3.9% y/y during July-September. Out of total 0.67mn visitors, Georgia hosted 0.43mn tourists (up 7.8% y/y) and 0.22mn same-day visitors (up 10.9% y/y) in October. Strengthened tourist arrivals (+7.8% y/y) in October was supported by significantly increased visitors from Israel (+56.9% y/y), Kazakhstan (139.4% y/y) and EU countries (+32.2% y/y).

Meanwhile, arrivals from neighbors (Azerbaijan, Armenia and Turkey) also continued solid growth, reflected in elevated same-day arrivals (+10.9% y/y). Importantly, significantly reduced arrivals from largest source markets - Russia and Iran, were fully offset by strong arrival growth from other countries. 

Please see the full note here, which brings together tourist arrival data for reporting month, most recent statistical information available in the sector and 2019 forecast.


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